CHAPTER 2

(66)

PROBLEM:
A, in Manila, shipped on board a vessel of B, chairs to be used in the movie house of
consignee C in Cebu. No date for delivery or indemnity for delay was stipulated. The chairs,
however, were not claimed promptly by C and were shipped by mistake back to Manila,
where it was discovered and re- shipped to Cebu. By the time the chairs arrived, the date of
inauguration of the movie house passed by and it had to be postponed. C brings an action for
damages against B claiming loss of profits during the Christmas season when he expected the
movie house to be opened. Decide the case with reasons.

A: C may sue B for the loss of his profits provided that ample proof thereof is presented in
court. The carrier is obligated to transport the goods without delay. The carrier is liable if he
is guilty of delay in the shipment of cargo, causing damages to the consignee. (1979)

(70)

PROBLEM:

If a shipper, without changing the place of delivery changes the consignment of

consignee of the goods (after said goods had been delivered to the carrier), under what
condition will the carrier be required to comply with the new orders of the shipper?

A: Article 360 provides that if the shipper should change the consignee of the goods without
changing their destination, the carrier shall comply with the new order provided the shipper
returns to the carrier the bill of lading and a new one is issued showing the novation of the
contract. However, the shipper must pay all expenses for the change. (1975)

(77)

PROBLEMS:

1.Maria boarded a passenger truck owned by Metro Transit and driven by Juan. While
the truck was proceeding to its destination, it fell into a ravine and several passengers,
including Maria were killed. The truck was insured under a Common Carrier‟s policy with
Island Insurance Company. State the liabilities, if any, of Metro Transit to the heirs of Maria.

A: Metro Transit is liable to the heirs of Maria for breach of contract of carriage. It is clear
that there was breach of contract of carriage because the passenger died while riding the
carrier. The fact that death or injury was caused gives rise to the presumption of negligence.
(1968)

2. A shipped 100 pieces of plywood from Davao City to Manila. He took a marine
insurance policy to insure the shipment against loss or damage due to “perils of the sea,

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 barratry, fire, jettison, pirates and other such perils.” When the ship left the port of Davao, the
shipman in charge forgot to secure one of the portholes, through which sea water seeped
during the voyage, damaging the plywood. A filed a claim against the insurance company
which refused to pay on the ground that the loss or damage was due to a peril of the sea or
any of the risks covered by the policy. It was admitted that the sea was reasonably calm
during the voyage and that no strong winds or waves were encountered by the vessel. How
would you decide the case? Explain.

A: The insurer validly refused to pay because the proximate cause of the damage to the
plywood was not the perils or risks insured against but rather the negligence of the shipman in
charge in forgetting to secure one of the portholes of the ship. However, A can recover his
damages from the shipowner or ship agent of said vessel, for not having exer- cised
extraordinary diligence on vigilance over goods. (1983)

(83)

PROBLEMS AND CASES:

1. Peter hailed a taxicab owned and operated by Jimmy Cheng and driven by Hemie Cortez.
Peter asked Cortez to take him to his office in Malate. On the way to Malate, the taxicab
collided with a passenger jeepney, as a result of which Peter was injured, i.e., he fractured his
left leg. Peter sued Jimmy for damages, based upon a contract of carriage, and Peter won.
Jimmy wanted to challenge the decision before the Supreme Court on the ground that the trial
court erred in not making an express finding as to whether or not Jimmy was responsible for
the collision and, hence, civilly liable to Peter. He went to see you for advice. What will you
tell him? Explain your answer.

A: I will counsel Jimmy to desist from challenging the decision. The cause of action of Peter
is culpa contractual, hence, the carrier‟s negligence is presumed. The presumption arises
because there is no question that there was a contract of carriage between Peter and the carrier
and Peter was injured while under the care of the said carrier. Consequently, the burden of
proof rests on Jimmy to establish that despite an exercise of utmost diligence the collision
could not have been avoided. (1990)

2. In an action grounded on the contract of carriage, is there a need for the court to make an
express finding of fault or negligence on the part of the carrier in order to hold it liable for
claims in behalf of the injured or deceased passengers? Explain.

