transpo set 2 doctrines

8/12/2019 Transpo Set 2 Doctrines

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Concept of Common Carrier

No. L-47822. December 22, 1988.*

PEDRO DE GUZMAN, petitioner, vs.COURT OF APPEALS and

ERNESTO CENDAA, respondents.

Common Carriers; Definition of; Art. 1732 of the Civil Codemakes no distinctions between a person or enterprise offering

transportation service on a regular or scheduled basis and such

service on an occasional, episodic or unscheduled basis.The Civil

Code defines common carriers in the following terms: Article

1732. Common carriers are persons, corporations, firms, or

associations engaged in the business of carrying or transporting

passengers or goods or both, by land, water, or air for

compensation, offering their services to the public. The above

article makes no distinction between one whoseprincipal business

activity is the carrying of persons or goods or both, and one who

does such carrying only as an ancillaryactivity (in local idiom, as a

sideline). Article 1732 also carefully avoids making any distinction

between a person or enterprise offering transportation service on

a regular or scheduledbasis 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 distinctions.

Same; Same; Same; The concept of common carrier under

Art. 1732 coincides with the notion of Public Service under the

Public Service Act (CA No. 1416).So understood, the concept of

common carrier under Article 1732 may be seen to coincide

neatly with the notion of public service, under the Public Service

Act (Commonwealth Act No. 1416, as amended) which at least

partially supplements the law on common carriers set forth in the

Civil Code. Under Section 13, paragraph (b) of the Public ServiceAct, public service 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, expressservice, 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.

Same; Same; Same; Same; A certificate of public convenience

is not a requisite for the incurring of liability under the Civil Code

provisions governing common carriers.The Court of Appeals

referred to the fact that private respondent held no certificate of

public convenience, and concluded he was not a common carrier.

This is palpable error. A certificate of public convenience is not a

requisite for the incurring of liability under the Civil Code provisions

governing common carriers. That liability arises the moment a

person or firm acts as a common carrier, without regard to whether

or not such carrier has also complied with the requirements of the

applicable regulatory statute and implementing regulations and has

been granted a certificate of public convenience or other franchise.

To exempt private respondent from the liabilities of a common

carrier because he has not secured the necessary certificate of

public convenience, would be offensive to sound public policy; that

would be to reward private respondent precisely for failing to

comply with applicable statutory requirements. The business of a

common carrier impinges directly and intimately upon the safety

and well being and property of those members of the general

community who happen to deal with such carrier. The law imposes

duties and liabilities upon common carriers for the safety andprotection of those who utilize their services and the law cannot


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allow a common carrier to render such duties and liabilities merely

facultative by simply failing to obtain the necessary permits and

authorizations.

Same; Same; Same; Liability of common carriers in case of

loss, destruction or deterioration or destruction of goods they

carry; Extraordinary diligence, required; Exceptions.Common

carriers, by the nature of their business and for reasons of publicpolicy, are held to a very high degree of care and diligence

(extraordinary diligence) in the carriage of goods as well as of

passengers. The specific import of extraordinary diligence in the

care of goods transported by a common carrier is, according to

Article 1733, further expressed in Articles 1734, 1735 and 1745,

numbers 5, 6 and 7 of the Civil Code. 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: (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; and (5) Order or act of competent public authority. It

is important to point out that the above list of causes of loss,

destruction or deterioration which exempt the common carrier for

responsibility therefor, is a closed list. Causes falling outside the

foregoing list, even if they appear to constitute a species of force

majeure, fall within the scope of Article 1735.

Same; Same; Same; Same; Same; The hijacking of the

carriers truck does not fall within any of the five (5) categories of

exempting causes in Art. 1734.Applying the above-quoted

Articles 1734 and 1735, we note firstly that the specific cause

alleged in the instant casethe hijacking of the carriers truck

does not fall within any of the five (5) categories of exempting

causes listed in Article 1734. It would follow, therefore, that the

hijacking of the carriers vehicle must be dealt with under the

provisions of Article 1735, in other words, that the privaterespondent 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.

Same; Same; Same; Same; Same; Under Art. 1745(6), a

common carrier is held responsible even for acts of strangers like

thieves or robbers except where such thieves or robbers acted

with grave or irresistible threat, violence or force.As notedearlier, the duty of extraordinary diligence in the vigilance over

goods is, under Article 1733, given additional specification not only

by Articles 1734 and 1735 but also by Article 1745, numbers 4, 5

and 6. Article 1745 provides in relevant part: Any of the following

or similar stipulations shall be considered unreasonable, unjust and

contrary to public policy: xxx xxx xxx (5) that the common carrier

shall not be responsible for the acts or omissions of his or its

employees; (6) that the common carriers liability for acts

committed by thieves, orof robberswho do not act with grave or

irresistible threat, violence or force, is dispensed with or

diminished; and (7) that the common carrier shall not responsible

for the loss, destruction or deterioration of goods on account of the

defective condition of the car, vehicle, ship, airplane or other

equipment used in the contract of carriage. Under Article 1745 (6)

above, a common carrier is held responsible and will not be allowed

to divest or to diminish such responsibilityeven for acts of

strangers like thieves or robbers, except where such thieves or

robbers in fact acted with grave or irresistible threat, violence or

force. 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.

Same; Same; Same; Same; Same; Common carriers are not

made absolute insurers against all risks of travel and of transport

of goods and are not liable for fortuitous events; Case at bar.In

these circumstances, 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 necessaryto recall that even common carriers are not made absolute insurers


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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. We, therefore, agree with the

result reached by the Court of Appeals that private respondent

Cendaa is not liable for the value of the undelivered merchandise

which was lost because of an event entirely beyond privaterespondents control.


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Characteristics

[No. 8095. November 5, 1914, and March 31, 1915.]

F C. FISHER, plaintiff, vs.YANGCO STEAMSHIP COMPANY, J.

S. STANLEY, as Acting Collector of Customs of the Philippine

Islands, IGNACIO VILLAMOR, as AttorneyGeneral of the

Philippine Islands, and W. H. BISHOP, as prosecutingattorney of the city of Manila, respondents.

1.1.COMMON CARRIERS; PREFERENCES ANDDISCRIMINATIONS.Whatever may have been the rule at

common law, common carriers in this jurisdiction cannot

lawf ully decline to accept a particular class of goods for

carriage to the prejudice of the traffic in those goods

unless it appears that for some sufficient reason the

discrimination against the traffic in such goods is

reasonable and necessary. Mere prejudice or whim will not

suffice. The grounds of the discrimination must be

substantial ones, such as will justify the courts in holding

the discrimination to have been reasonable and necessary

under all the circumstances of the case.

1.2.ID.; ID.; PENAL PROVISIONS OF ACT No. 98.Thepenalties prescribed for violations of Act No. 98 of the

Philippine Commission are neither excessive nor cruel and

unusual in the sense in which those words are used in the

organic legislation in force in the Islands.

1.3.ID. ; ID. ; ID.There is nothing in that statute whichwould deprive any person of his liberty "by requiring him

to engage in business against his will." The prohibition of

the statute against undue, unnecessary, or unreasonable

preferences and discriminations are merely the reasonable

regulations which the legislator has seen fit to prescribe for

the conduct of the business in which the carrier is engagedof his own free will and accord.

1.4.ID.; CONTROL AND REGULATION OF CARRIERS,Thenature of the business of a common carrier as a public

employment is such that it is clearly within the power of

the state to impose such just and reasonable regulations

thereon in the interest of the public as the legislator may

deem proper. Of course such regulations must not have

the effect of depriving an owner of his property withoutdue course of law, nor of confiscating or appropriating

private property without just compensation, nor of limiting

or prescribing irrevocably vested rights or privileges

lawfully acquired under a charter or franchise. But aside

from such constitutional limitations, the determination of

the nature and extent of the regulations which should be

prescribed rests in the hands of the legislator.

