CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A.

Civil Code definition of a common carrier; Tests)

Cases
G.R. No. L-47822 December 22, 1988 In his Answer, private respondent denied that he was a compensation, offering their services to
common carrier and argued that he could not be held the public.
responsible for the value of the lost goods, such loss having
PEDRO DE GUZMAN, petitioner,
been due to force majeure.
vs. The above article makes no distinction between one
COURT OF APPEALS and ERNESTO whose principal business activity is the carrying of persons or
CENDANA, respondents. On 10 December 1975, the trial court rendered a goods or both, and one who does such carrying only as
Decision 1 finding private respondent to be a common carrier an ancillary activity (in local Idiom as "a sideline"). Article
and holding him liable for the value of the undelivered goods 1732 also carefully avoids making any distinction between a
FELICIANO, J.:
(P 22,150.00) as well as for P 4,000.00 as damages and P person or enterprise offering transportation service on
2,000.00 as attorney's fees. a regular or scheduled basis and one offering such service
Respondent Ernesto Cendana, a junk dealer, was engaged on an occasional, episodic or unscheduled basis. Neither
in buying up used bottles and scrap metal in Pangasinan. does Article 1732 distinguish between a carrier offering its
On appeal before the Court of Appeals, respondent urged
Upon gathering sufficient quantities of such scrap material, services to the "general public," i.e., the general community
that the trial court had erred in considering him a common
respondent would bring such material to Manila for resale. or population, and one who offers services or solicits
carrier; in finding that he had habitually offered trucking
He utilized two (2) six-wheeler trucks which he owned for business only from a narrow segment of the general
services to the public; in not exempting him from liability on
hauling the material to Manila. On the return trip to population. We think that Article 1733 deliberaom making
the ground of force majeure; and in ordering him to pay
Pangasinan, respondent would load his vehicles with cargo such distinctions.
damages and attorney's fees.
which various merchants wanted delivered to differing
establishments in Pangasinan. For that service, respondent
So understood, the concept of "common carrier" under
charged freight rates which were commonly lower than The Court of Appeals reversed the judgment of the trial court
Article 1732 may be seen to coincide neatly with the notion
regular commercial rates. and held that respondent had been engaged in transporting
of "public service," under the Public Service Act
return loads of freight "as a casual
(Commonwealth Act No. 1416, as amended) which at least
occupation — a sideline to his scrap iron business" and not
Sometime in November 1970, petitioner Pedro de Guzman a partially supplements the law on common carriers set forth in
as a common carrier. Petitioner came to this Court by way of
merchant and authorized dealer of General Milk Company the Civil Code. Under Section 13, paragraph (b) of the Public
a Petition for Review assigning as errors the following
(Philippines), Inc. in Urdaneta, Pangasinan, contracted with Service Act, "public service" includes:
conclusions of the Court of Appeals:
respondent for the hauling of 750 cartons of Liberty filled milk
from a warehouse of General Milk in Makati, Rizal, to
... every person that now or hereafter
petitioner's establishment in Urdaneta on or before 4 1. that private respondent was not a
may own, operate, manage, or control in
December 1970. Accordingly, on 1 December 1970, common carrier;
the Philippines, for hire or
respondent loaded in Makati the merchandise on to his
compensation, with general or limited
trucks: 150 cartons were loaded on a truck driven by
2. that the hijacking of respondent's clientele, whether permanent,
respondent himself, while 600 cartons were placed on board
truck was force majeure; and occasional or accidental, and done for
the other truck which was driven by Manuel Estrada,
general business purposes, any
respondent's driver and employee.
common carrier, railroad, street railway,
3. that respondent was not liable for the
traction railway, subway motor vehicle,
value of the undelivered cargo. (Rollo, p. either for freight or passenger, or both,
Only 150 boxes of Liberty filled milk were delivered to
111) with or without fixed route and whatever
petitioner. The other 600 boxes never reached petitioner,
since the truck which carried these boxes was hijacked may be its classification, freight or
somewhere along the MacArthur Highway in Paniqui, Tarlac, We consider first the issue of whether or not private carrier service of any class, express
by armed men who took with them the truck, its driver, his respondent Ernesto Cendana may, under the facts earlier set service, steamboat, or steamship line,
helper and the cargo. forth, be properly characterized as a common carrier. pontines, ferries and water craft,
engaged in the transportation of
passengers or freight or both, shipyard,
On 6 January 1971, petitioner commenced action against The Civil Code defines "common carriers" in the following marine repair shop, wharf or dock, ice
private respondent in the Court of First Instance of terms: plant,
Pangasinan, demanding payment of P 22,150.00, the ice-refrigeration plant, canal, irrigation
claimed value of the lost merchandise, plus damages and
Article 1732. Common carriers are system, gas, electric light, heat and
attorney's fees. Petitioner argued that private respondent, power, water supply and power
persons, corporations, firms or
being a common carrier, and having failed to exercise the petroleum, sewerage system, wire or
extraordinary diligence required of him by the law, should be associations engaged in the business of
carrying or transporting passengers or wireless communications systems, wire
held liable for the value of the undelivered goods. or wireless broadcasting stations and
goods or both, by land, water, or air for

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CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
other similar public services. ... Article 1734 establishes the general rule that common private respondent to retain a security guard to ride with the
(Emphasis supplied) carriers are responsible for the loss, destruction or truck and to engage brigands in a firelight at the risk of his
deterioration of the goods which they carry, "unless the same own life and the lives of the driver and his helper.
is due to any of the following causes only:
It appears to the Court that private respondent is properly
characterized as a common carrier even though he merely The precise issue that we address here relates to the
"back-hauled" goods for other merchants from Manila to (1) Flood, storm, earthquake, lightning or other natural specific requirements of the duty of extraordinary diligence in
Pangasinan, although such back-hauling was done on a disaster or calamity; the vigilance over the goods carried in the specific context of
periodic or occasional rather than regular or scheduled (2) Act of the public enemy in war, whether international or hijacking or armed robbery.
manner, and even though private civil;
respondent's principal occupation was not the carriage of (3) Act or omission of the shipper or owner of the goods;
As noted earlier, the duty of extraordinary diligence in the
goods for others. There is no dispute that private respondent (4) The character-of the goods or defects in the packing or-in
vigilance over goods is, under Article 1733, given additional
charged his customers a fee for hauling their goods; that fee the containers; and
specification not only by Articles 1734 and 1735 but also by
frequently fell below commercial freight rates is not relevant (5) Order or act of competent public authority.
Article 1745, numbers 4, 5 and 6, Article 1745 provides in
here.
relevant part:
It is important to point out that the above list of causes of
The Court of Appeals referred to the fact that private loss, destruction or deterioration which exempt the common
Any of the following or similar
respondent held no certificate of public convenience, and carrier for responsibility therefor, is a closed list. Causes
stipulations shall be considered
concluded he was not a common carrier. This is palpable falling outside the foregoing list, even if they appear to
unreasonable, unjust and contrary to
error. A certificate of public convenience is not a requisite for constitute a species of force majeure fall within the scope of
public policy:
the incurring of liability under the Civil Code provisions Article 1735, which provides as follows:
governing common carriers. That liability arises the moment
a person or firm acts as a common carrier, without regard to xxx xxx xxx
In all cases other than those mentioned
whether or not such carrier has also complied with the
in numbers 1, 2, 3, 4 and 5 of the
requirements of the applicable regulatory statute and
preceding article, if the goods are lost, (5) that the common carrier shall not be responsible for the
implementing regulations and has been granted a certificate
destroyed or deteriorated, common acts or omissions of his or its employees;
of public convenience or other franchise. To exempt private
carriers are presumed to have been at
respondent from the liabilities of a common carrier because
fault or to have acted negligently, unless
he has not secured the necessary certificate of public (6) that the common carrier's liability for acts committed by
they prove that they observed
convenience, would be offensive to sound public policy; that thieves, or of robbers who donot act with grave or
extraordinary diligence as required in
would be to reward private respondent precisely for failing to irresistible threat, violence or force, is dispensed with or
Article 1733. (Emphasis supplied)
comply with applicable statutory requirements. The business diminished; and
of a common carrier impinges directly and intimately upon
the safety and well being and property of those members of Applying the above-quoted Articles 1734 and 1735, we note
the general community who happen to deal with such carrier. firstly that the specific cause alleged in the instant case — (7) that the common carrier shall not responsible for the loss,
The law imposes duties and liabilities upon common carriers the hijacking of the carrier's truck — does not fall within any destruction or deterioration of goods on account of the
for the safety and protection of those who utilize their defective condition of the car vehicle, ship, airplane or other
of the five (5) categories of exempting causes listed in Article
services and the law cannot allow a common carrier to 1734. It would follow, therefore, that the hijacking of the equipment used in the contract of carriage. (Emphasis
render such duties and liabilities merely facultative by simply carrier's vehicle must be dealt with under the provisions of supplied)
failing to obtain the necessary permits and authorizations. Article 1735, in other words, that the private respondent as
common carrier is presumed to have been at fault or to have Under Article 1745 (6) above, a common carrier is held
We turn then to the liability of private respondent as a
acted negligently. This presumption, however, may be responsible — and will not be allowed to divest or to diminish
common carrier.
overthrown by proof of extraordinary diligence on the part of such responsibility — even for acts of strangers like thieves
private respondent. or robbers, except where such thieves or robbers in fact
acted "with grave or irresistible threat, violence or force." We
Common carriers, "by the nature of their business and for believe and so hold that the limits of the duty of extraordinary
Petitioner insists that private respondent had not observed
reasons of public policy" 2 are held to a very high degree of diligence in the vigilance over the goods carried are reached
extraordinary diligence in the care of petitioner's goods.
care and diligence ("extraordinary diligence") in the carriage where the goods are lost as a result of a robbery which is
Petitioner argues that in the circumstances of this case,
of goods as well as of passengers. The specific import of attended by "grave or irresistible threat, violence or force."
private respondent should have hired a security guard
extraordinary diligence in the care of goods transported by a
presumably to ride with the truck carrying the 600 cartons of
common carrier is, according to Article 1733, "further
Liberty filled milk. We do not believe, however, that in the In the instant case, armed men held up the second truck
expressed in Articles 1734,1735 and 1745, numbers 5, 6 and
instant case, the standard of extraordinary diligence required owned by private respondent which carried petitioner's
7" of the Civil Code.