A: No, common carriers are presumed to have been at fault or to have acted negligently in the
case of death or injuries to passengers. The burden is upon the carrier to prove that he
observed the utmost diligence of a very cautious person, with due regard for all
circumstances. (1982)

3. In a court case involving claims for damages arising from death and injury of bus
passengers, counsel for the bus operator files a demurrer to evidence arguing that the
complaint should be dismissed because the plaintiffs did not submit any evidence that the
operator or its employees were negligent. If you were the judge, would you dismiss the
complaint?

A: No, I will not dismiss the complaint provided that there was proof of the death of and/or
injury to passengers. Negligence on the part of the carrier is presumed the moment the
passenger with whom the carrier had a contract is injured. The burden is on the common
carrier to prove that he has a valid defense. (1997)

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 (84)

4. Plaintiff alleges that he is the owner and consignee of two cases of books, shipped in
good order and condition at New York, U.S.A., on board the defendant‟s steamship President
Garfield, for transport and delivery to the plaintiff in the City of Manila, all freight charges
paid. The two cases arrived in Manila on September 1, 1927, in bad order and damaged
condition, resulting in the total loss of one case and a partial loss of the other. The loss in one
case is PI,630.00, and the other P700.00, for which he filed his claims, and defendant has
refused and neglected to pay, giving as its reason that the damage in question “was caused by
sea water.” Is the defendant liable to the plaintiff?

Yes, the defendant is liable. The defendant having received the two boxes in good condition,
its legal duty was to deliver them to the plaintiff in the same condition in which it received
them. From the time of their delivery to the defendant in New York until they are delivered to
the plaintiff in Manila, the boxes were under the control and supervision of the defendant and
beyond the control of the plaintiff. The defendant having admitted that the boxes were
damaged while in transit and in its possession, the burden of proof then shifted, and it
devolved upon the defendant to both allege and prove that the damage was caused by reason
of some fact which exempted it from liability. As to how the boxes were damaged, when or
where, was a matter peculiarly and exclusively within the knowledge of the defendant and in
the very nature of things could not be in the knowledge of the plaintiff. To require the plaintiff
to prove as to when and how the damage was caused would force him to call and rely upon
the employees of the defendant’s ship, which in legal effect would be to say that he could not
recover any damage for any reason. That is not the law. Shippers who are forced to ship
goods on an ocean liner or any other ship have some legal rights, and when goods are
delivered on board ship in good order and condition, and the shipowner delivers them to the
shipper in bad order and condition, it then devolves upon the shipowner to both allege and
prove that the goods were damaged by the reason of some fact which legally exempts him
from liability; otherwise, the shipper would be left without any redress, no matter what may
have caused the damage. (Amado Mirasol v. The Robert Dollar Co., G.R. No. L- 29721,
March 27, 1929)

(85-86)

5. It appears that sometime in the evening of March 10, 1995, at the Manila Domestic Airport, the
late Jose Marcial K. Ochoa boarded and rode a taxicab with Plate No. PKR-534, a passenger vehicle
for hire owned and operated by defendant corporation under the business name “Avis Coupon Taxi”
(Avis) and driven by its employee and authorized driver Bibiano Padilla, Jr. on his way home to
Teacher‟s Village, Diliman, Quezon City. At about 11:00 p.m., the taxicab was cruising along
Epifanio delos Santos Avenue [EDSA], in front of Camp Aguinaldo in Quezon City at high speed.
While going up the Boni Serrano (Santolan) fly-over, it overtook another cab driven by Pablo Clave
and tried to pass another vehicle, a ten-wheeler cargo truck. Because of the narrow space between
the left side railing of the flyover and the ten-wheeler truck, the Avis cab was unable to pass and
because of its speed, its driver (Padilla) was unable to control it. To avoid colliding with the truck,
Padilla turned the wheel to the left causing his taxicab to ram the railing throwing itself off the fly-
over and fell on the middle surface of EDSA below. The forceful drop of the vehicle on the floor of
the road broke and split it into two parts. Both driver Padilla and passenger Jose Marcial K. Ochoa
were injured and rushed to the hospital. At the East Avenue Medical Center, Ochoa was not as lucky
as Padilla who was alive. He was declared dead on arrival from the accident. The death certificate
issued by the Office of the Civil Registrar of Quezon City cited the cause of his death as vehicular
accident. G&S argues that it is not liable because the collision was allegedly unforeseen since its
driver had every right to expect that the delivery van would just overtake him and not hit the side of
the taxi. Is G&S liable?