1.5.ID. ; ID.The right to enter the public employment as acommon carrier and to offer one's services to the public for

hire does not carry with it the right to conduct that

business as one pleases, without regard to the interests of

the public, and free from such reasonable and just

regulations as may be prescribed for the protection of the

public from the reckless or careless indifference of the

carrier as to the public welfare and for the prevention of

unjust and unreasonable discriminations of any kind

whatsoever in the performance of the carrier's duties as a

servant of the public.

1.6.ID.; ID.; JUDICIAL INTERFERENCE.The judiciary oughtnot to interfere with such regulations established under

legislative sanction unless they are so plainly and palpably

unreasonable as to make their enforcement equivalent to

the taking of property for public use without such

compensation as under all the circumstances is just both

to the owner and to the public; that is, judicial interference

should never occur unless the case presents, clearly andbeyond all doubt, such a flagrant attack upon the rights of


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property under the guise of regulations as to compel the

court to say that the regulations in question will have the

effect to deny just compensation for private property taken

for the public use.

1.7.ID. ; ID.When one devotes his property to a use inwhich the public has an interest, he, in effect, grants to thepublic an interest in that use and must submit to be

controlled by the public for the common good to the extent

of the interest he has thus created. He may withdraw his

grant by discontinuing the use, but so long as he maintains

the use he must submit to control,

1.8.ID. ; ID. ; EXERCISE OF POWER THROUGH BOARDS OFCOMMISSIONERS.So far beyond question is this right of

regulation that it is -well settled that the power of the

state to exercise legislative control over railroad companies

and other common carriers "in all respects necessary to

protect the public against danger, injustice and

oppression" may be exercised through boards of

commissioners.

1.9.ID.; ID.; ACT No. 98; STATUTORY PROVISIONS.Correctly construed,the provisions of the Philippine statute

(Act No. 98) do not force a common carrier to engage in

any business against his will or to make use of his facilitiesin a manner or for a purpose for which they are not

reasonably adapted. It is only when he offers his facilities

as a common carrier to the public for hire, that the statute

steps in and prescribes that he must treat all alike, that he

may not pick and choose which customer he will serve,

and, specifically, that he shall not make any undue or

unreasonable preferences or discriminations whatsoever to

the prejudice not only of any person or locality, but also of

any particular kind of traffic.

1.10.ID.; PREFERENCES ANDDISCRIMINATIONS;EXPLOSIVES.It cannot be doubted

that the refusal of a "steamship company, the owner of a

large number of vessels" engaged in the coastwise trade of

the Philippine Islands as a common carrier of merchandise,

to accept explosives for carriage on any of its vessels

subjects the traffic in such explosives to a manifestprejudice and discrimination, and in each case it is a

question of fact whether such prejudice or discrimination is

undue, unnecessary or unreasonable.

1.11.ID.; ID.; ID.; CONSIDERATION OF ATTENDANTCIRCUMSTANCES.The making of a finding as to whether

a refusal, by a steamship company engaged in the

coastwise trade in the Philippine Islands as a common

carrier, to carry such products subjects any person,

locality, or the traffic in such products to an unnecessary,

undue or unreasonable prejudice or discrimination,

involves a consideration of the suitability of the vessels of

the company for the transportation of such products; the

reasonable possibility of danger or disaster resulting from

their transportation in the form and under the conditions in

which they are offered for carriage; the general nature of

the business done by the carrier, and, in a word, all the

attendant circumstances which might affect the question of

the reasonable necessity for the refusal by the carrier to

undertake the transportation of this class of merchandise.

1.12.ID.; ID.; ID.; ID.The mere fact that violent anddestructive explosions can be obtained by the use of

dynamite under certain conditions is not sufficient in itself

to justify the refusal of a vessel, duly licensed as a

common carrier of merchandise, to accept it for carriage, if

it can be proven that in the condition in which it is offered

for carriage there is no real danger to the carrier norreasonable ground to fear that his vessel or those on board


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his vessel will be exposed to unnecessary or unreasonable

risks in transporting it, having in mind the nature of his

business as a common carrier engaged in the coastwise

trade in the Philippine Islands, and his duty as a servant of

the public.engaged in a public employment.

1.13.ID.; ID.; ID.; ID.If by the exercise of due diligence,taking all reasonable precautions, the danger of explosions

can be eliminated, the carrier would not be justified in

subjecting the traffic in this commodity to prejudice or

discrimination by proof that there would be a possibility of

danger from explosion when no such precautions are

taken.

1.14.ID. ; ID.; ID.; ID.The traffic in dynamite, gunpowderand other explosives is vitally essential to the material and

general welf are of the inhabitants of these Islands, and if

these products are to continue in general use throughout

the Philippines they must be transported by water from

port to port in the various islands which make up the

Archipelago. It follows that the refusal by a particular

vessel engaged as a common carrier of merchandise in the

coastwise trade in the Philippine Islands to accept such

explosives for carriage constitutes a violation of the

prohibitions against discrimination penalized under the

statute, unless it can be shown that there is so real andsubstantial a danger of disaster necessarily involved in the

carriage of any or all of these articles of merchandise as to

render such ref usal a due or a necessary or a reasonable

exercise of prudence and discretion on the part of the

shipowner.

[No. 8686. July 30, 1915.]

THE UNITED STATES, plaintiff and appellee, vs.PASCUAL

QUINAJON and EUGENIO QUITORIANO, defendants andappellants.

1.1.COMMON CARRIERS; WHO ARE COMMON CARRIERS;ACTNo. 98 CONSTRUED.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

remunerate him. A common carrier is a person or

corporation who undertakes tocarry goods or persons forhire. Act No. 98 of the United States Philippine Commissionis an Act to regulate commerce in the Philippine Islands.

1.2.ID.; PREFERENCES AND DISCRIMINATIONS.Act No. 98provides that no common carrier shall, directly or

indirectly, by any special rate, rebate, drawback, or other

device, charge, demand, collect, or receive from any

person or persons a greater or less compensation for any

services rendered in the transportation of passengers or

property, between points in the Philippine Islands, than he

charges, demands, collects, or receives from any other

person or persons, for doing a like or contemporaneous

service, under substantially similar conditions or

circumstances. A common carrier cannot, under the law,

give any unnecessary or unreasonable preference or

advantage to any particular person, company, firm,

corporation or locality, or any particular kind of traffic, or

subject any particular person, company, firm, or

corporation or locality, or any particular kind of traffic, to

any undue or unreasonable prejudice or discriminationwhatsoever.

1.3.ID. ; ID.Said Act No. 98 does not require that the samecharge shall be made for carrying passengers or property,

unless all the conditions are alike and contemporaneous. It

does not prohibit 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. Common

carriers can not make a different rate to different personsfor carrying persons or merchandise, unless the actual cost


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of handling and shipping 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. If the services are alike and

contemporaneous, discrimination in the price charged is

prohibited.

G.R. No. 131621. September 28, 1999.*

LOADSTAR SHIPPING CO., INC., petitioner, vs. COURT OF

APPEALS and THE MANILA INSURANCE CO., INC.,

respondents.