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CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
cargo. The record shows that an information for robbery in SYLLABUS 3. ID.; ID.; HIJACKING OF GOODS; CARRIER PRESUMED
band was filed in the Court of First Instance of Tarlac, NEGLIGENT; HOW CARRIER ABSOLVED FROM
Branch 2, in Criminal Case No. 198 entitled "People of the LIABILITY. — In De Guzman vs. Court of Appeals, the Court
1. CIVIL LAW; COMMON CARRIERS; DEFINED; TEST TO
Philippines v. Felipe Boncorno, Napoleon Presno, Armando held that hijacking, not being included in the provisions of
DETERMINE COMMON CARRIER. — Article 1732 of the
Mesina, Oscar Oria and one John Doe." There, the accused Article 1734, must be dealt with under the provisions of
Civil Code defines a common carrier as "(a) person,
were charged with willfully and unlawfully taking and carrying Article 1735 and thus, the common carrier is presumed to
corporation or firm, or association engaged in the business of
away with them the second truck, driven by Manuel Estrada have been at fault or negligent. To exculpate the carrier from
carrying or transporting passengers or goods or both, by
and loaded with the 600 cartons of Liberty filled milk destined liability arising from hijacking, he must prove that the robbers
land, water or air, for compensation, offering their services to
for delivery at petitioner's store in Urdaneta, Pangasinan. or the hijackers acted with grave or irresistible threat,
the public." The test to determine a common carrier is
The decision of the trial court shows that the accused acted violence, or force. This is in accordance with Article 1745 of
"whether the given undertaking is a part of the business
with grave, if not irresistible, threat, violence or force. 3 Three the Civil Code which provides: "Art. 1745. Any of the
engaged in by the carrier which he has held out to the
(3) of the five (5) hold-uppers were armed with firearms. The following or similar stipulations shall be considered
general public as his occupation rather than the quantity or
robbers not only took away the truck and its cargo but also unreasonable, unjust and contrary to public policy . . . (6)
extent of the business transacted." . . . The holding of the
kidnapped the driver and his helper, detaining them for That the common carrier's liability for acts committed by
Court in De Guzman vs. Court of Appeals is instructive. In
several days and later releasing them in another province (in thieves, or of robbers who do not act with grave or irresistible
referring to Article 1732 of the Civil Code, it held thus: "The
Zambales). The hijacked truck was subsequently found by threat, violences or force, is dispensed with or diminished"; In
above article makes no distinction between one whose
the police in Quezon City. The Court of First Instance the same case, the Supreme Court also held that: "Under
principal business activity is the carrying of persons or goods
convicted all the accused of robbery, though not of robbery in Article 1745 (6) above, a common carrier is held responsible
or both, and one who does such carrying only as an ancillary
band. 4 — and will not be allowed to divest or to diminish such
activity (in local idiom, as a "sideline"). Article 1732 also
responsibility — even for acts of strangers like thieves or
carefully avoids making any distinction between a person or
robbers, except where such thieves or robbers in fact acted
In these circumstances, we hold that the occurrence of the enterprise offering transportation service on a regular or
"with grave of irresistible threat, violence of force," We
loss must reasonably be regarded as quite beyond the scheduled basis and one offering such service on an
believe and so hold that the limits of the duty of extraordinary
control of the common carrier and properly regarded as a occasional, episodic or unscheduled basis. Neither does
diligence in the vigilance over the goods carried are reached
fortuitous event. It is necessary to recall that even common Article 1732 distinguished between a carrier offering its
where the goods are lost as a result of a robbery which is
carriers are not made absolute insurers against all risks of services to the "general public," i.e., the general community
attended by "grave or irresistible threat, violence or force."
travel and of transport of goods, and are not held liable for or population, and one who offers services or solicits
acts or events which cannot be foreseen or are inevitable, business only from a narrow segment of the general
provided that they shall have complied with the rigorous population. We think that Article 1732 deliberately refrained 4. REMEDIAL LAW; EVIDENCE; JUDICIAL ADMISSIONS
standard of extraordinary diligence. from making such distinctions." CONCLUSIVE. — In this case, petitioner herself has made
the admission that she was in the trucking business, offering
her trucks to those with cargo to move. Judicial admissions
We, therefore, agree with the result reached by the Court of 2. ID.; ID.; DILIGENCE REQUIRED IN VIGILANCE OVER
are conclusive and no evidence is required to prove the
Appeals that private respondent Cendana is not liable for the GOODS TRANSPORTED; WHEN PRESUMPTION OF
same.
value of the undelivered merchandise which was lost NEGLIGENCE ARISES; HOW PRESUMPTION
because of an event entirely beyond private respondent's OVERCAME; WHEN PRESUMPTION MADE ABSOLUTE.
control. — Common carriers are obliged to observe extraordinary 5. ID.; ID.; BURDEN OF PROOF RESTS WITH PARTY
diligence in the vigilance over the goods transported by WHO ALLEGES A FACT. — Petitioner presented no other
them. Accordingly, they are presumed to have been at fault proof of the existence of the contract of lease. He who
ACCORDINGLY, the Petition for Review on certiorari is
or to have acted negligently if the goods are lost, destroyed alleges a fact has the burden of proving it.
hereby DENIED and the Decision of the Court of Appeals
or deteriorated. There are very few instances when the
dated 3 August 1977 is AFFIRMED. No pronouncement as
presumption of negligence does not attach and these
to costs. 6. ID.; ID.; AFFIDAVITS NOT CONSIDERED BEST
instances are enumerated in Article 1734. In those cases
EVIDENCE IF AFFIANTS AVAILABLE AS WITNESSES. —
where the presumption is applied, the common carrier must
While the affidavit of Juanito Morden, the truck helper in the
SO ORDERED. prove that it exercised extraordinary diligence in order to
hijacked truck, was presented as evidence in court, he
overcome the presumption . . . The presumption of
himself was a witness as could be gleaned from the contents
negligence was raised against petitioner. It was petitioner's
G.R. No. 101089. April 7, 1993. of the petition. Affidavits are not considered the best
burden to overcome it. Thus, contrary to her assertion,
evidence if the affiants are available as witnesses.
private respondent need not introduce any evidence to prove
ESTRELLITA M. BASCOS, petitioners, her negligence. Her own failure to adduce sufficient proof of
vs. extraordinary diligence made the presumption conclusive 7. CIVIL LAW; OBLIGATIONS AND CONTRACTS;
COURT OF APPEALS and RODOLFO A. CIPRIANO, against her. CONTRACT IS WHAT LAW DEFINES IT TO BE. —
respondents. Granting that the said evidence were not self-serving, the
same were not sufficient to prove that the contract was one

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CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
of lease. It must be understood that a contract is what the "4. That this action is one of those specifically mentioned in The "Urgent Motion To Dissolve/Lift preliminary Attachment"
law defines it to be and not what it is called by the Sec. 1, Rule 57 the Rules of Court, whereby a writ of dated March 10, 1987 filed by defendant is DENIED for
contracting parties. preliminary attachment may lawfully issue, namely: being moot and academic.

DECISION "(e) in an action against a party who has removed or SO ORDERED." 6

disposed of his property, or is about to do so, with intent to
defraud his creditors;"
CAMPOS, JR., J p: Petitioner appealed to the Court of Appeals but respondent
Court affirmed the trial court's judgment.
5. That there is no sufficient security for the claim sought to
This is a petition for review on certiorari of the decision ** of
be enforced by the present action;
the Court of Appeals in "RODOLFO A. CIPRIANO, doing Consequently, petitioner filed this petition where she makes
business under the name CIPRIANO TRADING the following assignment of errors; to wit:
ENTERPRISES plaintiff-appellee, vs. ESTRELLITA M. 6. That the amount due to the plaintiff in the above-entitled
BASCOS, doing business under the name of BASCOS case is above all legal counterclaims;"
"I. THE RESPONDENT COURT ERRED IN HOLDING THAT
TRUCKING, defendant-appellant," C.A.-G.R. CV No. 25216,
THE CONTRACTUAL RELATIONSHIP BETWEEN
the dispositive portion of which is quoted hereunder:
The trial court granted the writ of preliminary attachment on PETITIONER AND PRIVATE RESPONDENT WAS
February 17, 1987. CARRIAGE OF GOODS AND NOT LEASE OF CARGO
"PREMISES considered, We find no reversible error in the TRUCK.
decision appealed from, which is hereby affirmed in toto.
In her answer, petitioner interposed the following defenses:
Costs against appellant." 1
that there was no contract of carriage since CIPTRADE II. GRANTING, EX GRATIA ARGUMENTI, THAT THE
leased her cargo truck to load the cargo from Manila Port FINDING OF THE RESPONDENT COURT THAT THE
The facts, as gathered by this Court, are as follows: Area to Laguna; that CIPTRADE was liable to petitioner in CONTRACTUAL RELATIONSHIP BETWEEN PETITIONER
the amount of P11,000.00 for loading the cargo; that the AND PRIVATE RESPONDENT WAS CARRIAGE OF
truck carrying the cargo was hijacked along Canonigo St., GOODS IS CORRECT, NEVERTHELESS, IT ERRED IN
Rodolfo A. Cipriano representing Cipriano Trading Enterprise
Paco, Manila on the night of October 21, 1988; that the FINDING PETITIONER LIABLE THEREUNDER BECAUSE
(CIPTRADE for short) entered into a hauling contract 2 with
hijacking was immediately reported to CIPTRADE and that THE LOSS OF THE CARGO WAS DUE TO FORCE
Jibfair Shipping Agency Corporation whereby the former
petitioner and the police exerted all efforts to locate the MAJEURE, NAMELY, HIJACKING.
bound itself to haul the latter's 2,000 m/tons of soya bean
hijacked properties; that after preliminary investigation, an
meal from Magallanes Drive, Del Pan, Manila to the
information for robbery and carnapping were filed against
warehouse of Purefoods Corporation in Calamba, Laguna. III. THE RESPONDENT COURT ERRED IN AFFIRMING
Jose Opriano, et al.; and that hijacking, being a force
To carry out its obligation, CIPTRADE, through Rodolfo THE FINDING OF THE TRIAL COURT THAT
majeure, exculpated petitioner from any liability to
Cipriano, subcontracted with Estrellita Bascos (petitioner) to PETITIONER'S MOTION TO DISSOLVE/LIFT THE WRIT
CIPTRADE.
transport and to deliver 400 sacks of soya bean meal worth OF PRELIMINARY ATTACHMENT HAS BEEN RENDERED
P156,404.00 from the Manila Port Area to Calamba, Laguna MOOT AND ACADEMIC BY THE DECISION OF THE
at the rate of P50.00 per metric ton. Petitioner failed to After trial, the trial court rendered a decision *** the MERITS OF THE CASE." 7
deliver the said cargo. As a consequence of that failure, dispositive portion of which reads as follows:
Cipriano paid Jibfair Shipping Agency the amount of the lost
The petition presents the following issues for resolution: (1)
goods in accordance with the contract which stated that:
"WHEREFORE, judgment is hereby rendered in favor of was petitioner a common carrier?; and (2) was the hijacking
plaintiff and against defendant ordering the latter to pay the referred to a force majeure?
"1. CIPTRADE shall be held liable and answerable for any former:
loss in bags due to theft, hijacking and non-delivery or
The Court of Appeals, in holding that petitioner was a
damages to the cargo during transport at market value, . . ."
1. The amount of ONE HUNDRED FIFTY-SIX THOUSAND common carrier, found that she admitted in her answer that
3
FOUR HUNDRED FOUR PESOS (P156,404.00) as an (sic) she did business under the name A.M. Bascos Trucking and
for actual damages with legal interest of 12% per cent per that said admission dispensed with the presentation by
Cipriano demanded reimbursement from petitioner but the annum to be counted from December 4, 1986 until fully paid; private respondent, Rodolfo Cipriano, of proofs that petitioner
latter refused to pay. Eventually, Cipriano filed a complaint was a common carrier. The respondent Court also adopted
for a sum of money and damages with writ of preliminary in toto the trial court's decision that petitioner was a common
2. The amount of FIVE THOUSAND PESOS (P5,000.00) as
attachment 4 for breach of a contract of carriage. The prayer carrier, Moreover, both courts appreciated the following
and for attorney's fees; and
for a Writ of Preliminary Attachment was supported by an pieces of evidence as indicators that petitioner was a
affidavit 5 which contained the following allegations: common carrier: the fact that the truck driver of petitioner,
3. The costs of the suit. Maximo Sanglay, received the cargo consisting of 400 bags

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Cases
of soya bean meal as evidenced by a cargo receipt signed "The above article makes no distinction between one whose force. This is in accordance with Article 1745 of the Civil
by Maximo Sanglay; the fact that the truck helper, Juanito principal business activity is the carrying of persons or goods Code which provides:
Morden, was also an employee of petitioner; and the fact that or both, and one who does such carrying only as an ancillary
control of the cargo was placed in petitioner's care. activity (in local idiom, as a "sideline"). Article 1732 also
"Art. 1745. Any of the following or similar stipulations shall be
carefully avoids making any distinction between a person or
considered unreasonable, unjust and contrary to public
enterprise offering transportation service on a regular or
In disputing the conclusion of the trial and appellate courts policy;
scheduled basis and one offering such service on an
that petitioner was a common carrier, she alleged in this
occasional, episodic or unscheduled basis. Neither does
petition that the contract between her and Rodolfo A.
Article 1732 distinguish between a carrier offering its xxx xxx xxx
Cipriano, representing CIPTRADE, was lease of the truck.
services to the "general public," i.e., the general community
She cited as evidence certain affidavits which referred to the
or population, and one who offers services or solicits
contract as "lease". These affidavits were made by Jesus (6) That the common carrier's liability for acts committed by
business only from a narrow segment of the general
Bascos 8 and by petitioner herself. 9 She further averred that thieves, or of robbers who do not act with grave or irresistible
population. We think that Article 1732 deliberately refrained
Jesus Bascos confirmed in his testimony his statement that threat, violences or force, is dispensed with or diminished;"
from making such distinctions."
the contract was a lease contract. 10 She also stated that:
she was not catering to the general public. Thus, in her
answer to the amended complaint, she said that she does Regarding the affidavits presented by petitioner to the court, In the same case, 21 the Supreme Court also held that:
business under the same style of A.M. Bascos Trucking, both the trial and appellate courts have dismissed them as
offering her trucks for lease to those who have cargo to self-serving and petitioner contests the conclusion. We are "Under Article 1745 (6) above, a common carrier is held
move, not to the general public but to a few customers only bound by the appellate court's factual conclusions. Yet, responsible — and will not be allowed to divest or to diminish
in view of the fact that it is only a small business. 11 granting that the said evidence were not self-serving, the such responsibility — even for acts of strangers like thieves
same were not sufficient to prove that the contract was one or robbers except where such thieves or robbers in fact
of lease. It must be understood that a contract is what the acted with grave or irresistible threat, violence or force. We
We agree with the respondent Court in its finding that
law defines it to be and not what it is called by the believe and so hold that the limits of the duty of extraordinary
petitioner is a common carrier.
contracting parties. 15 Furthermore, petitioner presented no diligence in the vigilance over the goods carried are reached
other proof of the existence of the contract of lease. He who where the goods are lost as a result of a robbery which is
Article 1732 of the Civil Code defines a common carrier as alleges a fact has the burden of proving it. 16 attended by "grave or irresistible threat, violence or force."
"(a) person, corporation or firm, or association engaged in
the business of carrying or transporting passengers or goods
Likewise, We affirm the holding of the respondent court that To establish grave and irresistible force, petitioner presented
or both, by land, water or air, for compensation, offering their
the loss of the goods was not due to force majeure. her accusatory affidavit, 22 Jesus Bascos' affidavit, 23 and
services to the public." The test to determine a common
carrier is "whether the given undertaking is a part of the Juanito Morden's 24 "Salaysay". However, both the trial court
business engaged in by the carrier which he has held out to Common carriers are obliged to observe extraordinary and the Court of Appeals have concluded that these
affidavits were not enough to overcome the presumption.
the general public as his occupation rather than the quantity diligence in the vigilance over the goods transported by
or extent of the business transacted." 12 In this case, them. 17 Accordingly, they are presumed to have been at Petitioner's affidavit about the hijacking was based on what
petitioner herself has made the admission that she was in fault or to have acted negligently if the goods are lost, had been told her by Juanito Morden. It was not a first-hand
account. While it had been admitted in court for lack of
the trucking business, offering her trucks to those with cargo destroyed or deteriorated. 18 There are very few instances
to move. Judicial admissions are conclusive and no evidence when the presumption of negligence does not attach and objection on the part of private respondent, the respondent
is required to prove the same. 13 these instances are enumerated in Article 1734. 19 In those Court had discretion in assigning weight to such evidence.
We are bound by the conclusion of the appellate court. In a
cases where the presumption is applied, the common carrier
must prove that it exercised extraordinary diligence in order petition for review on certiorari, We are not to determine the
But petitioner argues that there was only a contract of lease probative value of evidence but to resolve questions of law.
to overcome the presumption.
because they offer their services only to a select group of Secondly, the affidavit of Jesus Bascos did not dwell on how
people and because the private respondents, plaintiffs in the the hijacking took place. Thirdly, while the affidavit of Juanito
lower court, did not object to the presentation of affidavits by In this case, petitioner alleged that hijacking constituted force Morden, the truck helper in the hijacked truck, was presented
petitioner where the transaction was referred to as a lease majeure which exculpated her from liability for the loss of the as evidence in court, he himself was a witness as could be
contract. cargo. In De Guzman vs. Court of Appeals, 20 the Court held gleaned from the contents of the petition. Affidavits are not
that hijacking, not being included in the provisions of Article considered the best evidence if the affiants are available as
1734, must be dealt with under the provisions of Article 1735 witnesses. 25 The subsequent filing of the information for
Regarding the first contention, the holding of the Court in De
and thus, the common carrier is presumed to have been at carnapping and robbery against the accused named in said
Guzman vs. Court of Appeals 14 is instructive. In referring to
fault or negligent. To exculpate the carrier from liability affidavits did not necessarily mean that the contents of the
Article 1732 of the Civil Code, it held thus:
arising from hijacking, he must prove that the robbers or the affidavits were true because they were yet to be determined
hijackers acted with grave or irresistible threat, violence, or in the trial of the criminal cases.