A: Yes, G&S is liable to the heirs of Jose Marcial. What is clear from the records is that there
existed a contract of carriage between G & S , as the owner and operator of the Avis taxicab, and
Jose Marcial, as the passenger of said vehicle. As a common carrier, G&S “is bound to carry [Jose

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 Marcial] safely as far as human care and foresight can provide, using the utmost diligence of very
cautious persons, with due regard for all the circumstances.” However, Jose Marcial was not able to
reach his destination safely as he died during the course of the travel. “In a contract of carriage, it is
presumed that the common carrier is at fault or is negligent when a passenger dies or is injured. In
fact, there is even no need for the court to make an express finding of fault or negligence on the part
of the common carrier.

This statutory presumption may only be overcome by evidence that the carrier exercised
extraordinary diligence.” Unfortunately, G&S miserably failed to overcome this presumption
because it is clear that the accident which led to Jose Marcial’s death was due to the reckless driving
and gross negligence of G&S’ driver, Padilla, thereby holding G&S liable to the heirs of Jose
Marcial for breach of contract of carriage. (Heirs of Marcial K. Ochoa v. G&S Transport
Corporation, G.R. Nos. 170071 and 170125, March 9, 2011

(91-94)

PROBLEMS AND CASES:

1. S shipped goods from Australia on board a foreign vessel owned and operated by X
shipping company, based in Australia and represented in the Philippines by R. The goods were
consigned to T of Manila and insured by U against all risks. Upon arrival in Manila Bay, the goods
were discharged from the vessel to a lighter owned by the Bay Brokerage Co. When delivered to
and received by T, the goods were found to have sustained losses or damages. Evidence disclosed
that the damage occurred while the goods were in the custody of the carrier. The insurance company
paid the amount of the loss but sought reimbursement from X and/or R. R disclaimed any liability
alleging that he is a mere agent of X, and having acted as agent of a disclosed principal is, therefore,
not liable. What is the liability, if any, of Bay Brokerage Co.?

A: Bay Brokerage Co. has no liability. The facts indicate that the goods were not yet delivered to
the brokerage company when they were damaged. Even if the said company can be considered a
common carrier, its duty starts only upon delivery of the goods.

2. Star Shipping Lines accepted 100 cartons of sardines from Master to be delivered to 555
Company in Manila. Only 88 cartons were delivered, however, these were in bad condition. 555
Company claimed from Star Shipping Lines the value of the missing goods, as well as the damaged
goods. Star Shipping Lines refused because the former failed to present a bill of lading. Resolve
with reasons the claim of 555 Company.

A: The claim of 555 Company must prosper. The carrier breached its obligation to safely transport
the goods to its destination. The fact that the shipper was not able to present the bill of lading is not
a bar to recovery. The contract of carriage was already perfected and effective despite the absence
of the bill of lading. (2005)