Contracts; Common Carriers; Damages; The law imposes

duties and liabilities upon common carriers for the safety and

protection of those who utilize their services and the law cannot

allow a common carrier to render such duties and liabilities merely

facultative by simply failing to obtain the necessary permits and

authorizations.The Court of Appeals referred to the fact that

private respondent held no certificate of public convenience, and

concluded he was not a common carrier. This is palpable error. A

certificate of public convenience is not a requisite for the incurring

of liability under the Civil Code provisions governing common

carriers. That liability arises the moment a person or firm acts as a

common carrier, without regard to whether or not such carrier has

also complied with the requirements of the applicable regulatory

statute and implementing regulations and has been granted a

certificate of public convenience or other franchise. To exempt

private respondent from the liabilities of a common carrier because

he has not secured the necessary certificate of public convenience,

would be offensive to sound public policy; that would be to reward

private respondent precisely for failing to comply with applicable

statutory requirements. The business of a common carrier

impinges directly and intimately upon the safety and well being and

property of those members of the general community who happento deal with such carrier. The law imposes duties and liabilities

upon common carriers for the safety and protection of those who

utilize their services and the law cannot allow a common carrier to

render such duties and liabilities merely facultative by simply

failing to obtain the necessary permits and authorizations.

Same; Same; Same; For a vessel to be seaworthy, it must be

adequately equipped for the voyage and manned with a sufficient

number of competent officers and crew.Moving on to the secondassigned error, we find that the M/V Cherokee was not seaworthy

when it embarked on its voyage on 19 November 1984. The vessel

was not even sufficiently manned at the time. For a vessel to be

seaworthy, it must be adequately equipped for the voyage and

manned with a sufficient number of competent officers and crew.

The failure of a common carrier to maintain in seaworthy condition

its vessel involved in a contract of carriage is a clear breach of its

duty prescribed in Article 1755 of the Civil Code.

Same; Same; Same; Since it was remiss in the performance

of its duties, LOADSTAR cannot hide behind the limited liability

doctrine to escape responsibility for the loss of the vessel and its

cargo.Neither do we agree with LOADSTARs argument that the

limited l iability theory should be applied in this case. The doctrine

of limited liability does not apply where there was negligence on

the part of the vessel owner or agent. LOADSTAR was at fault or

negligent in not maintaining a seaworthy vessel and in having

allowed its vessel to sail despite knowledge of an approaching

typhoon. In any event, it did not sink because of any storm that

may be deemed as force majeure, inasmuch as the wind condition

in the area where it sank was determined to be moderate. Since it

was remiss in the performance of its duties, LOADSTAR cannot hide

behind the limited liability doctrine to escape responsibility for

the loss of the vessel and its cargo.

Same; Same; Same; A stipulation reducing the one-year

period for filing the action for recovery is null and void and must be

struck down.Neither is there merit to the contention that the

claim in this case was barred by prescription. MICs cause of action

had not yet prescribed at the time it was concerned. Inasmuch asneither the Civil Code nor the Code of Commerce states a specific


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prescriptive period on the matter, the Carriage of Goods by Sea Act

(COGSA)which provides for a one-year period of limitation on

claims for loss of, or damage to, cargoes sustained during transit

may be applied suppletorily to the case at bar. This one-year

prescriptive period also applies to the insurer of the goods. In this

case, the period for filing the action for recovery has not yet

elapsed. Moreover, a stipulation reducing the one-year period isnull and void; it must, accordingly, be struck down.

G.R. No. 125948. December 29, 1998.*

FIRST PHILIPPINE INDUSTRIAL CORPORATION,

petitioner, vs. COURT OF APPEALS, HONORABLE PATERNO V.

TAC-AN, BATANGAS CITY and ADORACION C. ARELLANO, in

her official capacity as City Treasurer of Batangas,

respondents.

Contracts; Common Carriers; A common carrier is one who

holds himself out to the public as engaged in the business of

transporting persons or property from place to place, for

compensation, offering his services to the public generally.There

is merit in the petition. A common carrier may be defined,

broadly, as one who holds himself out to the public as engaged in

the business of transporting persons or property from place to

place, for compensation, offering his services to the public

generally. Article 1732 of the Civil Code defines a common carrier

as any person, corporation, firm or association engaged in thebusiness of carrying or transporting passengers or goods or both,

by land, water, or air, for compensation, offering their services to

the public.

Same; Same; Test for determining whether a party is a

common carrier of goods.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 casualoccupation; 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.

Same; Same; The fact that petitioner has a limited clientele

does not exclude it from the definition of a common carrier.Based

on the above definitions and requirements, there is no doubt that

petitioner is a common carrier. It is engaged in the business oftransporting 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.

Same; Same; Words and Phrases; The definition of common

carriers in the Civil Code makes no distinction as to the means of

transporting, as long as it is by land, water or air.As correctly

pointed out by petitioner, the definition of common carriers in the

Civil Code makes no distinction as to the means of transporting, as

long as it is by land, water or air. It does not provide that the

transportation of the passengers or goods should be by motor

vehicle. In fact, in the United States, oil pipe line operators are

considered common carriers.

Same; Same; Taxation; Legislative intent in excluding from

the taxing power of the local government unit the imposition of

business tax against common carriers is to prevent a duplication of

the so-called common carriers tax.It is clear that the legislative

intent in excluding from the taxing power of the local government

unit the imposition of business tax against common carriers is to

prevent a duplication of the so-called common carriers tax.

Petitioner is already paying three (3%) percent common carriers

tax on its gross sales/earnings under the National Internal Revenue

Code. To tax petitioner again on its gross receipts in its

transportation of petroleum business would defeat the purpose of

the Local Government Code.


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G.R. No. 148496. March 19, 2002.*

VIRGINES CALVO doing business under the name and style

TRANSORIENT CONTAINER TERMINAL SERVICES, INC.,

petitioner, vs. UCPB GENERAL INSURANCE CO., INC.

(formerly Allied Guarantee Ins. Co, Inc.), respondent.

Common Carriers; Customs Brokers; A customs broker is a

common carrierthe concept of common carrier under Article

1732 of the Civil Code may be seen to coincide nearly with the

notion of public service, under the Public Service Act

(Commonwealth Act No. 1416) which at least partially supplements

the law on common carriers set forth in the Civil Code .Petitioner

contends that contrary to the findings of the trial court and the

Court of Appeals, she is not a common carrier but a private carrier

because, as a customs broker and warehouseman, she does not

indiscriminately hold her services out to the public but only offers

the same to select parties with whom she may contract in the

conduct of her business. The contention has no merit. InDe

Guzman v. Court of Appeals, the Court dismissed a similar

contention and held the party to be a common carrier, thusThe

Civil Code defines common carriers in the following terms:

Article 1732. Common carriers are persons, corporations, firms or

associations engaged in the business of carrying or transporting

passengers or goods or both, by land, water, or air for

compensation, offering their services to the public. The above

article makes no distinction between one whoseprincipalbusinessactivity 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 segmentof the general population.We think that Article 1732 deliberately refrained from making such

distinctions. So understood, the concept of common carrier under

Article 1732 may be seen to coincide neatly with the notion of

public service, under the Public Service Act (Commonwealth Act

No. 1416, as amended) which at least partially supplements the

law on common carriers set forth in the Civil Code.

Same; Same; There is greater reason for holding a person

who is a customs broker to be a common carrier because thetransportation of goods is an integral part of her business.There

is greater reason for holding petitioner to be a common carrier

because the transportation of goods is an integral part of her

business. To uphold petitioners contention would be to deprive

those with whom she contracts the protection which the law affords

them notwithstanding the fact that the obligation to carry goods for

her customers, as already noted, is part and parcel of petitioners

business.