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The presumption of negligence was raised against petitioner. (VSI), both of which assail the August 12, 1993 Decision of The facts as found by Respondent Court of Appeals are as
It was petitioner's burden to overcome it. Thus, contrary to the Court of Appeals.1 The Court of Appeals modified the follows:
her assertion, private respondent need not introduce any decision of the Regional Trial Court of Pasig, Metro Manila,
evidence to prove her negligence. Her own failure to adduce Branch 163 in Civil Case No. 23317. The RTC disposed as
(1) On July 17, 1974, plaintiff National Steel
sufficient proof of extraordinary diligence made the follows:
Corporation (NSC) as Charterer and defendant
presumption conclusive against her.
Vlasons Shipping, Inc. (VSI) as Owner, entered
WHEREFORE, judgment is hereby rendered in into a Contract of Voyage Charter Hire (Exhibit "B";
Having affirmed the findings of the respondent Court on the favor of defendant and against the plaintiff also Exhibit "1") whereby NSC hired VSI's vessel,
substantial issues involved, We find no reason to disturb the dismissing the complaint with cost against plaintiff, the MV "VLASONS I" to make one (1) voyage to
conclusion that the motion to lift/dissolve the writ of and ordering plaintiff to pay the defendant on the load steel products at Iligan City and discharge
preliminary attachment has been rendered moot and counterclaim as follows: them at North Harbor, Manila, under the following
academic by the decision on the merits. terms and conditions, viz:
1. The sum of P75,000.00 as unpaid freight and
In the light of the foregoing analysis, it is Our opinion that the P88,000.00 as demurrage with interest at the legal 1. . . .
petitioner's claim cannot be sustained. The petition is rate on both amounts from April 7, 1976 until the
DISMISSED and the decision of the Court of Appeals is same shall have been fully paid;
2. Cargo: Full cargo of steel products of not less
hereby AFFIRMED.
than 2,500 MT, 10% more or less at Master's
2. Attorney's fees and expenses of litigation in the option.
SO ORDERED. sum of P100,000.00; and
3. . . .
G.R. No. 112287 December 12, 1997 3. Costs of suit.
4. Freight/Payment: P30.00/metric ton, FIOST
NATIONAL STEEL CORPORATION, petitioner, SO ORDERED.2 basis. Payment upon presentation of Bill of Lading
vs. within fifteen (15) days.
COURT OF APPEALS AND VLASONS SHIPPING,
On the other hand, the Court of Appeals ruled:
INC., respondents.
5. Laydays/Cancelling: July 26, 1974/Aug. 5, 1974.
WHEREFORE, premises considered, the decision
G.R. No. 112350 December 12, 1997
appealed from is modified by reducing the award 6. Loading/Discharging Rate: 750 tons per
for demurrage to P44,000.00 and deleting the WWDSHINC. (Weather Working Day of 24
VLASONS SHIPPING, INC., petitioner, award for attorney's fees and expenses of consecutive hours, Sundays and Holidays
vs. litigation. Except as thus modified, the decision is Included).
COURT OF APPEALS AND NATIONAL STEEL AFFIRMED. There is no pronouncement as to
CORPORATION, respondents. costs.
7. Demurrage/Dispatch: P8,000.00/P4,000.00 per
day.
PANGANIBAN, J.: SO ORDERED.3
8. . . .
The Court finds occasion to apply the rules on the The Facts
seaworthiness of private carrier, its owner's responsibility for
9. Cargo Insurance: Charterer's and/or Shipper's
damage to the cargo and its liability for demurrage and
The MV Vlasons I is a vessel which renders tramping service must insure the cargoes. Shipowners not
attorney's fees. The Court also reiterates the well-known rule
and, as such, does not transport cargo or shipment for the responsible for losses/damages except on proven
that findings of facts of trial courts, when affirmed by the
general public. Its services are available only to specific willful negligence of the officers of the vessel.
Court of Appeals, are binding on this Court.
persons who enter into a special contract of charter party
with its owner. It is undisputed that the ship is a private
10. Other terms: (a) All terms/conditions
The Case carrier. And it is in the capacity that its owner, Vlasons
of NONYAZAI C/P [sic] or other internationally
Shipping, Inc., entered into a contract of affreightment or
recognized Charter Party Agreement shall form
contract of voyage charter hire with National Steel
Before us are two separate petitions for review filed by part of this Contract.
Corporation.
National Steel Corporation (NSC) and Vlasons Shipping, Inc.

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xxx xxx xxx was placed in the three (3) hatches of the ship. amount of P941,145.18. Then on October 3, 1974,
Chief Mate Gonzalo Sabando, acting as agent of plaintiff formally demanded payment of said claim
the vessel[,] acknowledged receipt of the cargo on but defendant VSI refused and failed to pay.
The terms "F.I.O.S.T." which is used in the
board and signed the corresponding bill of lading, Plaintiff filed its complaint against defendant on
shipping business is a standard provision in the
B.L.P.P. No. 0233 (Exhibit "D") on August 8, 1974. April 21, 1976 which was docketed as Civil Case
NANYOZAI Charter Party which stands for "Freight
No. 23317, CFI, Rizal.
In and Out including Stevedoring and Trading",
which means that the handling, loading and (3) The vessel arrived with the cargo at Pier 12,
unloading of the cargoes are the responsibility of North Harbor, Manila, on August 12, 1974. The (6) In its complaint, plaintiff claimed that it
the Charterer. Under Paragraph 5 of the following day, August 13, 1974, when the vessel's sustained losses in the aforesaid amount of
NANYOZAI Charter Party, it states, "Charterers to three (3) hatches containing the shipment were P941,145.18 as a result of the act, neglect and
load, stow and discharge the cargo free of risk and opened by plaintiff's agents, nearly all the skids of default of the master and crew in the management
expenses to owners. . . . (Emphasis supplied). tinplates and hot rolled sheets were allegedly of the vessel as well as the want of due diligence
found to be wet and rusty. The cargo was on the part of the defendant to make the vessel
discharged and unloaded by stevedores hired by seaworthy and to make the holds and all other
Under paragraph 10 thereof, it is provided that
the Charterer. Unloading was completed only on parts of the vessel in which the cargo was carried,
"(o)wners shall, before and at the beginning of the
August 24, 1974 after incurring a delay of eleven fit and safe for its reception, carriage and
voyage, exercise due diligence to make the vessel
(11) days due to the heavy rain which interrupted preservation — all in violation of defendant's
seaworthy and properly manned, equipped and
the unloading operations. (Exhibit "E") undertaking under their Contract of Voyage
supplied and to make the holds and all other parts
Charter Hire.
of the vessel in which cargo is carried, fit and safe
for its reception, carriage and preservation. (4) To determine the nature and extent of the
Owners shall not be liable for loss of or damage of wetting and rusting, NSC called for a survey of the (7) In its answer, defendant denied liability for the
the cargo arising or resulting from: shipment by the Manila Adjusters and Surveyors alleged damage claiming that the MV "VLASONS
unseaworthiness unless caused by want of due Company (MASCO). In a letter to the NSC dated I" was seaworthy in all respects for the carriage of
diligence on the part of the owners to make the March 17, 1975 (Exhibit "G"), MASCO made a plaintiff's cargo; that said vessel was not a
vessel seaworthy, and to secure that the vessel is report of its ocular inspection conducted on the "common carrier" inasmuch as she was under
properly manned, equipped and supplied and to cargo, both while it was still on board the vessel voyage charter contract with the plaintiff as
make the holds and all other parts of the vessel in and later at the NDC warehouse in Pureza St., charterer under the charter party; that in the
which cargo is carried, fit and safe for its reception, Sta. Mesa, Manila where the cargo was taken and course of the voyage from Iligan City to Manila, the
carriage and preservation; . . . ; perils, dangers stored. MASCO reported that it found wetting and MV "VLASONS I" encountered very rough seas,
and accidents of the sea or other navigable rusting of the packages of hot rolled sheets and strong winds and adverse weather condition,
waters; . . . ; wastage in bulk or weight or any other metal covers of the tinplates; that tarpaulin hatch causing strong winds and big waves to
loss or damage arising from inherent defect, covers were noted torn at various extents; that continuously pound against the vessel and
quality or vice of the cargo; insufficiency of container/metal casings of the skids were rusting seawater to overflow on its deck and hatch covers,
packing; . . . ; latent defects not discoverable by all over. MASCO ventured the opinion that "rusting that under the Contract of Voyage Charter Hire,
due diligence; any other cause arising without the of the tinplates was caused by contact with SEA defendant shall not be responsible for
actual fault or privity of Owners or without the fault WATER sustained while still on board the vessel losses/damages except on proven willful
of the agents or servants of owners." as a consequence of the heavy weather and rough negligence of the officers of the vessel, that the
seas encountered while en route to destination officers of said MV "VLASONS I" exercised due
(Exhibit "F"). It was also reported that MASCO's diligence and proper seamanship and were not
Paragraph 12 of said NANYOZAI Charter Party
surveyors drew at random samples of bad order willfully negligent; that furthermore the Voyage
also provides that "(o)wners shall not be
packing materials of the tinplates and delivered the Charter Party provides that loading and
responsible for split, chafing and/or any damage
same to the M.I.T. Testing Laboratories for discharging of the cargo was on FIOST terms
unless caused by the negligence or default of the
analysis. On August 31, 1974, the M.I.T. Testing which means that the vessel was free of risk and
master and crew."
Laboratories issued Report No. 1770 (Exhibit "I") expense in connection with the loading and
which in part, states, "The analysis of bad order discharging of the cargo; that the damage, if any,
(2) On August 6, 7 and 8, 1974, in accordance with samples of packing materials . . . shows that was due to the inherent defect, quality or vice of
the Contract of Voyage Charter Hire, the MV wetting was caused by contact with SEA WATER". the cargo or to the insufficient packing thereof or to
"VLASONS I" loaded at plaintiffs pier at Iligan City, latent defect of the cargo not discoverable by due
the NSC's shipment of 1,677 skids of tinplates and diligence or to any other cause arising without the
(5) On September 6, 1974, on the basis of the
92 packages of hot rolled sheets or a total of 1,769 actual fault or privity of defendant and without the
aforesaid Report No. 1770, plaintiff filed with the
packages with a total weight of about 2,481.19 fault of the agents or servants of defendant;
defendant its claim for damages suffered due to
metric tons for carriage to Manila. The shipment consequently, defendant is not liable; that the
the downgrading of the damaged tinplates in the