3. Delsan received on board MT Larusan a shipment consisting of 1,986.627 k/1 Automotive

Diesel Oil (diesel oil) at the Bataan Refinery Corporation for transportation and delivery to the bulk
depot in Bacolod City of Caltex Phils., Inc. (Caltex). On August 7, shipment arrived in Bacolod
City. Immediately thereafter, unloading operations commenced. The discharging of the diesel oil
started at about 1:30 PM of the same day. However, at about 10:30 PM, the discharging had to be
stopped on account of the discovery that the port bow mooring of the vessel was intentionally cut or
stolen by unknown persons. Because there was nothing holding it, the vessel drifted westward,
dragged and stretched the flexible rubber hose attached to the riser, broke the elbow into pieces,
severed completely the rubber hose connected to the tanker from the main delivery line at sea bed
level and ultimately caused the diesel oil to spill into the sea. To avoid further spillage, the vessel’s
crew tried water flushing to clear the line of the diesel oil but to no avail. In the meantime, the shore
tender, who was waiting for the completion of the water flushing, was surprised when the tanker
signaled a “red light” which meant stop pumping. Unaware of what happened, the shore tender,
thinking that the vessel would, at any time, resume pumping, did not shut the storage tank gate
valve. As all the gate valves remained open, the diesel oil that was earlier discharged from the
vessel into the shore tank backflowed. Due to non-availability of a pump boat, the vessel could not
send somebody ashore to inform the people at the depot about what happened. After almost an hour,
a gauger and an assistant surveyor from the Caltex’s Bulk Depot Office boarded the vessel. It was

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 only then that they found out what had happened. Thereafter, the duo immediately went ashore to
see to it that the shore tank gate valve was closed. The loss of diesel oil due to spillage was placed
at 113.788 k/1 while some 435,081 k/1 thereof backflowed from the shore tank. As a result of
spillage and backflow of diesel oil, Caltex sought recovery of the loss from Delsan, but the latter
refused to pay. Delsan’s argued that it should not be held liable for the loss of diesel oil due to
backflow because the same had already been actually and legally delivered to Caltex at the time it
entered the shore tank. Is the argument tenable?

No. Delsan’s argument that it should not be held liable for the loss of diesel oil due to backflow
because the same had already been actually and legally delivered to Caltex at the time it entered the
shore tank holds no water. It had been settled that the subject cargo was still in the custody of
Delsan because the discharging thereof has not yet been finished when the backflow occurred. Since
the discharging of the cargo into the depot has not yet been completed at the time of the spillage
when the backflow occurred, there is no reason to imply that there was actual delivery of the cargo
to the consignee. Delsan is straining the issue by insisting that when the diesel oil entered into the
tank of Caltex on shore, there was legally, at that moment, a complete delivery thereof to Caltex. To
be sure, the extraordinary responsibility of common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by, the carrier for transportation until the
same are delivered, actually or constructively, by the carrier to the consignee, or to a person who
has the right to receive them. The discharging of oil products to Caltex Bulk Depot has not yet been
finished, Delsan still has the duty to guard and to preserve the cargo. The carrier still has in it the
responsibility to guard and preserve the goods, a duty incident to its having the goods transported.”
(Delsan Transport Lines, Inc. v. American Home Assurance Corp., G.R. No. 149019, August 15,
2006, 530 Phil. 332)

4. On April 4, 1989, BM shipped on board the vessel Nen Jiang, owned and operated by CO
Shipping Co. represented by its agent WALLEM. 3,500 boxes of watermelons valued at
US$5,950.00 covered by Bill of Lading No. HKG 99012 and exported through Letter of Credit No.
HK 1031/30 issued by National Bank of Pakistan and 1,611 boxes of fresh mangoes with a value of
US$14,273.46 covered by Bill of Lading No. HKG 99013 and exported through Letter of Credit
No. HK 1032/30 also issued by PAKISTAN BANK. The Bills of Lading contained the following
pertinent provision: “One of the Bills of Lading must be surrendered duly endorsed in exchange for
the goods or delivery order. The shipment was bound for Hongkong with PAKISTAN BANK as
consignee and Great Prospect Company of Kowloon, Hong Kong (hereinafter GPC) as notify
party.” The goods were delivered to GPC without the bills of lading. a) Can carrier validly deliver
the goods to GPC? b) Did the common carrier validly deliver the goods without the bill of lading or
bank guarantee?

a) Yes, the goods can be validly delivered to GPC. The extraordinary responsibility of the
common carriers lasts until actual or constructive delivery of the cargoes to the consignee or to the
person who has a right to receive them. PAKISTAN BANK was indicated in the bills of lading as
consignee whereas GPC was the notify party. However, in the export invoices GPC was clearly
named as buyer/importer. Petitioner also referred to GPC as such in his demand letter to respondent
WALLEM and in his complaint before the trial court. This premise draws us to conclude that the
delivery of the cargoes to GPC as buyer/importer which, conformably with Article 1736 had, other
than the consignee, the right to receive them was proper.