Same; Same; Words and Phrases; Extraordinary Diligence,

Explained; Common carriers, from the nature of their business and

for reasons of public policy, are bound to observe extraordinary

diligence in the vigilance over the goods and for the safety of the

passengers transported by them, according to all the circumstances

of such case.As to petitioners liability, Art. 1733 of the Civil Code

provides: Common carriers, from the nature of their business and

for reasons of public policy, are bound to observe extraordinary

diligence in the vigilance over the goods and for the safety of the

passengers transported by them, according to all the circumstances

of each case. . . . In Compania Maritima v. Court of Appeals, the

meaning of extraordinary diligence in the vigilance over goods

was explained thus: The extraordinary diligence in the vigilance

over the goods tendered for shipment requires the common carrier

to know and to follow the required precaution for avoiding damage

to, or destruction of the goods entrusted to it for sale, carriage and

delivery. It requires common carriers to render service with the

greatest skill and foresight and to use all reasonable means to

ascertain the nature and characteristic of goods tendered for

shipment, and to exercise due care in the handling and stowage,including such methods as their nature requires.


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Same; Same; To prove the exercise of extraordinary

diligence, a customs broker must do more than merely show the

possibility that some other party could be responsible for the

damage.Anent petitioners insistence that the cargo could not

have been damaged while in her custody as she immediately

delivered the containers to SMCs compound, suffice it to say that

to prove the exercise of extraordinary diligence, petitioner must domore than merely show the possibility that some other party could

be responsible for the damage. It must prove that it used all

reasonable means to ascertain the nature and characteristic of

goods tendered for [transport] and that [it] exercise[d] due care in

the handling [thereof]. Petitioner failed to do this.

Same; Same; If the improper packing or the defects in the

container are known to the carrier or his employees or apparent

upon ordinary observation, but he nevertheless accepts the same

without protest or exception notwithstanding such condition, he is

not relieved of liability for damage resulting therefrom.The rule is

that if the improper packing or, in this case, the defect/s in the

container, is/are known to the carrier or his employees or apparent

upon ordinary observation, but he nevertheless accepts the same

without protest or exception notwithstanding such condition, he is

not relieved of liability for damage resulting therefrom. In this

case, petitioner accepted the cargo without exception despite the

apparent defects in some of the container vans. Hence, for failure

of petitioner to prove that she exercised extraordinary diligence in

the carriage of goods in this case or that she is exempt from

liability, the presumption of negligence as provided under Art. 1735

holds

G.R. No. 149038. April 9, 2003.*

PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY,

petitioner, vs.PKS SHIPPING COMPANY, respondent.

Common Carriers; Actions; Appeals; Questions of

Fact;Questions of Law; Words and Phrases; Conclusions derived

from factual findings are not necessarily just matters of fact as

when they are so linked to, or inextricably intertwined with, a

requisite appreciation of the applicable law, in which instance, the

conclusions made could well be raised as being appropriate issues

in a petition for review before the Supreme Court; An issue

whether a carrier is private or common on the basis of the facts

found by a trial court or the appellate court can be a valid and

reviewable question of law.The findings of fact made by the Courtof Appeals, particularly when such findings are consistent with

those of the trial court, may not at liberty be reviewed by this

Court in a petition for review under Rule 45 of the Rules of Court.

The conclusions derived from those factual findings, however, are

not necessarily just matters of fact as when they are so linked to,

or inextricably intertwined with, a requisite appreciation of the

applicable law. In such instances, the conclusions made could well

be raised as being appropriate issues in a petition for review before

this Court. Thus, an issue whether a carrier is private or common

on the basis of the facts found by a trial court or the appellate

court can be a valid and reviewable question of law.

Same; Article 1732 of the Civil Code 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, and neither does it 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.The prevailing

doctrine on the question is that enunciated in the leading case

of De Guzman vs. Court of Appeals Applying Article 1732 of the

Code, in conjunction with Section 13(b) of the Public Service Act,

this Court has held: The above article makes no distinction

between one whoseprincipalbusiness activity is the carrying of

persons or goods orboth, and one who does such carrying only as

an ancillary activity (in local idiom, as a sideline). Article 1732

also carefully avoids making any distinction between a person or

enterprise offering transportation service on a regular or scheduledbasis and one offering such service on an occasional, episodic or


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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 segmentof the general population.

We think that Article 1732 deliberately refrained from making such

distinctions. So understood, the concept of common carrier under

Article 1732 may be seen to coincide neatly with the notion ofpublic service, under the Public Service Act (Commonwealth Act

No. 1416, as amended) which at least partially supplements the

law on common carriers set forth in the Civil Code.

Same; Words and Phrases; Much of the distinction between a

common or public carrier and a private or special carrier lies in

the character of the business, such that if the undertaking is an

isolated transaction, not a part of the business or occupation, and

the carrier does not hold itself out to carry the goods for the

general public or to a limited clientele, although involving the

carriage of goods for a fee, the person or corporation providing

such service could very well be just a private carrier; The concept

of a common carrier does not change merely because individual

contracts are executed or entered into with patrons of the carrier

such restrictive interpretation would make it easy for a common

carrier to escape liability by the simple expedient of entering into

those distinct agreements with clients.Much of the distinction

between a common or public carrier and a private or special

carrier lies in the character of the business, such that if the

undertaking is an isolated transaction, not a part of the business or

occupation, and the carrier does not hold itself out to carry the

goods for the general public or to a limited clientele, although

involving the carriage of goods for a fee, the person or corporation

providing such service could very well be just a private carrier. A

typical case is that of a charter party which includes both the

vessel and its crew, such as in a bareboat or demise, where the

charterer obtains the use and service of all or some part of a ship

for a period of time or a voyage or voyages and gets the control of

the vessel and its crew. Contrary to the conclusion made by theappellate court, its factual findings indicate that 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. Such

restrictive interpretation would make it easy for a common carrierto escape liability by the simple expedient of entering into those

distinct agreements with clients.

Same; Extraordinary Diligence; Article 1733 of the Civil Code

requires common carriers to observe extraordinary diligence in the

vigilance over the goods they carry.Addressing now the issue of

whether or not PKS Shipping has exercised the proper diligence

demanded of common carriers, Article 1733 of the Civil Code

requires common carriers to observe extraordinary diligence in the

vigilance over the goods they carry. In case of loss, destruction or

deterioration of goods, common carriers are presumed to have

been at fault or to have acted negligently, and the burden of

proving otherwise rests on them. The provisions of Article 1733,

notwithstanding, common carriers are exempt from liability for

loss, destruction, or deterioration of the goods due to any of the

following causes: (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; and (5) Order or act of competent

public authority.

Evidence; Appeals; Findings of fact of the Court of Appeals

generally conclude the Supreme Court; Exceptions.Findings of

fact of the Court of Appeals generally conclude this Court; none of

the recognized exceptions from the rule(1) when the factual

findings of the Court of Appeals and the trial court are

contradictory; (2) when the conclusion is a finding grounded

entirely on speculation, surmises, or conjectures; (3) when the

inference made by the Court of Appeals from its findings of fact ismanifestly mistaken, absurd, or impossible; (4) when there is a


12/48

grave abuse of discretion in the appreciation of facts; (5) when the

appellate court, in making its findings, went beyond the issues of

the case and such findings are contrary to the admissions of both

appellant and appellee; (6) when the judgment of the Court of

Appeals is premised on a misapprehension of facts; (7) when the

Court of Appeals failed to notice certain relevant facts which, if

properly considered, would justify a different conclusion; (8) whenthe findings of fact are themselves conflicting; (9) when the

findings of fact are conclusions without citation of the specific

evidence on which they are based; and (10) when the findings of

fact of the Court of Appeals are premised on the absence of

evidence but such findings are contradicted by the evidence on

recordwould appear to be clearly extant in this instance.