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stevedores of plaintiff who discharged the cargo in (a) The MV "VLASONS I" is a shows that the MV "VLASONS
Manila were negligent and did not exercise due vessel of Philippine registry I" was seaworthy and properly
care in the discharge of the cargo; land that the engaged in the tramping manned, equipped and
cargo was exposed to rain and seawater spray service and is available for supplied when it undertook the
while on the pier or in transit from the pier to hire only under special voyage. It has all the required
plaintiff's warehouse after discharge from the contracts of charter party as in certificates of seaworthiness.
vessel; and that plaintiff's claim was highly this particular case.
speculative and grossly exaggerated and that the
(d) The cargo/shipment was
small stain marks or sweat marks on the edges of
(b) That for purposes of the securely stowed in three (3)
the tinplates were magnified and considered total
voyage covered by the hatches of the ship. The hatch
loss of the cargo. Finally, defendant claimed that it
Contract of Voyage Charter openings were covered by
had complied with all its duties and obligations
Hire (Exh. "1"), the MV hatchboards which were in
under the Voyage Charter Hire Contract and had
VLASONS I" was covered by turn covered by two or double
no responsibility whatsoever to plaintiff. In turn, it
the required seaworthiness tarpaulins. The hatch covers
alleged the following counterclaim:
certificates including the were water tight. Furthermore,
Certification of Classification under the hatchboards were
(a) That despite the full and issued by an international steel beams to give support.
proper performance by classification society, the
defendant of its obligations NIPPON KAIJI KYOKAI (Exh.
(e) The claim of the plaintiff
under the Voyage Charter "4"); Coastwise License from
that defendant violated the
Hire Contract, plaintiff failed the Board of Transportation
contract of carriage is not
and refused to pay the agreed (Exh. "5"); International
supported by evidence. The
charter hire of P75,000.00 Loadline Certificate from the
provisions of the Civil Code on
despite demands made by Philippine Coast Guard (Exh.
common carriers pursuant to
defendant; "6"); Cargo Ship Safety
which there exists a
Equipment Certificate also
presumption of negligence in
from the Philippine Coast
(b) That under their Voyage case of loss or damage to the
Guard (Exh. "7"); Ship Radio
Charter Hire Contract, plaintiff cargo are not applicable. As to
Station License (Exh. "8");
had agreed to pay defendant the damage to the tinplates
Certificate of Inspection by the
the sum of P8,000.00 per day which was allegedly due to the
Philippine Coast Guard (Exh.
for demurrage. The vessel wetting and rusting thereof,
"12"); and Certificate of
was on demurrage for eleven there is unrebutted testimony
Approval for Conversion
(11) days in Manila waiting for of witness Vicente Angliongto
issued by the Bureau of
plaintiff to discharge its cargo that tinplates "sweat" by
Customs (Exh. "9"). That
from the vessel. Thus, plaintiff themselves when packed
being a vessel engaged in
was liable to pay defendant even without being in contract
both overseas and coastwise
demurrage in the total amount (sic) with water from outside
trade, the MV "VLASONS I"
of P88,000.00. especially when the weather is
has a higher degree of
bad or raining. The trust
seaworthiness and safety.
caused by sweat or moisture
(c) For filing a clearly
on the tinplates may be
unfounded civil action against
(c) Before it proceeded to considered as a loss or
defendant, plaintiff should be
Iligan City to perform the damage but then, defendant
ordered to pay defendant
voyage called for by the cannot be held liable for it
attorney's fees and all
Contract of Voyage Charter pursuant to Article 1734 of the
expenses of litigation in the
Hire, the MV "VLASONS I" Civil Case which exempts the
amount of not less than
underwent drydocking in Cebu carrier from responsibility for
P100,000.00.
and was thoroughly inspected loss or damage arising from
by the Philippine Coast Guard. the "character of the goods . .
(8) From the evidence presented by both parties, In fact, subject voyage was ." All the 1,769 skids of the
the trial court came out with the following findings the vessel's first voyage after tinplates could not have been
which were set forth in its decision: the drydocking. The evidence damaged by water as claimed

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by plaintiff. It was shown as splash on the ship's deck on amounted to eleven (11) days
claimed by plaintiff that the account of which the master of thereby making plaintiff liable
tinplates themselves were the vessel (Mr. Antonio C. to pay defendant for
wrapped in kraft paper lining Dumlao) filed a "Marine demurrage in the amount of
and corrugated cardboards Protest" on August 13, 1974 P88,000.00.
could not be affected by water (Exh. "15"); which can be
from outside. invoked by defendant as
Appealing the RTC decision to the Court of Appeals, NSC
a force majeure that would
alleged six errors:
exempt the defendant from
(f) The stevedores hired by
liability.
the plaintiff to discharge the
I
cargo of tinplates were
negligent in not closing the (h) Plaintiff did not comply with
hatch openings of the MV the requirement prescribed in The trial court erred in finding that the MV
"VLASONS I" when rains paragraph 9 of the Voyage "VLASONS I" was seaworthy, properly manned,
occurred during the Charter Hire contract that it equipped and supplied, and that there is no proof
discharging of the cargo thus was to insure the cargo of willful negligence of the vessel's officers.
allowing rainwater to enter the because it did not. Had
hatches. It was proven that plaintiff complied with the
the stevedores merely set up requirement, then it could II
temporary tents to cover the have recovered its loss or
hatch openings in case of rain damage from the insurer. The trial court erred in finding that the rusting of
so that it would be easy for Plaintiff also violated the NSC's tinplates was due to the inherent nature or
them to resume work when charter party contract when it character of the goods and not due to contact with
the rains stopped by just loaded not only "steel seawater.
removing the tent or canvas. products", i.e. steel bars,
Because of this improper angular bars and the like but
covering of the hatches by the also tinplates and hot rolled III
stevedores during the sheets which are high grade
discharging and unloading cargo commanding a higher The trial court erred in finding that the stevedores
operations which were freight. Thus plaintiff was able hired by NSC were negligent in the unloading of
interrupted by rains, rainwater to ship grade cargo at a lower NSC's shipment.
drifted into the cargo through freight rate.
the hatch openings. Pursuant
to paragraph 5 of the IV
(i) As regards defendant's
NANYOSAI [sic] Charter Party
counterclaim, the contract of
which was expressly made The trial court erred in exempting VSI from liability
voyage charter hire under
part of the Contract of Voyage on the ground of force majeure.
Paragraph 4 thereof, fixed the
Charter Hire, the loading,
freight at P30.00 per metric
stowing and discharging of the
ton payable to defendant V
cargo is the sole responsibility
carrier upon presentation of
of the plaintiff charterer and
the bill of lading within fifteen
defendant carrier has no The trial court erred in finding that NSC violated
(15) days. Plaintiff has not
liability for whatever damage the contract of voyage charter hire.
paid the total freight due of
may occur or maybe [sic]
P75,000.00 despite demands.
caused to the cargo in the
The evidence also showed VI
process.
that the plaintiff was required
and bound under paragraph 7
(g) It was also established that of the same Voyage Charter The trial court erred in ordering NSC to pay freight,
the vessel encountered rough Hire contract to pay demurrage and attorney's fees, to VSI.4
seas and bad weather while demurrage of P8,000.00 per
en route from Iligan City to day of delay in the unloading As earlier stated, the Court of Appeals modified the decision
Manila causing sea water to of the cargoes. The delay of the trial court by reducing the demurrage from P88,000.00

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to P44,000.00 and deleting the award of attorneys fees and A. The respondent Court of Appeals committed an Article 1732 of the Civil Code defines a common carrier as
expenses of litigation. NSC and VSI filed separate motions error of law in reducing the award of demurrage "persons, corporations, firms or associations engaged in the
for reconsideration. In a Resolution5 dated October 20, 1993, from P88,000.00 to P44,000.00. business of carrying or transporting passengers or goods or
the appellate court denied both motions. Undaunted, NSC both, by land, water, or air, for compensation, offering their
and VSI filed their respective petitions for review before this services to the public." It has been held that the true test of a
B. The respondent Court of Appeals committed an
Court. On motion of VSI, the Court ordered on February 14, common carrier is the carriage of passengers or goods,
error of law in deleting the award of P100,000 for
1994 the consolidation of these petitions.6 provided it has space, for all who opt to avail themselves of
attorney's fees and expenses of litigation.
its transportation service for a fee.11 A carrier which does not
qualify under the above test is deemed a private carrier.
The Issues
Amplifying the foregoing, VSI raises the following issues in "Generally, private carriage is undertaken by special
its memorandum:10 agreement and the carrier does not hold himself out to carry
In its petition7 and memorandum,8 NSC raises the following goods for the general public. The most typical, although not
questions of law and fact: the only form of private carriage, is the charter party, a
I. Whether or not the provisions of the Civil Code maritime contract by which the charterer, a party other than
of the Philippines on common carriers pursuant to the shipowner, obtains the use and service of all or some
Questions of Law which there exist[s] a presumption of negligence part of a ship for a period of time or a voyage or voyages."12
against the common carrier in case of loss or
damage to the cargo are applicable to a private
1. Whether or not a charterer of a vessel is liable In the instant case, it is undisputed that VSI did not offer its
carrier.
for demurrage due to cargo unloading delays services to the general public. As found by the Regional Trial
caused by weather interruption;
Court, it carried passengers or goods only for those it chose
II. Whether or not the terms and conditions of the under a "special contract of charter party." 13 As correctly
Contract of Voyage Charter Hire, including the concluded by the Court of Appeals, the MV Vlasons I "was
2. Whether or not the alleged "seaworthiness
Nanyozai Charter, are valid and binding on both
certificates" (Exhibits "3", "4", "5", "6", "7", "8", "9", not a common but a private carrier."14Consequently, the
contracting parties. rights and obligations of VSI and NSC, including their
"11" and "12") were admissible in evidence and
constituted evidence of the vessel's seaworthiness respective liability for damage to the cargo, are determined
at the beginning of the voyages; and The foregoing issues raised by the parties will be discussed primarily by stipulations in their contract of private carriage or
under the following headings: charter party.15 Recently, in Valenzuela Hardwood and
Industrial Supply, Inc., vs. Court of Appeals and Seven
3. Whether or not a charterer's failure to insure its Brothers Shipping Corporation,16 the Court ruled:
cargo exempts the shipowner from liability for 1. Questions of Fact
cargo damage.
. . . in a contract of private carriage, the parties
2. Effect of NSC's Failure to Insure the Cargo may freely stipulate their duties and obligations
Questions of Fact which perforce would be binding on them. Unlike in
3. Admissibility of Certificates Proving Seaworthiness a contract involving a common carrier, private
1. Whether or not the vessel was seaworthy and carriage does not involve the general public.
cargo-worthy; Hence, the stringent provisions of the Civil Code
4. Demurrage and Attorney's Fees. on common carriers protecting the general public
cannot justifiably be applied to a ship transporting
2. Whether or not vessel's officers and crew were commercial goods as a private carrier.
The Court's Ruling
negligent in handling and caring for NSC's cargo; Consequently, the public policy embodied therein
is not contravened by stipulations in a charter party
The Court affirms the assailed Decision of the Court of that lessen or remove the protection given by law
3. Whether or not NSC's cargo of tinplates did
Appeals, except in respect of the demurrage. in contracts involving common carriers.17
sweat during the voyage and, hence, rusted on
their own; and
Preliminary Matter: Common Carrier or Private Carrier? Extent of VSI's Responsibility and
4. Whether or not NSC's stevedores were Liability Over NSC's Cargo
negligent and caused the wetting[/]rusting of At the outset, it is essential to establish whether VSI
NSC's tinplates. contracted with NSC as a common carrier or as a private It is clear from the parties' Contract of Voyage Charter Hire,
carrier. The resolution of this preliminary question dated July 17, 1974, that VSI "shall not be responsible for
determines the law, standard of diligence and burden of losses except on proven willful negligence of the officers of
In its separate petition,9 VSI submits for the consideration of
proof applicable to the present case. the vessel." The NANYOZAI Charter Party, which was
this Court the following alleged errors of the CA:

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incorporated in the parties' contract of transportation further Because the MV Vlasons I was a private carrier, the In the instant case, the Court of Appeals correctly found the
provided that the shipowner shall not be liable for loss of or a shipowner's obligations are governed by the foregoing NSC "has not taken the correct position in relation to the
damage to the cargo arising or resulting from provisions of the Code of Commerce and not by the Civil question of who has the burden of proof. Thus, in its brief
unseaworthiness, unless the same was caused by its lack of Code which, as a general rule, places the prima (pp. 10-11), after citing Clause 10 and Clause 12 of the
due diligence to make the vessel seaworthy or to ensure that faciepresumption of negligence on a common carrier. It is a NANYOZAI Charter Party (incidentally plaintiff-appellant's
the same was "properly manned, equipped and supplied," hornbook doctrine that: [NSC's] interpretation of Clause 12 is not even correct), it
and to "make the holds and all other parts of the vessel in argues that 'a careful examination of the evidence will show
which cargo [was] carried, fit and safe for its reception, that VSI miserably failed to comply with any of these
In an action against a private carrier for loss of, or
carriage and preservation."18 The NANYOZAI Charter Party obligation's as if defendant-appellee [VSI] had the burden of
injury to, cargo, the burden is on the plaintiff to
also provided that "[o]wners shall not be responsible for split, proof."21
prove that the carrier was negligent or
chafing and/or any damage unless caused by the negligence
unseaworthy, and the fact that the goods were lost
or default of the master or crew."19
or damaged while in the carrier's custody does not First Issue: Questions of Fact
put the burden of proof on the carrier.
Burden of Proof
Based on the foregoing, the determination of the following
Since . . . a private carrier is not an insurer but factual questions is manifestly relevant: (1) whether VSI
In view of the aforementioned contractual stipulations, NSC undertakes only to exercise due care in the exercised due diligence in making MV Vlasons I seaworthy
must prove that the damage to its shipment was caused by protection of the goods committed to its care, the for the intended purpose under the charter party; (2) whether
VSI's willful negligence or failure to exercise due diligence in burden of proving negligence or a breach of that the damage to the cargo should be attributed to the willful
making MV Vlasons I seaworthy and fit for holding, carrying duty rests on plaintiff and proof of loss of, or negligence of the officers and crew of the vessel or of the
and safekeeping the cargo. Ineluctably, the burden of proof damage to, cargo while in the carrier's possession stevedores hired by NSC; and (3) whether the rusting of the
was placed on NSC by the parties' agreement. does not cast on it the burden of proving proper tinplates was caused by its own "sweat" or by contact with
care and diligence on its part or that the loss seawater.
occurred from an excepted cause in the contract or
This view finds further support in the Code of Commerce
bill of lading. However, in discharging the burden
which pertinently provides: These questions of fact were threshed out and decided by
of proof, plaintiff is entitled to the benefit of the
the trial court, which had the firsthand opportunity to hear the
presumptions and inferences by which the law aids
parties' conflicting claims and to carefully weigh their
Art. 361. Merchandise shall be transported at the the bailor in an action against a bailee, and since
respective evidence. The findings of the trial court were
risk and venture of the shipper, if the contrary has the carrier is in a better position to know the cause
subsequently affirmed by the Court of Appeals. Where the
not been expressly stipulated. of the loss and that it was not one involving its
factual findings of both the trial court and the Court of
liability, the law requires that it come forward with
Appeals coincide, the same are binding on this Court. 22 We
the information available to it, and its failure to do
Therefore, the damage and impairment suffered by stress that, subject to some exceptional instances,23only
so warrants an inference or presumption of its
the goods during the transportation, due to questions of law — not questions of fact — may be raised
liability. However, such inferences and
fortuitous event, force majeure, or the nature and before this Court in a petition for review under Rule 45 of the
presumptions, while they may affect the burden of
inherent defect of the things, shall be for the Rules of Court. After a thorough review of the case at bar,
coming forward with evidence, do not alter the
account and risk of the shipper. we find no reason to disturb the lower court's factual findings,
burden of proof which remains on plaintiff, and,
as indeed NSC has not successfully proven the application
where the carrier comes forward with evidence
of any of the aforecited exceptions.
The burden of proof of these accidents is on the explaining the loss or damage, the burden of going
carrier. forward with the evidence is again on plaintiff.
Was MV Vlasons I Seaworthy?
Art. 362. The carrier, however, shall be liable for Where the action is based on the shipowner's
damages arising from the cause mentioned in the warranty of seaworthiness, the burden of proving a In any event, the records reveal that VSI exercised due
preceding article if proofs against him show that breach thereof and that such breach was the diligence to make the ship seaworthy and fit for the carriage
they occurred on account of his negligence or his proximate cause of the damage rests on plaintiff, of NSC's cargo of steel and tinplates. This is shown by the
omission to take the precautions usually adopted and proof that the goods were lost or damaged fact that it was drylocked and inspected by the Philippine
by careful persons, unless the shipper committed while in the carrier's possession does not cast on it Coast Guard before it proceeded to Iligan City for its voyage
fraud in the bill of lading, making him to believe the burden of proving seaworthiness. . . . Where to Manila under the contract of voyage charter hire. 24The
that the goods were of a class or quality different the contract of carriage exempts the carrier from vessel's voyage from Iligan to Manila was the vessel's first
from what they really were. liability for unseaworthiness not discoverable by voyage after drydocking. The Philippine Coast Guard Station
due diligence, the carrier has the preliminary in Cebu cleared it as seaworthy, fitted and equipped; it met
burden of proving the exercise of due diligence to all requirements for trading as cargo vessel.25 The Court of
make the vessel seaworthy.20

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Appeals itself sustained the conclusion of the trial court That the weather condition improved when we q What is the hatch board made of?
that MV Vlasons I was seaworthy. We find no reason to reached Dumali Point protected by Mindoro; that
modify or reverse this finding of both the trial and the we re-secured the canvass covering back to
a It is made of wood, with a handle.
appellate courts. position; that in the afternoon of August 10, 1974,
while entering Maricaban Passage, we were again
exposed to moderate seas and heavy rains; that q And aside from the hatch board, is there any other material
Who Were Negligent:
while approaching Fortune Island, we encountered there to cover the hatch?
Seamen or Stevedores?
again rough seas, strong winds and big waves
which caused the same canvass to give way and
leaving the new canvass holding on; a There is a beam supporting the hatch board.
As noted earlier, the NSC had the burden of proving that the
damage to the cargo was caused by the negligence of the
officers and the crew of MV Vlasons I in making their vessel q What is this beam made of?
xxx xxx xxx 28
seaworthy and fit for the carriage of tinplates. NSC failed to
discharge this burden.
And the relevant portions of Jose Pascua's deposition are as a It is made of steel, sir.
follows:
Before us, NSC relies heavily on its claim that MV Vlasons
I had used an old and torn tarpaulin or canvas to cover the q Is the beam that was placed in the hatch opening covering
hatches through which the cargo was loaded into the cargo q What is the purpose of the canvas cover? the whole hatch opening?
hold of the ship. It faults the Court of Appeals for failing to
consider such claim as an "uncontroverted fact"26 and denies a No, sir.
a So that the cargo would not be soaked with water.
that MV Vlasons I "was equipped with new canvas covers in
tandem with the old ones as indicated in the Marine Protest .
. ."27 We disagree. q And will you describe how the canvas cover was secured q How many hatch beams were there placed across the
on the hatch opening? opening?

The records sufficiently support VSI's contention that the

ship used the old tarpaulin, only in addition to the new one WITNESS a There are five beams in one hatch opening.
used primarily to make the ship's hatches watertight. The
foregoing are clear from the marine protest of the master of ATTY DEL ROSARIO
the MV Vlasons I, Antonio C. Dumlao, and the deposition of a It was placed flat on top of the hatch cover, with a little
canvas flowing over the sides and we place[d] a flat bar over
the ship's boatswain, Jose Pascua. The salient portions of
said marine protest read: the canvas on the side of the hatches and then we place[d] a q And on top of the beams you said there is a hatch board.
stopper so that the canvas could not be removed. How many pieces of wood are put on top?

. . . That the M/V "VLASONS I" departed Iligan City

or about 0730 hours of August 8, 1974, loaded ATTY DEL ROSARIO a Plenty, sir, because there are several pieces on top of the
with approximately 2,487.9 tons of steel plates and hatch beam.
tin plates consigned to National Steel Corporation; q And will you tell us the size of the hatch opening? The
that before departure, the vessel was rigged, fully length and the width of the hatch opening. q And is there a space between the hatch boards?
equipped and cleared by the authorities; that on or
about August 9, 1974, while in the vicinity of the
western part of Negros and Panay, we a Forty-five feet by thirty-five feet, sir. a There is none, sir.
encountered very rough seas and strong winds
and Manila office was advised by telegram of the xxx xxx xxx q They are tight together?
adverse weather conditions encountered; that in
the morning of August 10, 1974, the weather
condition changed to worse and strong winds and q How was the canvas supported in the middle of the hatch a Yes, sir.
big waves continued pounding the vessel at her opening?
port side causing sea water to overflow on deck q How tight?
andhatch (sic) covers and which caused the first a There is a hatch board.
layer of the canvass covering to give way while the
new canvass covering still holding on; a Very tight, sir.
ATTY DEL ROSARIO

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q Now, on top of the hatch boards, according to you, is the A Yes, sir, upon my arrival at Q You also stated that the
canvass cover. How many canvas covers? the vessel, I saw some of the hatches were already opened
tinplates already discharged and that there were tents
on the pier but majority of the constructed at the opening of
a Two, sir.29
tinplates were inside the hall, the hatches to protect the
all the hatches were opened. cargo from the rain. Now, will
That due diligence was exercised by the officers and the you describe [to] the Court the
crew of the MV Vlasons I was further demonstrated by the tents constructed.
Q In connection with these
fact that, despite encountering rough weather twice, the new
cargoes which were unloaded,
tarpaulin did not give way and the ship's hatches and cargo
where is the place. A The tents are just a base of
holds remained waterproof. As aptly stated by the Court of
canvas which look like a tent
Appeals, ". . . we find no reason not to sustain the conclusion
of an Indian camp raise[d]
of the lower court based on overwhelming evidence, that A At the Pier.
high at the middle with the
the MV 'VLASONS I' was seaworthy when it undertook the
whole side separated down to
voyage on August 8, 1974 carrying on board thereof plaintiff-
Q What was used to protect the hatch, the size of the
appellant's shipment of 1,677 skids of tinplates and 92
the same from weather? hatch and it is soaks [sic] at
packages of hot rolled sheets or a total of 1,769 packages
the middle because of those
from NSC's pier in Iligan City arriving safely at North Harbor,
weather and this can be used
Port Area, Manila, on August 12, 1974; . . .30 ATTY LOPEZ: only to temporarily protect the
cargo from getting wet by
Indeed, NSC failed to discharge its burden to show We object, your Honor, this rains.
negligence on the part of the officers and the crew of MV question was already asked.
Vlasons I. On the contrary, the records reveal that it was the This particular matter . . . the
Q Now, is this procedure
stevedores of NSC who were negligent in unloading the transcript of stenographic adopted by the stevedores of
cargo from the ship. notes shows the same was covering tents proper?
covered in the direct
examination.
The stevedores employed only a tent-like material to cover
A No, sir, at the time they
the hatches when strong rains occasioned by a passing
were discharging the cargo,
typhoon disrupted the unloading of the cargo. This tent-like ATTY ZAMORA:
there was a typhoon passing
covering, however, was clearly inadequate for keeping rain
by and the hatch tent was not
and seawater away from the hatches of the ship. Vicente
Precisely, your Honor, we good enough to hold all of it to
Angliongto, an officer of VSI, testified thus:
would like to go on detail, this prevent the water soaking
is the serious part of the through the canvass and enter
ATTY ZAMORA: testimony. the cargo.

Q Now, during your testimony COURT: Q In the course of your

on November 5, 1979, you inspection, Mr. Anglingto [sic],
stated on August 14 you went did you see in fact the water
All right, witness may answer. enter and soak into the
on board the vessel upon
notice from the National Steel canvass and tinplates.
Corporation in order to ATTY LOPEZ:
conduct the inspection of the
A Yes, sir, the second time I
cargo. During the course of
Q What was used in order to went there, I saw it.
the investigation, did you
chance to see the discharging protect the cargo from the
operation? weather? Q As owner of the vessel, did
you not advise the National
A A base of canvas was used Steel Corporation [of] the
WITNESS:
as cover on top of the tin procedure adopted by its
plates, and tents were built at stevedores in discharging the
the opening of the hatches.