G.R. No. 147246. August 19, 2003.*

ASIA LIGHTERAGE AND SHIPPING, INC.,

petitioner, vs.COURT OF APPEALS and PRUDENTIALGUARANTEE AND ASSURANCE, INC., respondents.

Civil Law; Contracts; Common Carriers; Definition.The

definition of common carriersin 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 anoccasional, 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.

Same; Same; Same; Determination of a common carrier.

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.

Same; Same; Same; Presumption of Negligence; Common

carriers are presumed to have been at fault or to have acted

negligently if the goods are lost, destroyed or deteriorated.

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 thepresumption of negligence in the case of loss, destruction or

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.

G.R. No. 186312. June 29, 2010.*SPOUSES DANTE CRUZ and LEONORA CRUZ, petitioners, vs.

SUN HOLIDAYS, INC., respondent.

Civil Law; Common Carriers; Definition of Common Carriers.

As De Guzman instructs, 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

carriers 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 ofcommon carriers.

Same; Same; Degree of Diligence Required; From the

nature of their business and for reasons of public policy, common

carriers are bound to observe extraordinary diligence for the safety

of the passengers transported by them, according to all the

circumstances of each case.Under the Civil Code, common

carriers, from the nature of their business and for reasons of public

policy, are bound to observe extraordinary diligence for the safety

of the passengers transported by them, according to all the

circumstances of each case. They are bound to carry thepassengers safely as far as human care and foresight can provide,


13/48


14/48

Distinguished from Private Carrier

No. L-25599. April 4, 1968.

HOME INSURANCE COMPANY, plaintiff-

appellee, vs.AMERICAN STEAMSHIP AGENCIES, INC. and

LUZON STEVEDORING CORPORATION, defendants,

AMERICAN STEAMSHIP AGENCIES, INC., defendant-

appellant.

Code of Commerce; Charter party; Civil Code on common

carriers does not apply to charter party.The Civil Code provisions

on common carriers should not apply where the common carrier is

not acting as such but as a private carrier. Under American

jurisprudence, a common carrier undertaking to carry a special

cargo or chartered to a special person only, becomes a private

carrier. As a private carrier, a stipulation exempting the owner

from liability for the negligence of its agent is valid.

Same; Same, Stipulation on absolving owner from liability for

loss due to negligence of its agent is valid.The stipulation in the

charter party absolving the owner from liability for loss due to the

negligence of its agent would be void only if the strict public policy

governing common carriers is applied. Such policy has no force

where the public at large is not involved, as in the case of a ship

totally chartered for the use of a single party. The stipulation

exempting the owner from liability for the negligence of its agent is

not against public policy and is deemed valid.

Civil Code; Common carriers; Origin of provisions.Theprovisions of our Civil Code on common carriers were taken from

Anglo-American law.

Code of Commerce; Bill of lading; Nature; Not the contract in

a charter party.In a charter of the entire vessel, the bill of lading

issued by the master to the charterer, as shipper, is in fact and

legal contemplation merely a receipt and a document of title, not a

contract, for the contract is the charter party.

Nos. L-61461 & 61501. August 21, 1987.*

EPITACIO SAN PABLO, (Substituted by Heirs of E. San

Pablo), petitioners, vs.PANTRANCO SOUTH EXPRESS, INC.,

respondent.

CARDINAL SHIPPING CORPORATION,

petitioner, vs.HONORABLE BOARD OF TRANSPORTATION

AND PANTRANCO SOUTH EXPRESS, INC., respondents.

Transportation; Public Utilities; Matnog and Allen are

separated by an open sea it cannot be considered as a continuation

of highway.Considering the environmental circumstances of the

case, the 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 can the sea

between Matnog and Allen be considered a continuation of the

highway. While a ferryboat service has been considered as a

continuation of the highway when crossing rivers or even lakes,

which are small body of waters separating the land, however, when

as in this case the two terminals, Matnog and Allen are separated

by an open sea it can not be considered as a continuation of the

highway. Respondent PANTRANCO should secure a separate CPC

for the operation of an interisland or coastwise shipping service in

accordance with the provisions of law. Its CPC as a bus

transportation cannot be merely amended to include this water

service under the guise that it is a mere private ferry service.

Same; Same; Considering that the authority granted to

Pantranco is to operate a private ferry, it can assert that it cannotbe held to account as a common carrier which situation will

jeopardize the safety and interest of its passengers and cargo

owners.The contention of private respondent PANTRANCO that its

ferry service operation is as a private carrier, not as a common

carrier for its exclusive use in the ferrying of its passenger buses

and cargo trucks is absurd. PANTRANCO does not deny that it

charges its passengers separately from the charges for the bus

trips and issues separate tickets whenever they board the M/V

"Black Double" that crosses Matnog to Allen, PANTRANCO cannotpretend that in issuing tickets to its passengers it did so as a


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private carrier and not as a common carrier. The Court does not

see any reason why inspite of its amended franchise to operate a

private ferryboat service it cannot accept walk-in passengers just

for the purpose of crossing the sea between Matnog and Allen.

Indeed evidence to this effect has been submitted. What is even

more difficult to comprehend is that while in one breath respondent

PANTRANCO claims that it is a private carrier insofar as theferryboat service is concerned, in another breath it states that it

does not thereby abdicate from its obligation as a common carrier

to observe extraordinary diligence and vigilance in the

transportation of its passengers and goods. Nevertheless,

considering that the authority granted to PANTRANCO is to operate

a private ferry, it can still assert that it cannot be held to account

as a common carrier towards its passengers and cargo. Such an

anomalous situation that will jeopardize the safety and interests of

its passengers and the cargo owners cannot be allowed.

Same; Same.Thus the Court holds that the water transport

service between Matnog and Allen is not a ferryboat service but a

coastwise or interisland shipping service. Before private respondent

may be issued a franchise or CPC for the operation of the said

service as a common carrier, it must comply with the usual

requirements of filing an application, payment of the fees,

publication, adducing evidence at a hearing and afffording the

oppositors the opportunity to be heard, among others, as provided

by law.

G.R. No. 112287. December 12, 1997.*NATIONAL STEEL CORPORATION, petitioner, vs.COURT OF

APPEALS AND VLASONS SHIPPING, INC., respondents.G.R. No. 112350. December 12, 1997.*

VLASONS SHIPPING, INC., petitioner, vs.COURT OF

APPEALS AND NATIONAL STEEL CORPORATION,

respondents.

Common Carriers; Private Carriers; Ships and Shipping; It has

been held that the true test of a common carrier is the carriage ofpassengers or goods, provided it has space, for all who opt to avail

themselves of its transportation service for a fee.Article 1732 of

the Civil Code defines a common carrier 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. It has been

held that the true test of a common carrier is the carriage of

passengers or goods, provided it has space, for allwho opt to availthemselves of its transportation service for a fee. 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. The most typical, although not the only form of

private carriage, is the charter party, a maritime contract by which

the charterer, a party other than the shipowner, obtains the use

and service of all or some part of a ship for a period of time or a

voyage or voyages.

Same; Same; Same; The rights and obligations of a private

carrier and a shipper, including their respective liability for damage

to the cargo, are determined primarily by stipulations in their

contract of private carriage or charter party.In the instant case, it

is undisputed that VSI did not offer its services to the general

public. As found by the Regional Trial Court, it carried passengers

or goods only for those it chose under a special contract of charter

party. As correctly concluded by the Court of Appeals, the MV

Vlasons Iwas not a common but a private carrier. Consequently,

the rights and obligations of VSI and NSC, including their

respective liability for damage to the cargo, are determined

primarily by stipulations in their contract of private carriage or

charter party.

Same; Same; Same; Evidence; Burden of Proof; Code of

Commerce; In an action against a private carrier for loss of, or

injury to, cargo, the burden is on the plaintiff to prove that the

carrier was negligent or unseaworthy, and the fact that the goods

were lost or damaged while in the carriers custody does not put

the burden of proof on the carrier.This view finds further supportin the Code of Commerce which pertinently provides: Art.


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361.Merchandise shall be transported at the risk and venture of the

shipper, if the contrary has not been expressly

stipulated.Therefore, the damage and impairment suffered by the

goods during the transportation, due to fortuitous event, force

majeure, or the nature and inherent defect of the things, shall be

for the account and risk of the shipper. The burden of proof of

these accidents is on the carrier. Art. 362. The carrier, however,shall be liable for damages arising from the cause mentioned in the

preceding article if proofs against him show that they occurred on

account of his negligence or his omission to take the precautions

usually adopted by careful persons, unless the shipper committed

fraud in the bill of lading, making him to believe that the goods

were of a class or quality different from what they really were.

Because the MV Vlasons Iwas a private carrier, the shipowners

obligations are governed by the foregoing provisions of the Code of

Commerce and not by the Civil Code which, as a general rule,

places theprima faciepresumption of negligence on a common

carrier. It is a hornbook doctrine that: In an action against a

private carrier for loss of, or injury to, cargo, the burden is on the

plaintiff to prove that the carrier was negligent or unseaworthy,

and the fact that the goods were lost or damaged while in the

carriers custody does not put the burden of proof on the carrier.

Same; Same; Same; Where the factual findings of both the

trial court and the Court of Appeals coincide, the same are binding

on the Supreme Court.These questions of fact were threshed out

and decided by the trial court, which had the firsthand opportunityto hear the parties conflicting claims and to carefully weigh their

respective evidence. The findings of the trial court were

subsequently affirmed by the Court of Appeals. Where the factual

findings of both the trial court and the Court of Appeals coincide,

the same are binding on this Court. We stress that, subject to

some exceptional instances, only questions of lawnot questions of

factmay be raised before this Court in a petition for review under

Rule 45 of the Rules of Court.

Same; Same; Same; Only questions of lawnot questions offactmay be raised before the Supreme Court in a petition for

review under Rule 45 of the Rules of Court; Exceptions.Fuentes

v. Court of Appeals,G.R. No. 109849, pp. 6-8, February 26, 1997,

per Panganiban,J.,enumerated the following instances: (1) When

the factual findings of the Court of Appeals and the trial court are

contradicttory; (2) When the conclusion is a finding grounded

entirely on speculation, surmises, or conjectures; (3) When the

inference made by the Court of Appeals from its findings of fact ismanifestly mistaken, absurd, or impossible; (4) When there is a

grave abuse of discretion in the appreciation of facts; (5) When the

appellate court, in making its findings, went beyond the issues of

the case, and such findings are contrary to the admissions of both

appellant and appellee; (6) When the judgment of the Court of

Appeals is premised on a misapprehension of facts; (7) When the

Court of Appeals failed to notice certain relevant facts which, if

properly considered, would justify a different conclusion; (8) When

the findings of fact are themselves conflicting; (9) When the

findings of fact are conclusions without citation of the specific

evidence on which they are based; and (10) When the findings of

fact of the Court of Appeals are premised on the absence of

evidence but such findings are contradicted by the evidence on

record.

Same; Same; Same; Stevedoring Service; A Stevedore

company engaged in discharging cargo has the duty to load the

cargo in a prudent manner, and it is liable for injury to, or loss of,

cargo caused by its negligence and where the officers and

members and crew of the vessel do nothing and have noresponsibility in the discharge of cargo by stevedores the vessel is

not liable for loss of, or damage to, the cargo caused by the

negligence of the stevedores.The fact that NSC actually accepted

and proceeded to remove the cargo from the ship during

unfavorable weather will not make VSI liable for any damage

caused thereby. In passing, it may be noted that the NSC may

seek indemnification, subject to the laws on prescription, from the

stevedoring company at fault in the discharge operations. A

stevedore company engaged in discharging cargo x x x has theduty to load the cargo x x x in a prudent manner, and it is liable for


17/48

injury to, or loss of, cargo caused by its negligence x x x and where

the officers and members and crew of the vessel do nothing and

have no responsibility in the discharge of cargo by stevedores x x x

the vessel is not liable for loss of, or damage to, the cargo caused

by the negligence of the stevedores x x x as in the instant case.

Evidence; Hearsay Rule; Entries in official records made in the

performance of a duty by a public officer of the Philippines, or by a

person in the performance of a duty specially enjoined by law, are

prima facie evidence of the facts therein stated.We find,

however, that Exhibit 11 is admissible under a well-settled

exception to the hearsay rule per Section 44 of Rule 130 of the

Rules of Court, which provides that (e)ntries in official records

made in the performance of a duty by a public officer of the

Philippines, or by a person in the performance of a duty specially

enjoined by law, areprima facieevidence of the facts therein

stated. Exhibit 11 is an original certificate of the Philippine Coast

Guard in Cebu issued by Lieutenant Junior Grade Noli C. Flores to

the effect that the vessel VLASONS I was drylocked x x x and

PCG Inspectors were sent on board for inspection x x x. After

completion of drydocking and duly inspected by PCG Inspectors,

the vessel VLASONS I, a cargo vessel, is in seaworthy condition,

meets all requirements, fitted and equipped for trading as a cargo

vessel, was cleared by the Philippine Coast Guard and sailed for

Cebu Port on July 10, 1974. (sic) NSCs claim, therefore, is

obviously misleading and erroneous.

Ships and Shipping; Words and Phrases; Demurrage andLaytime, Explained.The Court defined demurrage in its strict

sense as the compensation provided for in the contract of

affreightment for the detention of the vessel beyond the laytime or

that period of time agreed on for loading and unloading of cargo. It

is given to compensate the shipowner for the nonuse of the vessel.

On the other hand, the following is well-settled: Laytime runs

according to the particular clause of the charter party. x x x If

laytime is expressed in running days, this means days when the

ship would be run continuously, and holidays are not expected. A

qualification of weather permitting excepts only those days when

bad weather reasonably prevents the work contemplated.

Same; Same; Same; Where laytime is qualified as

WWDSHINC or weather, working days Sundays and holidays, the

running of laytime is made subject to the weather, and would

cease to run in the event unfavorable weather interferes with the

unloading of cargo.In this case, the contract of voyage charter

hire provided for a four-day laytime; it also qualified laytime as

WWDSHINC or weather, working days Sundays and holidays

included. The running of laytime was thus made subject to the

weather, and would cease to run in the event unfavorable weather

interfered with the unloading of cargo. Consequently, NSC may not

be held liable for demurrage as the four-day laytime allowed it did

not lapse, having been tolled by unfavorable weather condition in

view of the WWDSHINC qualification agreed upon by the parties.

Clearly, it was error for the trial court and the Court of Appeals to

have found and affirmed respectively that NSC incurred eleven

days of delay in unloading the cargo. The trial court arrived at this

erroneous finding by subtracting from the twelve days, specifically

August 13, 1974 to August 24, 1974, the only day of unloading

unhampered by unfavorable weather or rain, which was August 22,

1974. Based on our previous discussion, such finding is a reversible

error. As mentioned, the respondent appellate court also erred in

ruling that NSC was liable to VSI for demurrage, even if it reduced

the amount by half.