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cargo particularly in this tent stopped by just removing said tents or canvass. It The obligation of NSC to insure the cargo stipulated in the
covering of the hatches? has also been shown that on August 20, 1974, VSI Contract of Voyage Charter Hire is totally separate and
President Vicente Angliongto wrote [NSC] calling distinct from the contractual or statutory responsibility that
attention to the manner the stevedores hired by may be incurred by VSI for damage to the cargo caused by
A Yes, sir, I did the first time I
[NSC] were discharging the cargo on rainy days the willful negligence of the officers and the crew of MV
saw it, I called the attention of
and the improper closing of the hatches which Vlasons I. Clearly, therefore, NSC's failure to insure the
the stevedores but the
allowed continuous heavy rain water to leak cargo will not affect its right, as owner and real party in
stevedores did not mind at all,
through and drip to the tinplates' covers and interest, to file an action against VSI for damages caused by
so, called the attention of the
[Vicente Angliongto] also suggesting that due to the latter's willful negligence. We do not find anything in the
representative of the National
four (4) days continuos rains with strong winds that charter party that would make the liability of VSI for damage
Steel but nothing was done,
the hatches be totally closed down and covered to the cargo contingent on or affected in any manner by
just the same. Finally, I wrote
with canvas and the hatch tents lowered. (Exh. NSC's obtaining an insurance over the cargo.
a letter to them.31
"13"). This letter was received by [NSC] on 22
August 1974 while discharging operations were
Third Issue: Admissibility of Certificates
NSC attempts to discredit the testimony of Angliongto by still going on (Exhibit "13-A").33
Proving Seaworthiness
questioning his failure to complain immediately about the
stevedores' negligence on the first day of unloading, pointing
The fact that NSC actually accepted and proceeded to
out that he wrote his letter to petitioner only seven days NSC's contention that MV Vlasons I was not seaworthy is
remove the cargo from the ship during unfavorable weather
later.32 The Court is not persuaded. Angliongto's candid anchored on the alleged inadmissibility of the certificates of
will not make VSI liable for any damage caused thereby. In
answer in his aforequoted testimony satisfactorily explained seaworthiness offered in evidence by VSI. The said
passing, it may be noted that the NSC may seek
the delay. Seven days lapsed because he first called the certificates include the following:
indemnification, subject to the laws on prescription, from the
attention of the stevedores, then the NSC's representative,
stevedoring company at fault in the discharge operations. "A
about the negligent and defective procedure adopted in
stevedore company engaged in discharging cargo . . . has 1. Certificate of Inspection of the Philippines Coast Guard at
unloading the cargo. This series of actions constitutes a
the duty to load the cargo . . . in a prudent manner, and it is Cebu
reasonable response in accord with common sense and
liable for injury to, or loss of, cargo caused by its negligence .
ordinary human experience. Vicente Angliongto could not be
. . and where the officers and members and crew of the
blamed for calling the stevedores' attention first and then the 2. Certificate of Inspection from the Philippine Coast Guard
vessel do nothing and have no responsibility in the discharge
NSC's representative on location before formally informing
of cargo by stevedores . . . the vessel is not liable for loss of,
NSC of the negligence he had observed, because he was
or damage to, the cargo caused by the negligence of the 3. International Load Line Certificate from the Philippine
not responsible for the stevedores or the unloading
stevedores . . ."34 as in the instant case. Coast Guard
operations. In fact, he was merely expressing concern for
NSC which was ultimately responsible for the stevedores it
had hired and the performance of their task to unload the Do Tinplates "Sweat"? 4. Coastwise License from the Board of Transportation
cargo.
The trial court relied on the testimony of Vicente Angliongto 5. Certificate of Approval for Conversion issued by the
We see no reason to reverse the trial and the appellate in finding that ". . . tinplates 'sweat' by themselves when Bureau of Customs36
courts' findings and conclusions on this point, viz: packed even without being in contact with water from outside
especially when the weather is bad or
raining . . ."35 The Court of Appeals affirmed the trial court's NSC argues that the certificates are hearsay for not having
In the THIRD assigned error, [NSC] claims that the been presented in accordance with the Rules of Court. It
finding.
trial court erred in finding that the stevedores hired points out that Exhibits 3, 4 and 11 allegedly are "not written
by NSC were negligent in the unloading of NSC's records or acts of public officers"; while Exhibits 5, 6, 7, 8, 9,
shipment. We do not think so. Such negligence A discussion of this issue appears inconsequential and 11 and 12 are not "evidenced by official publications or
according to the trial court is evident in the unnecessary. As previously discussed, the damage to the certified true copies" as required by Sections 25 and 26, Rule
stevedores hired by [NSC], not closing the hatch tinplates was occasioned not by airborne moisture but by 132, of the Rules of Court.37
of MV 'VLASONS I' when rains occurred during the contact with rain and seawater which the stevedores
discharging of the cargo thus allowing rain water negligently allowed to seep in during the unloading.
and seawater spray to enter the hatches and to After a careful examination of these exhibits, the Court rules
drift to and fall on the cargo. It was proven that the that Exhibits 3, 4, 5, 6, 7, 8, 9 and 12 are inadmissible, for
Second Issue: Effect of NSC's Failure to they have not been properly offered as evidence. Exhibits 3
stevedores merely set up temporary tents or
Insure the Cargo and 4 are certificates issued by private parties, but they have
canvas to cover the hatch openings when it rained
during the unloading operations so that it would be not been proven by one who saw the writing executed, or by
easier for them to resume work after the rains evidence of the genuineness of the handwriting of the maker,

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or by a subscribing witness. Exhibits, 5, 6, 7, 8, 9, and 12 are 7. Demurrage/Dispatch: P8,000.00/P4,000.00 per to a party for the reason alone that the judgment rendered
photocopies, but their admission under the best evidence day.39 was favorable to the latter, as this is tantamount to imposing
rule have not been demonstrated. a premium on one's right to litigate or seek judicial redress of
legitimate grievances.45
The Court defined demurrage in its strict sense as the
We find, however, that Exhibit 11 is admissible under a well- compensation provided for in the contract of affreightment for
settled exception to the hearsay rule per Section 44 of Rule the detention of the vessel beyond the laytime or that period Epilogue
130 of the Rules of Court, which provides that "(e)ntries in of time agreed on for loading and unloading of cargo.40It is
official records made in the performance of a duty by a public given to compensate the shipowner for the nonuse of the
At bottom, this appeal really hinges on a factual issue: when,
officer of the Philippines, or by a person in the performance vessel. On the other hand, the following is well-settled:
how and who caused the damage to the cargo? Ranged
of a duty specially enjoined by law, are prima facie evidence
against NSC are two formidable truths. First, both lower
of the facts therein stated."38 Exhibit 11 is an original
Laytime runs according to the particular clause of courts found that such damage was brought about during the
certificate of the Philippine Coast Guard in Cebu issued by
the charter party. . . . If laytime is expressed in unloading process when rain and seawater seeped through
Lieutenant Junior Grade Noli C. Flores to the effect that "the
"running days," this means days when the ship the cargo due to the fault or negligence of the stevedores
vessel 'VLASONS I' was drydocked . . . and PCG Inspectors
would be run continuously, and holidays are not employed by it. Basic is the rule that factual findings of the
were sent on board for inspection . . . After completion of
excepted. A qualification of "weather permitting" trial court, when affirmed by the Court of Appeals, are
drydocking and duly inspected by PCG Inspectors, the
excepts only those days when bad weather binding on the Supreme Court. Although there are settled
vessel 'VLASONS I', a cargo vessel, is in seaworthy
reasonably prevents the work contemplated.41 exceptions, NSC has not satisfactorily shown that this case
condition, meets all requirements, fitted and equipped for
is one of them. Second, the agreement between the parties
trading as a cargo vessel was cleared by the Philippine
— the Contract of Voyage Charter Hire — placed the burden
Coast Guard and sailed for Cebu Port on July 10, 1974." In this case, the contract of voyage charter hire provided for
of proof for such loss or damage upon the shipper, not upon
(sic) NSC's claim, therefore, is obviously misleading and a four-day laytime; it also qualified laytime as WWDSHINC or
the shipowner. Such stipulation, while disadvantageous to
erroneous. weather working days Sundays and holidays included.42 The
NSC, is valid because the parties entered into a contract of
running of laytime was thus made subject to the weather,
private charter, not one of common carriage. Basic too is the
and would cease to run in the event unfavorable weather
At any rate, it should be stressed that NSC has the burden of doctrine that courts cannot relieve a parry from the effects of
interfered with the unloading of cargo.43 Consequently, NSC
proving that MV Vlasons I was not seaworthy. As observed a private contract freely entered into, on the ground that it is
may not be held liable for demurrage as the four-day laytime
earlier, the vessel was a private carrier and, as such, it did allegedly one-sided or unfair to the plaintiff. The charter party
allowed it did not lapse, having been tolled by unfavorable
not have the obligation of a common carrier to show that it is a normal commercial contract and its stipulations are
weather condition in view of the WWDSHINC qualification
was seaworthy. Indeed, NSC glaringly failed to discharge its agreed upon in consideration of many factors, not the least
agreed upon by the parties. Clearly, it was error for the trial
duty of proving the willful negligence of VSI in making the of which is the transport price which is determined not only
court and the Court of Appeals to have found and affirmed
ship seaworthy resulting in damage to its cargo. Assailing the by the actual costs but also by the risks and burdens
respectively that NSC incurred eleven days of delay in
genuineness of the certificate of seaworthiness is not assumed by the shipper in regard to possible loss or damage
unloading the cargo. The trial court arrived at this erroneous
sufficient proof that the vessel was not seaworthy. to the cargo. In recognition of such factors, the parties even
finding by subtracting from the twelve days, specifically
stipulated that the shipper should insure the cargo to protect
August 13, 1974 to August 24, 1974, the only day of
itself from the risks it undertook under the charter party. That
Fourth Issue: Demurrage and Attorney's Fees unloading unhampered by unfavorable weather or rain,
NSC failed or neglected to protect itself with such insurance
which was August 22, 1974. Based on our previous
should not adversely affect VSI, which had nothing to do with
discussion, such finding is a reversible error. As mentioned,
The contract of voyage charter hire provides inter alia: such failure or neglect.
the respondent appellate court also erred in ruling that NSC
was liable to VSI for demurrage, even if it reduced the
xxx xxx xxx amount by half. WHEREFORE, premises considered, the instant
consolidated petitions are hereby DENIED. The questioned
Decision of the Court of Appeals is AFFIRMED with the
2. Cargo: Full cargo of steel products of not less Attorney's Fees
MODIFICATION that the demurrage awarded to VSI is
than 2,500 MT, 10% more or less at Master's deleted. No pronouncement as to costs.
option.
VSI assigns as error of law the Court of Appeals' deletion of
the award of attorney's fees. We disagree. While VSI was
SO ORDERED.
xxx xxx xxx compelled to litigate to protect its rights, such fact by itself
will not justify an award of attorney's fees under Article 2208
of the Civil Code when ". . . no sufficient showing of bad faith G.R. No. 125948 December 29, 1998
6. Loading/Discharging Rate: 750 tons per would be reflected in a party's persistence in a case other
WWDSHINC. than an erroneous conviction of the righteousness of his
FIRST PHILIPPINE INDUSTRIAL CORPORATION,
cause . . ."44 Moreover, attorney's fees may not be awarded
petitioner,

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vs. receipts under Section 133 of the gross receipts of "contractors and independent
COURT OF APPEALS, HONORABLE PATERNO V. TAC- Local Government Code of 1991 . . . . contractors" under Sec. 141 (e) and 151 does not include
AN, BATANGAS CITY and ADORACION C. ARELLANO, the authority to collect such taxes on transportation
in her official capacity as City Treasurer of Batangas, contractors for, as defined under Sec. 131 (h), the term
Moreover, Transportation contractors
respondents. "contractors" excludes transportation contractors; and,
are not included in the enumeration
(3) the City Treasurer illegally and erroneously imposed
of contractors under Section 131,
and collected the said tax, thus meriting the immediate
MARTINEZ, J.: Paragraph (h) of the Local
refund of the tax paid.7
Government Code. Therefore, the
authority to impose tax "on
This petition for review on certiorari assails the Decision
contractors and other independent Traversing the complaint, the respondents argued that
of the Court of Appeals dated November 29, 1995, in CA-
contractors" under Section 143, petitioner cannot be exempt from taxes under Section
G.R. SP No. 36801, affirming the decision of the Regional
Paragraph (e) of the Local 133 (j) of the Local Government Code as said exemption
Trial Court of Batangas City, Branch 84, in Civil Case No.
Government Code does not include applies only to "transportation contractors and persons
4293, which dismissed petitioners' complaint for a
the power to levy on transportation engaged in the transportation by hire and common
business tax refund imposed by the City of Batangas.
contractors. carriers by air, land and water." Respondents assert that
pipelines are not included in the term "common carrier"
Petitioner is a grantee of a pipeline concession under which refers solely to ordinary carriers such as trucks,
The imposition and assessment
Republic Act No. 387, as amended, to contract, install trains, ships and the like. Respondents further posit that
cannot be categorized as a mere fee
and operate oil pipelines. The original pipeline the term "common carrier" under the said code pertains
authorized under Section 147 of the
concession was granted in 19671 and renewed by the to the mode or manner by which a product is delivered
Local Government Code. The said
Energy Regulatory Board in 1992. 2 to its destination.8
section limits the imposition of fees
and charges on business to such
Sometime in January 1995, petitioner applied for a amounts as may be commensurate to On October 3, 1994, the trial court rendered a decision
mayor's permit with the Office of the Mayor of Batangas the cost of regulation, inspection, and dismissing the complaint, ruling in this wise:
City. However, before the mayor's permit could be licensing. Hence, assuming arguendo
issued, the respondent City Treasurer required that FPIC is liable for the license fee,
. . . Plaintiff is either a contractor or
petitioner to pay a local tax based on its gross receipts the imposition thereof based on
other independent contractor.
for the fiscal year 1993 pursuant to the Local gross receipts is violative of the
Government Code3. The respondent City Treasurer aforecited provision. The amount of
assessed a business tax on the petitioner amounting to P956,076.04 (P239,019.01 per quarter) . . . the exemption to tax claimed by
P956,076.04 payable in four installments based on the is not commensurate to the cost of the plaintiff has become unclear. It is
gross receipts for products pumped at GPS-1 for the regulation, inspection and licensing. a rule that tax exemptions are to be
fiscal year 1993 which amounted to P181,681,151.00. In The fee is already a revenue raising strictly construed against the
order not to hamper its operations, petitioner paid the measure, and not a mere regulatory taxpayer, taxes being the lifeblood of
tax under protest in the amount of P239,019.01 for the imposition.4 the government. Exemption may
first quarter of 1993. therefore be granted only by clear
and unequivocal provisions of law.
On March 8, 1994, the respondent City Treasurer denied
On January 20, 1994, petitioner filed a letter-protest the protest contending that petitioner cannot be
addressed to the respondent City Treasurer, the considered engaged in transportation business, thus it Plaintiff claims that it is a grantee of a
pertinent portion of which reads: cannot claim exemption under Section 133 (j) of the pipeline concession under Republic
Local Government Code.5 Act 387. (Exhibit A) whose
concession was lately renewed by the
Please note that our Company (FPIC)
Energy Regulatory Board (Exhibit B).
is a pipeline operator with a On June 15, 1994, petitioner filed with the Regional Trial
Yet neither said law nor the deed of
government concession granted Court of Batangas City a complaint6 for tax refund with
concession grant any tax exemption
under the Petroleum Act. It is prayer for writ of preliminary injunction against
upon the plaintiff.
engaged in the business of respondents City of Batangas and Adoracion Arellano in
transporting petroleum products from her capacity as City Treasurer. In its complaint,
the Batangas refineries, via pipeline, petitioner alleged, inter alia, that: (1) the imposition and Even the Local Government Code
to Sucat and JTF Pandacan collection of the business tax on its gross receipts imposes a tax on franchise holders
Terminals. As such, our Company is violates Section 133 of the Local Government Code; (2) under Sec. 137 of the Local Tax Code.
exempt from paying tax on gross the authority of cities to impose and collect a tax on the Such being the situation obtained in

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this case (exemption being unclear to place, for compensation, offering his services to the unscheduled basis. Neither does Article 1732
and equivocal) resort to distinctions public generally. distinguish between a carrier offering its
or other considerations may be of services to the "general public," i.e., the
help: general community or population, and one who
Art. 1732 of the Civil Code defines a "common carrier"
offers services or solicits business only from a
as "any person, corporation, firm or association
narrow segment of the general population. We
1. That the exemption granted under Sec. 133 (j) engaged in the business of carrying or transporting
think that Article 1877 deliberately refrained
encompasses only common carriers so as not to passengers or goods or both, by land, water, or air, for
from making such distinctions.
overburden the riding public or commuters with compensation, offering their services to the public."
taxes. Plaintiff is not a common carrier, but a special
carrier extending its services and facilities to a single So understood, the concept of "common
The test for determining whether a party is a common
specific or "special customer" under a "special carrier" under Article 1732 may be seen to
carrier of goods is:
contract." coincide neatly with the notion of "public
service," under the Public Service Act
1. He must be engaged in the business of carrying (Commonwealth Act No. 1416, as amended)
2. The Local Tax Code of 1992 was basically enacted to
goods for others as a public employment, and must hold which at least partially supplements the law on
give more and effective local autonomy to local
himself out as ready to engage in the transportation of common carriers set forth in the Civil Code.
governments than the previous enactments, to mae
goods for person generally as a business and not as a Under Section 13, paragraph (b) of the Public
them economically and financially viable to serve the
casual occupation; Service Act, "public service" includes:
people and discharge their functions with a concomitant
obligation to accept certain devolution of powers, . . .
So, consistent with this policy even franchise grantees 2. He must undertake to carry goods of the kind to which every person that now or hereafter may own,
are taxed (Sec. 137) and contractors are also taxed his business is confined; operate. manage, or control in the Philippines,
under Sec. 143 (e) and 151 of the Code.9 for hire or compensation, with general or
limited clientele, whether permanent,
3. He must undertake to carry by the method by which occasional or accidental, and done for general
Petitioner assailed the aforesaid decision before this his business is conducted and over his established business purposes, any common carrier,
Court via a petition for review. On February 27, 1995, we roads; and
railroad, street railway, traction railway,
referred the case to the respondent Court of Appeals for
subway motor vehicle, either for freight or
consideration and adjudication. 10 On November 29,
1995, the respondent court rendered a 4. The transportation must be for hire. 15 passenger, or both, with or without fixed route
and whatever may be its classification, freight
decision 11 affirming the trial court's dismissal of
or carrier service of any class, express service,
petitioner's complaint. Petitioner's motion for Based on the above definitions and requirements, there steamboat, or steamship line, pontines, ferries
reconsideration was denied on July 18, 1996. 12 is no doubt that petitioner is a common carrier. It is and water craft, engaged in the transportation
engaged in the business of transporting or carrying of passengers or freight or both, shipyard,
Hence, this petition. At first, the petition was denied due goods, i.e. petroleum products, for hire as a public marine repair shop, wharf or dock, ice plant,
course in a Resolution dated November 11, employment. It undertakes to carry for all persons ice-refrigeration plant, canal, irrigation system
indifferently, that is, to all persons who choose to
1996. 13Petitioner moved for a reconsideration which was gas, electric light heat and power, water supply
granted by this Court in a Resolution 14 of January 22, employ its services, and transports the goods by land andpower petroleum, sewerage system, wire or
1997. Thus, the petition was reinstated. and for compensation. The fact that petitioner has a wireless communications systems, wire or
limited clientele does not exclude it from the definition wireless broadcasting stations and other
of a common carrier. In De Guzman vs. Court of similar public services. (Emphasis Supplied)
Petitioner claims that the respondent Court of Appeals Appeals 16we ruled that:
erred in holding that (1) the petitioner is not a common
carrier or a transportation contractor, and (2) the Also, respondent's argument that the term "common
exemption sought for by petitioner is not clear under the The above article (Art. 1732, Civil Code) makes carrier" as used in Section 133 (j) of the Local
law. no distinction between one whose principal Government Code refers only to common carriers
business activity is the carrying of persons or transporting goods and passengers through moving
goods or both, and one who does such vehicles or vessels either by land, sea or water, is
There is merit in the petition. carrying only as an ancillary activity (in local erroneous.
idiom, as a "sideline"). Article 1732 . . . avoids
making any distinction between a person or
A "common carrier" may be defined, broadly, as one As correctly pointed out by petitioner, the definition of
enterprise offering transportation service on
who holds himself out to the public as engaged in the
a regular or scheduled basis and one offering "common carriers" in the Civil Code makes no
business of transporting persons or property from place distinction as to the means of transporting, as long as it
such service on an occasional, episodic or

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is by land, water or air. It does not provide that the herein, the exercise of the taxing powers of provinces, What we want to guard against here, Mr. Speaker, is the
transportation of the passengers or goods should be by cities, municipalities, and barangays shall not extend to imposition of taxes by local government units on the
motor vehicle. In fact, in the United States, oil pipe line the levy of the following: carrier business. Local government units may impose
operators are considered common carriers. 17 taxes on top of what is already being imposed by the
National Internal Revenue Code which is the so-called
xxx xxx xxx
"common carriers tax." We do not want a duplication of
Under the Petroleum Act of the Philippines (Republic Act
this tax, so we just provided for an exception under
387), petitioner is considered a "common carrier." Thus,
(j) Taxes on the gross receipts of Section 125 [now Sec. 137] that a province may impose
Article 86 thereof provides that:
transportation contractors and persons this tax at a specific rate.
engaged in the transportation of passengers or
Art. 86. Pipe line concessionaire as common carrier. — freight by hire and common carriers by air,
MR. AQUINO (A.). Thank you for that clarification, Mr.
A pipe line shall have the preferential right to utilize land or water, except as provided in this Code.
Speaker. . . . 18
installations for the transportation of petroleum owned
by him, but is obligated to utilize the remaining
The deliberations conducted in the House of
transportation capacity pro rata for the transportation of It is clear that the legislative intent in excluding from the
Representatives on the Local Government Code of 1991
such other petroleum as may be offered by others for taxing power of the local government unit the imposition
are illuminating:
transport, and to charge without discrimination such of business tax against common carriers is to prevent a
rates as may have been approved by the Secretary of duplication of the so-called "common carrier's tax."
Agriculture and Natural Resources. MR. AQUINO (A). Thank you, Mr. Speaker.
Petitioner is already paying three (3%) percent common
Republic Act 387 also regards petroleum operation as a Mr. Speaker, we would like to proceed to page 95, line carrier's tax on its gross sales/earnings under the
public utility. Pertinent portion of Article 7 thereof National Internal Revenue Code. 19 To tax petitioner
provides: again on its gross receipts in its transportation of
1. It states: "SEC. 121 [now Sec. 131]. Common
petroleum business would defeat the purpose of the
Limitations on the Taxing Powers of Local Government Local Government Code.
that everything relating to the exploration for Units." . . .
and exploitation of petroleum . . . and
everything relating to the manufacture, WHEREFORE, the petition is hereby GRANTED. The
refining, storage, or transportation by special MR. AQUINO (A.). Thank you Mr. Speaker. decision of the respondent Court of Appeals dated
methods of petroleum, is hereby declared to be November 29, 1995 in CA-G.R. SP No. 36801 is
a public utility. (Emphasis Supplied) Still on page 95, subparagraph 5, on taxes on the REVERSED and SET ASIDE.
business of transportation. This appears to be one of
The Bureau of Internal Revenue likewise considers the those being deemed to be exempted from the taxing SO ORDERED.
powers of the local government units. May we know the
petitioner a "common carrier." In BIR Ruling No. 069-83,
it declared: reason why the transportation business is being
excluded from the taxing powers of the local G.R. No. 148496 March 19, 2002
government units?
. . . since [petitioner] is a pipeline
VIRGINES CALVO doing business under the name and
concessionaire that is engaged only in
MR. JAVIER (E.). Mr. Speaker, there is an exception style TRANSORIENT CONTAINER TERMINAL SERVICES,
transporting petroleum products, it is
contained in Section 121 (now Sec. 131), line 16, INC., petitioner,
considered a common carrier under Republic
paragraph 5. It states that local government units may vs.
Act No. 387 . . . . Such being the case, it is not
not impose taxes on the business of transportation, UCPB GENERAL INSURANCE CO., INC. (formerly Allied
subject to withholding tax prescribed by
except as otherwise provided in this code. Guarantee Ins. Co., Inc.) respondent.
Revenue Regulations No. 13-78, as amended.

Now, Mr. Speaker, if the Gentleman would care to go to MENDOZA, J.:

From the foregoing disquisition, there is no doubt that
page 98 of Book II, one can see there that provinces
petitioner is a "common carrier" and, therefore, exempt
have the power to impose a tax on business enjoying a
from the business tax as provided for in Section 133 (j), This is a petition for review of the decision,1 dated May 31,
franchise at the rate of not more than one-half of 1
of the Local Government Code, to wit: 2001, of the Court of Appeals, affirming the decision2 of the
percent of the gross annual receipts. So, transportation
Regional Trial Court, Makati City, Branch 148, which ordered
contractors who are enjoying a franchise would be
petitioner to pay respondent, as subrogee, the amount
Sec. 133. Common Limitations on the Taxing Powers of subject to tax by the province. That is the exception, Mr.
of P93,112.00 with legal interest, representing the value of
Local Government Units. — Unless otherwise provided Speaker.