Attorneys Fees; The mere fact that a party was compelled tolitigate to protect its rights will not justify an award of attorneys

fees under Article 2208 of the Civil Code when no sufficient

showing of bad faith would be reflected in the other partys

persistence in a case other than an erroneous conviction of the

righteousness of his cause.VSI assigns as error of law the Court

of Appeals deletion of the award of attorneys fees. We disagree.

While VSI was compelled to litigate to protect its rights, such fact

by itself will not justify an award of attorneys fees under Article

2208 of the Civil Code when x x x no sufficient showing of badfaith would be reflected in a partys persistence in a case other


18/48

than an erroneous conviction of the righteousness of his cause x x

x. Moreover, attorneys fees may not be awarded to a party for

the reason alone that the judgment rendered was favorable to the

latter, as this is tantamount to imposing a premium on ones right

to litigate or seek judicial redress of legitimate grievances.

G.R. No. 101503. September 15, 1993.*

PLANTERS PRODUCTS, INC., petitioner, vs.COURT OF

APPEALS, SORIAMONT STEAMSHIP AGENCIES AND KYOSEI

KISEN KABUSHIKI KAISHA, respondents.

Words and Phrases; Shipping; Charter Party defined.A

charter-party is defined as a contract by which an entire ship, or

some principal part thereof, is let by the owner to another person

for a specified time or use; a contract of affreightment by which

the owner of a ship or other vessel lets the whole or a part of her

to a merchant or other person for the conveyance of goods, on a

particular voyage, in consideration of the payment of freight;

Charter parties are of two types: (a) contract of affreightment

which involves the use of shipping space on vessels leased by the

owner in part or as a whole, to carry goods for others; and, (b)

charter by demise or bareboat charter, by the terms of which the

whole vessel is let to the charterer with a transfer to him of its

entire command and possession and consequent control over its

navigation, including the master and the crew, who are his

servants. Contract of affreightment may either be time charter,

wherein the vessel is leased to the charterer for a fixed period oftime, 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 period of time or for a

single or consecutive voyage, the shipowner to supply the ships

stores, pay for the wages of the master and the crew, and defray

the expenses for the maintenance of the ship.

Same; Same; Common Carrier defined.Upon the other

hand, the term common or public carrier is defined in Art. 1732

of the Civil Code. The definition extends to carriers either by land,air or water which hold themselves out as ready to engage in

carrying goods or transporting passengers or both for

compensation as a public employment and not as a casual

occupation. The distinction between a common or public carrier

and a private or special carrier lies in the character of the

business, such that if the undertaking is a single transaction, not a

part of the general business or occupation, although involving the

carriage of goods for a fee, the person or corporation offering such

service is a private carrier.

Shipping; Transportation; Evidence; Common carriers required

to observe extraordinary diligence and presumed at fault; no such

presumption applies to private carriers.Article 1733 of the New

Civil Code mandates that common carriers, by reason of the nature

of their business, should observe extraordinary diligence in the

vigilance over the goods they carry. In the case of private carriers,

however, the exercise of ordinary diligence in the carriage of goods

will suffice. Moreover, in case of loss, destruction or deterioration

of the goods, common carriers are presumed to have been at fault

or to have acted negligently, and the burden of proving otherwise

rests on them. On the contrary, no such presumption applies to

private carriers, for whosoever alleges damage to or deterioration

of the goods carried has the onus of proving that the cause was the

negligence of the carrier.

Same; Same; Same; In a time or voyage charter, in contrast

to a bareboat charter, the ship remains a common or public

carrier.It is therefore imperative that a public carrier shall remain

as such, notwithstanding the charter of the whole or portion of avessel 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 the vessel and its crew, as in

a bareboat or demise that a common carrier becomes private, at

least insofar as the particular voyage covering the charter-party is

concerned. Indubitably, a shipowner in a time or voyage charter

retains possession and control of the ship, although her holds may,

for the moment, be the property of the charterer.

Same; Same; Same; In the common carriage of highly solublegoods, like fertilizer, it is the shipper or owner of the goods that


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commonly face risk of loss or damage.Indeed, we agree with

respondent carrier that bulk shipment of highly soluble goods like

fertilizer carries with it the risk of loss or damage. More so, with a

variable weather condition prevalent during its unloading, as was

the case at bar. This is a risk the shipper or the owner of the goods

has to face. Clearly, respondent carrier has sufficiently proved the

inherent character of the goods which makes it highly vulnerable to

deterioration; as well as the inadequacy of its packaging which

further contributed to the loss. On the other hand, no proof was

adduced by the petitioner showing that the carrier was remiss in

the exercise of due diligence in order to minimize the loss or

damage to the goods it carried.


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Government Regulation of CommonCarriers Business

G.R. No. 115381. December 23, 1994.*

KILUSANG MAYO UNO LABOR CENTER, petitioner, vs.HON.

JESUS B. GARCIA, JR., the LAND TRANSPORTATION

FRANCHISING AND REGULATORY BOARD, and the

PROVINCIAL BUS OPERATORS ASSOCIATION OF THE

PHILIPPINES, respondents.

Public Utilities; Common Carriers; Words and Phrases; When

one devotes his property to a use in which the public has an

interest, he, in effect grants to the public an interest in that use,

and must submit to the control by the public for the common good,

to the extent of the interest he has thus created.Public utilities

are privately owned and operated businesses whose services are

essential to the general public. They are enterprises which specially

cater to the needs of the public and conduce to their comfort and

convenience. As such, public utility services are impressed with

public interest and concern. The same is true with respect to the

business of common carrier which holds such a peculiar relation to

the public interest that there is superinduced upon it the right of

public regulation when private properties are affected with public

interest, hence, they cease to bejuris privationly. When,

therefore, one devotes his property to a use in which the public has

an interest, he, in effect grants to the public an interest in that use,and must submit to the control by the public for the common good,

to the extent of the interest he has thus created.

Same; Same; Judicial Review; Parties; Words and

Phrases;Judicial Power, Defined.The requirement of locus

standiinheres from the definition of judicial power. In Lamb v.

Phipps, we ruled that judicial power is the power to hear and

decide causes pending between parties who have the right to sue

in the courts of law and equity. Corollary to this provision is the

principle of locus standiof a party litigant. One who is directly

affected by, and whose interest is immediate and substantial in the

controversy has the standing to sue. The rule therefore requires

that a party must show a personal stake in the outcome of the case

or an injury to himself that can be redressed by a favorable

decision so as to warrant an invocation of the courts jurisdiction

and to justify the exercise of the courts remedial powers in his

behalf.

Same; Same; Same; Same; The KMU, whose members had

suffered and continue to suffer grave and irreparable injury and

damage from the implementation of certain government

memoranda, circulars and orders affecting common carriers, has

the standing to sue to question the same.At the outset, the

threshold issue of locus standimust be struck. Petitioner KMU has

the standing to sue. In the case at bench, petitioner, whose

members had suffered and continue to suffer grave and irreparable

injury and damage from the implementation of the questioned

memoranda, circulars and/or orders, has shown that it has a clear

legal right that was violated and continues to be violated with the

enforcement of the challenged memoranda, circulars and/or

orders. KMU members, who avail of the use of buses, trains and

jeepneys everyday, are directly affected by the burdensome cost of

arbitrary increase in passenger fares. They are part of the millions

of commuters who comprise the riding public. Certainly, their rights

must be protected, not neglected nor ignored.