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damaged cargo handled by petitioner, 25% thereof as subject cargoes. The surveyor[s'] report (Exh. "H- Defendant, being a customs brother,
attorney's fees, and the cost of the suit.1âwphi1.nêt 4-A") in particular, which provides among others warehouseman and at the same time a common
that: carrier is supposed [to] exercise [the] extraordinary
diligence required by law, hence the extraordinary
The facts are as follows:
responsibility lasts from the time the goods are
" . . . we opine that damages sustained
unconditionally placed in the possession of and
by shipment is attributable to improper
Petitioner Virgines Calvo is the owner of Transorient received by the carrier for transportation until the
handling in transit presumably whilst in
Container Terminal Services, Inc. (TCTSI), a sole same are delivered actually or constructively by
the custody of the broker . . . ."
proprietorship customs broker. At the time material to this the carrier to the consignee or to the person who
case, petitioner entered into a contract with San Miguel has the right to receive the same.3
Corporation (SMC) for the transfer of 114 reels of semi- is a finding which cannot be traversed and
chemical fluting paper and 124 reels of kraft liner board from overturned.
Accordingly, the trial court ordered petitioner to pay the
the Port Area in Manila to SMC's warehouse at the
following amounts --
Tabacalera Compound, Romualdez St., Ermita, Manila. The
The evidence adduced by the defendants is not
cargo was insured by respondent UCPB General Insurance
enough to sustain [her] defense that [she is] are
Co., Inc. 1. The sum of P93,112.00 plus interest;
not liable. Defendant by reason of the nature of
[her] business should have devised ways and
On July 14, 1990, the shipment in question, contained in 30 means in order to prevent the damage to the 2. 25% thereof as lawyer's fee;
metal vans, arrived in Manila on board "M/V Hayakawa cargoes which it is under obligation to take custody
Maru" and, after 24 hours, were unloaded from the vessel to of and to forthwith deliver to the consignee.
3. Costs of suit.4
the custody of the arrastre operator, Manila Port Services, Defendant did not present any evidence on what
Inc. From July 23 to July 25, 1990, petitioner, pursuant to her precaution [she] performed to prevent [the] said
contract with SMC, withdrew the cargo from the arrastre incident, hence the presumption is that the The decision was affirmed by the Court of Appeals on
operator and delivered it to SMC's warehouse in Ermita, moment the defendant accepts the cargo [she] appeal. Hence this petition for review on certiorari.
Manila. On July 25, 1990, the goods were inspected by shall perform such extraordinary diligence because
Marine Cargo Surveyors, who found that 15 reels of the of the nature of the cargo.
Petitioner contends that:
semi-chemical fluting paper were "wet/stained/torn" and 3
reels of kraft liner board were likewise torn. The damage was
....
placed at P93,112.00. I. THE COURT OF APPEALS COMMITTED
SERIOUS AND REVERSIBLE ERROR [IN]
Generally speaking under Article 1735 of the Civil DECIDING THE CASE NOT ON THE EVIDENCE
SMC collected payment from respondent UCPB under its
Code, if the goods are proved to have been lost, PRESENTED BUT ON PURE SURMISES,
insurance contract for the aforementioned amount. In turn,
destroyed or deteriorated, common carriers are SPECULATIONS AND MANIFESTLY MISTAKEN
respondent, as subrogee of SMC, brought suit against
presumed to have been at fault or to have acted INFERENCE.
petitioner in the Regional Trial Court, Branch 148, Makati
negligently, unless they prove that they have
City, which, on December 20, 1995, rendered judgment
observed the extraordinary diligence required by
finding petitioner liable to respondent for the damage to the II. THE COURT OF APPEALS COMMITTED
law. The burden of the plaintiff, therefore, is to
shipment. SERIOUS AND REVERSIBLE ERROR IN
prove merely that the goods he transported have
been lost, destroyed or deteriorated. Thereafter, CLASSIFYING THE PETITIONER AS A
COMMON CARRIER AND NOT AS PRIVATE OR
The trial court held: the burden is shifted to the carrier to prove that he
has exercised the extraordinary diligence required SPECIAL CARRIER WHO DID NOT HOLD ITS
by law. Thus, it has been held that the mere proof SERVICES TO THE PUBLIC.5
It cannot be denied . . . that the subject cargoes
of delivery of goods in good order to a carrier, and
sustained damage while in the custody of
of their arrival at the place of destination in bad It will be convenient to deal with these contentions in the
defendants. Evidence such as the Warehouse
order, makes out a prima facie case against the inverse order, for if petitioner is not a common carrier,
Entry Slip (Exh. "E"); the Damage Report (Exh.
carrier, so that if no explanation is given as to how although both the trial court and the Court of Appeals held
"F") with entries appearing therein, classified as
the injury occurred, the carrier must be held otherwise, then she is indeed not liable beyond what ordinary
"TED" and "TSN", which the claims processor, Ms.
responsible. It is incumbent upon the carrier to diligence in the vigilance over the goods transported by her,
Agrifina De Luna, claimed to be tearrage at the
prove that the loss was due to accident or some would require.6 Consequently, any damage to the cargo she
end and tearrage at the middle of the subject
other circumstances inconsistent with its liability." agrees to transport cannot be presumed to have been due to
damaged cargoes respectively, coupled with the
(cited in Commercial Laws of the Philippines by her fault or negligence.
Marine Cargo Survey Report (Exh. "H" - "H-4-A")
Agbayani, p. 31, Vol. IV, 1989 Ed.)
confirms the fact of the damaged condition of the

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Petitioner contends that contrary to the findings of the trial control in the Philippines, for hire or precaution for avoiding damage to, or destruction
court and the Court of Appeals, she is not a common carrier compensation, with general or limited of the goods entrusted to it for sale, carriage and
but a private carrier because, as a customs broker and clientele, whether permanent, delivery. It requires common carriers to render
warehouseman, she does not indiscriminately hold her occasional or accidental, and done for service with the greatest skill and foresight and "to
services out to the public but only offers the same to select general business purposes, any use all reasonable means to ascertain the nature
parties with whom she may contract in the conduct of her common carrier, railroad, street railway, and characteristic of goods tendered for shipment,
business. traction railway, subway motor vehicle, and to exercise due care in the handling and
either for freight or passenger, or both, stowage, including such methods as their nature
with or without fixed route and whatever requires."
The contention has no merit. In De Guzman v. Court of
may be its classification, freight or
Appeals,7 the Court dismissed a similar contention and held
carrier service of any class, express
the party to be a common carrier, thus - In the case at bar, petitioner denies liability for the damage to
service, steamboat, or steamship line,
the cargo. She claims that the "spoilage or wettage" took
pontines, ferries and water craft,
place while the goods were in the custody of either the
The Civil Code defines "common carriers" in the following engaged in the transportation of
carrying vessel "M/V Hayakawa Maru," which transported the
terms: passengers or freight or both, shipyard,
cargo to Manila, or the arrastre operator, to whom the goods
marine repair shop, wharf or dock, ice
were unloaded and who allegedly kept them in open air for
plant, ice-refrigeration plant, canal,
"Article 1732. Common carriers are persons, nine days from July 14 to July 23, 1998 notwithstanding the
irrigation system, gas, electric light, heat
corporations, firms or associations engaged in the fact that some of the containers were deformed, cracked, or
and power, water supply and power
business of carrying or transporting passengers or otherwise damaged, as noted in the Marine Survey Report
petroleum, sewerage system, wire or
goods or both, by land, water, or air for (Exh. H), to wit:
wireless communications systems, wire
compensation, offering their services to the public." or wireless broadcasting stations and
other similar public services. x x x" 8 MAXU-2062880 - rain gutter
The above article makes no distinction between deformed/cracked
one whose principal business activity is the There is greater reason for holding petitioner to be a
carrying of persons or goods or both, and one who
common carrier because the transportation of goods is an ICSU-363461-3 - left side rubber gasket on
does such carrying only as an ancillary activity . . . integral part of her business. To uphold petitioner's door distorted/partly loose
Article 1732 also carefully avoids making any contention would be to deprive those with whom she
distinction between a person or enterprise offering
contracts the protection which the law affords them
transportation service on a regular or scheduled notwithstanding the fact that the obligation to carry goods for PERU-204209-4 - with pinholes on roof
basis and one offering such service on her customers, as already noted, is part and parcel of panel right portion
an occasional, episodic or unscheduled
petitioner's business.
basis. Neither does Article 1732 distinguish
TOLU-213674-3 - wood flooring we[t] and/or
between a carrier offering its services to the
Now, as to petitioner's liability, Art. 1733 of the Civil Code with signs of water soaked
"general public," i.e., the general community or
population, and one who offers services or solicits provides:
business only from a narrow segment of the MAXU-201406-0 - with dent/crack on roof
general population. We think that Article 1732 panel
Common carriers, from the nature of their business
deliberately refrained from making such
and for reasons of public policy, are bound to
distinctions.
observe extraordinary diligence in the vigilance ICSU-412105-0 - rubber gasket on left
over the goods and for the safety of the side/door panel partly detached loosened.10
So understood, the concept of "common carrier" passengers transported by them, according to all
under Article 1732 may be seen to coincide neatly the circumstances of each case. . . .
with the notion of "public service," under the Public In addition, petitioner claims that Marine Cargo Surveyor
Service Act (Commonwealth Act No. 1416, as Ernesto Tolentino testified that he has no personal
9
In Compania Maritima v. Court of Appeals, the meaning of knowledge on whether the container vans were first stored in
amended) which at least partially supplements the
"extraordinary diligence in the vigilance over goods" was petitioner's warehouse prior to their delivery to the
law on common carriers set forth in the Civil Code.
explained thus: consignee. She likewise claims that after withdrawing the
Under Section 13, paragraph (b) of the Public
container vans from the arrastre operator, her driver, Ricardo
Service Act, "public service" includes:
The extraordinary diligence in the vigilance over Nazarro, immediately delivered the cargo to SMC's
the goods tendered for shipment requires the warehouse in Ermita, Manila, which is a mere thirty-minute
" x x x every person that now or drive from the Port Area where the cargo came from. Thus,
common carrier to know and to follow the required
hereafter may own, operate, manage, or

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the damage to the cargo could not have taken place while condition as the same were received by the For this provision to apply, the rule is that if the improper
these were in her custody.11 former without exception, that is, without any packing or, in this case, the defect/s in the container, is/are
report of damage or loss. Surely, if the container known to the carrier or his employees or apparent upon
vans were deformed, cracked, distorted or dented, ordinary observation, but he nevertheless accepts the same
Contrary to petitioner's assertion, the Survey Report (Exh. H)
the defendant-appellant would report it without protest or exception notwithstanding such condition,
of the Marine Cargo Surveyors indicates that when the
immediately to the consignee or make an he is not relieved of liability for damage resulting
shipper transferred the cargo in question to the arrastre
exception on the delivery receipt or note the same therefrom.14 In this case, petitioner accepted the cargo
operator, these were covered by clean Equipment
in the Warehouse Entry Slip (WES). None of these without exception despite the apparent defects in some of
Interchange Report (EIR) and, when petitioner's employees
took place. To put it simply, the defendant- the container vans. Hence, for failure of petitioner to prove
withdrew the cargo from the arrastre operator, they did so
appellant received the shipment in good order and that she exercised extraordinary diligence in the carriage of
without exception or protest either with regard to the
condition and delivered the same to the consignee goods in this case or that she is exempt from liability, the
condition of container vans or their contents. The Survey
damaged. We can only conclude that the damages presumption of negligence as provided under Art.
Report pertinently reads --
to the cargo occurred while it was in the 173515 holds.
possession of the defendant-appellant. Whenever
Details of Discharge: the thing is lost (or damaged) in the possession of
WHEREFORE, the decision of the Court of Appeals, dated
the debtor (or obligor), it shall be presumed that
May 31, 2001, is AFFIRMED.1âwphi1.nêt
the loss (or damage) was due to his fault, unless
Shipment, provided with our protective supervision there is proof to the contrary. No proof was
was noted discharged ex vessel to dock of Pier proffered to rebut this legal presumption and the SO ORDERED.
#13 South Harbor, Manila on 14 July 1990,
presumption of negligence attached to a common
containerized onto 30' x 20' secure metal vans, carrier in case of loss or damage to the goods.13
covered by clean EIRs. Except for slight dents and
paint scratches on side and roof panels, these
containers were deemed to have [been] received Anent petitioner's insistence that the cargo could not have
in good condition. been damaged while in her custody as she immediately
delivered the containers to SMC's compound, suffice it to say
that to prove the exercise of extraordinary diligence,
.... petitioner must do more than merely show the possibility that
some other party could be responsible for the damage. It
Transfer/Delivery: 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
On July 23, 1990, shipment housed onto 30' x 20' [thereof]." Petitioner failed to do this.
cargo containers was [withdrawn] by Transorient
Container Services, Inc. . . . without exception.
Nor is there basis to exempt petitioner from liability under Art.
1734(4), which provides --
[The cargo] was finally delivered to the consignee's
storage warehouse located at Tabacalera
Compound, Romualdez Street, Ermita, Manila Common carriers are responsible for the loss,
from July 23/25, 1990.12 destruction, or deterioration of the goods, unless
the same is due to any of the following causes
only:
As found by the Court of Appeals:

....
From the [Survey Report], it [is] clear that the
shipment was discharged from the vessel to the
arrastre, Marina Port Services Inc., in good order (4) The character of the goods or defects in the
and condition as evidenced by clean Equipment packing or in the containers.
Interchange Reports (EIRs). Had there been any
damage to the shipment, there would have been a
....
report to that effect made by the arrastre operator.
The cargoes were withdrawn by the defendant-
appellant from the arrastre still in good order and

Averell B. Abrasaldo – II-Sanchez Roman 21