Same; Same; Same; Same; The Supreme Court is ready to

brush aside a procedural infirmity when the issues raised are oftranscendental importance.Assuming arguendo that petitioner is

not possessed of the standing to sue, this court is ready to brush

aside this barren procedural infirmity and recognize the legal

standing of the petitioner in view of the transcendental importance

of the issues raised. And this act of liberality is not without judicial

precedent. As early as the Emergency Powers Cases, this Court had

exercised its discretion and waived the requirement of proper

party.

Same; Same; Political Law; Administrative Law; Delegation ofPowers; Power of Subordinate Legislation; The Legislature has


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delegated to the defunct Public Service Commission, and presently

the LTFRB, the power of fixing the rates of public services.Under

the foregoing provision, the Legislature delegated to the defunct

Public Service Commission the power of fixing the rates of public

services. Respondent LTFRB, the existing regulatory body today, is

likewise vested with the same under Executive Order No. 202

dated June 19, 1987. Section 5(c) of the said executive order

authorizes LTFRB to determine, prescribe, approve and

periodically review and adjust, reasonable fares, rates and other

related charges, relative to the operation of public land

transportation services provided by motorized vehicles.

Same; Same; Same; Same; Same; Same; Given the task of

determining sensitive and delicate matters as route-fixing and rate-

making for the transport sector, the responsible regulatory body is

entrusted with the power of subordinate legislation, under which

such administrative body may implement broad policies laid down

in a statute by filling in the details which the Legislature may

neither have

time nor competence to provide.Such delegation of legislative

power to an administrative agency is permitted in order to adapt to

the increasing complexity of modern life. As subjects for

governmental regulation multiply, so does the difficulty of

administering the laws. Hence, specialization even in legislation has

become necessary. Given the task of determining sensitive and

delicate matters as route-fixing and rate-making for the transport

sector, the responsible regulatory body is entrusted with the powerof subordinate legislation. With this authority, an administrative

body and in this case, the LTFRB, may implement broad policies

laid down in a statute by filling in the details which the

Legislature may neither have time nor competence to provide.

However, nowhere under the aforesaid provisions of law are the

regulatory bodies, the PSC and LTFRB alike, authorized to delegate

that power to a common carrier, a transport operator, or other

public service.

Same; Same; Same; Same; Same; The authority given by theLTFRB to the provincial bus operators to set a fare range over and

above the authorized existing fare, is illegal and invalid as it is

tantamount to an undue delegation of legislative authority;

Potestas delegata non delegari potest.In the case at bench, the

authority given by the LTFRB to the provincial bus operators to set

a fare range over and above the authorized existing fare, is illegal

and invalid as it is tanta-mount to an undue delegation of

legislative authority. Potestas delegata non delegari potest. What

has been delegated cannot be delegated. This doctrine is based on

the ethical principle that such a delegated power constitutes not

only a right but a duty to be performed by the delegate through

the instrumentality of his own judgment and not through the

intervening mind of another. A further delegation of such power

would indeed constitute a negation of the duty in violation of the

trust reposed in the delegate mandated to discharge it directly.

Same; Same; Same; Same; Same; Rate Fixing; Rate making

or rate fixing is a delicate and sensitive government function that

requires dexterity of judgment and sound discretion with the

settled goal of arriving at a just and reasonable rate acceptable to

both the public utility and the public.Moreover, rate making or

rate fixing is not an easy task. It is a delicate and sensitive

government function that requires dexterity of judgment and sound

discretion with the settled goal of arriving at a just and reasonable

rate acceptable to both the public utility and the public. Several

factors, in fact, have to be taken into consideration before a

balance could be achieved. A rate should not be confiscatory as

would place an operator in a situation where he will continue tooperate at a loss. Hence, the rate should enable public utilities to

generate revenues sufficient to cover operational costs and provide

reasonable return on the investments. On the other hand, a rate

which is too high becomes discriminatory. It is contrary to public

interest. A rate, therefore, must be reasonable and fair and must

be affordableto the end user who will utilize the services.

Same; Same; Same; Same; Same; Same; Due Process; The

government must not relinquish the important function of rate-

fixing; The people deserve to be given full opportunity to be heardin their opposition to any fare increase.Given the complexity of


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the nature of the function of rate-fixing and its far-reaching effects

on millions of commuters, government must not relinquish this

important function in favor of those who would benefit and profit

from the industry. Neither should the requisite notice and hearing

be done away with. The people, represented by reputable

oppositors, deserve to be given full opportunity to be heard in their

opposition to any fare increase.

Same; Same; Certificates of Public Convenience (CPC); Words

and Phrases; CPC, Explained; Requisites before a CPC may be

granted.A certificate of public convenience (CPC) is an

authorization granted by the LTFRB for the operation of land

transportation services for public use as required by law. Pursuant

to Section 16(a) of the Public Service Act, as amended, the

following requirements must be met before a CPC may be granted,

to wit: (i) the applicant must be a citizen of the Philippines, or a

corporation or co-partnership, association or joint-stock company

constituted and organized under the laws of the Philippines, at

least 60 per centum of its stock or paid-up capital must belong

entirely to citizens of the Philippines; (ii) the applicant must be

financially capable of undertaking the proposed service and

meeting the responsibilities incident to its operation; and (iii) the

applicant must prove that the operation of the public service

proposed and the authorization to do business will promote the

public interest in a proper and suitable manner. It is understood

that there must be proper notice and hearing before the PSC can

exercise its power to issue a CPC.Same; Same; Same; Administrative Law; Statutory

Construction;In case of conflict between a statute and an

administrative order, the former must prevail.The above-quoted

provision is entirely incompatible and inconsistent with Section

16(c)(iii) of the Public Service Act which requires that before a CPC

will be issued, the applicant must prove by proper notice and

hearing that the operation of the public service proposed will

promote public interest in a proper and suitable manner. On the

contrary, the policy guideline states that the presumption of publicneed for a public service shall be deemed in favor of the applicant.

In case of conflict between a statute and an administrative order,

the former must prevail.

Same; Same; Same; Same; Evidence; Presumptions; The

existence or non-existence of public convenience and necessity is a

question of fact that must be established by evidence in a public

hearing conducted for that purpose.By its terms, public

convenience or necessity generally means something fitting or

suited to the public need. As one of the basic requirements for the

grant of a CPC, public convenience and necessity exists when the

proposed facility or service meets a reasonable want of the public

and supply a need, which the existing facilities do not adequately

supply. The existence or non-existence of public convenience and

necessity is therefore a question of fact that must be established

by evidence, real and/or testimonial; empirical data; statistics and

such other means necessary, in a public hearing conducted for that

purpose. The object and purpose of such procedure, among other

things, is to look out for, and protect, the interests of both the

public and the existing transport operators. Verily, the power of a

regulatory body to issue a CPC is founded on the condition that

after full-dress hearing and investigation, it shall find, as a fact,

that the proposed operation is for the convenience of the public.

Same; Same; Same; Same; Same; Same; Separation of

Powers;Supreme Court; The establishment of a presumption of

public need in favor of an applicant for CPC reverses well-settled

and institutionalized judicial, quasi-judicial and administrative

procedures, and would in effect amend the Rules of Court byadding another disputable presumption under Rule 131; Only the

Supreme Court is mandated by law to promulgate rules concerning

pleading, practice and procedure.Other-wise stated, the

establishment of public need in favor of an applicant reverses well-

settled and institutionalized judicial, quasi-judicial and

administrative procedures. It allows the party who initiates the

proceedings to prove, by mere application, his affirmative

allegations. Moreover, the offending provisions of the LTFRB

memorandum circular in question would in effect amend the Rulesof Court by adding another disputable pre

transpo set 2 doctrines

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