b) Yes. The carrier submitted in evidence a telex dated April 5, 1989 as basis for delivering the
cargoes to GPC without the bills of lading and bank guarantee. The telex instructed delivery of
various shipments to the respective consignees without need of presenting the bill of lading and
bank guarantee per the respective shipper‟s request since “for prepaid shipt ofrt charges already
fully paid.” Petitioner was named therein as shipper and GPC as consignee with respect to Bill of
Lading Nos. HKG 99012 and HKG 99013. To implement the said telex instruction, the delivery of
the shipment must be to GPC, the notify party or real importer/buyer of the goods and not the
Pakistani Bank since the latter can very well present the original Bills of Lading in its possession.
Likewise, if it were the Pakistani Bank to whom the cargoes were to be strictly delivered, it will no
longer be proper to require a bank guarantee as a substitute for the Bill of Lading. To construe
otherwise will render meaningless the telex instruction. After all, the cargoes consist of perishable
fresh fruits and immediate delivery thereof to the buyer/importer is essentially a factor to reckon
with. Besides, GPC is listed as one among the several consignees in the telex (Exhibit 5-B) and the
instruction in the telex was to arrange delivery of A/M shipment (not any party) to respective
consignees without presentation of OB/L and bank guarantee. (Benito Macam u. Court of Appeals,

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 et al., G.R. No. 125524, August 25, 1999)

(97-99)

PROBLEMS AND CASES:

1. X, an 80-year old epileptic, boarded the S/S Tamaraw in Manila going to Mindoro. To
disembark, the passengers have to walk through a gangplank. While negotiating the gangplank, X
slipped and fell into the waters. X was saved from drowning and was brought to a hospital but after
a month died from pneumonia. Except for X, all passengers were able to walk through the
gangplank. What is the liability of the owner of S/S Tamaraw?

A: The owner of S/S Tamaraw is liable for the death of X. Failure to exercise utmost diligence
in the safety of passengers is presumed the moment the passenger did not reach his destination. In
the present case, X was still a passenger when he fell into the waters because he was only
disembarking from the vessel. Hence, the presumption against the carrier is operative. It is up to the
carrier to prove its exercise of utmost diligence. Moreover, it is well-settled that if, in the use of a
gangplank, a passenger falls off and is injured, the carrier is liable for the injuries sustained
irrespective of the cause of the fall if a sufficient gangplank would have prevented the injury. (1989)

2. A bus of GL Transit on its way to Davao stopped to enable a passenger to alight. At that
moment, Santiago, who had been waiting for a ride, boarded the bus. However, the bus driver failed
to notice Santiago who was still standing on the bus platform, and stepped on the accelerator.
Because of the sudden motion, Santiago slipped and fell down, suffering serious injuries. May
Santiago hold GL Transmit liable for breach of contract of carriage?

A: Yes.Santiago may hold GL Transit liable for breach of contract. It is well-settled that, motor
vehicles like passenger jeepneys and buses are duty bound to stop their conveyances a reasonable
length of time in order to afford passengers an opportunity to board and enter, and they are liable for
injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their
conveyances while they do so. (Dangwa Transportation Co., Inc. v. CA, et al., G.R. No. 95582,
October 7, 1991, 202 SCRA 574) Obviously, the driver of the bus did not exercise utmost diligence
in affording Santiago reasonable opportunity to board the bus. (1996).

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

A: Yes,LRTA is liable but Prudent is NOT liable. The law requires common carriers to carry
passengers safely using the utmost diligence of very cautious persons with due regard for all
circumstances. Such duty of a common carrier to provide safety to its passengers so obligates it not
only during the course of the trip but for so long as the passengers are within its premises and where
they ought to be in pursuance to the contract of carriage. In the absence of satisfactory explanation
by the carrier on how the accident occurred, which petitioners, according to the appellate court,
have failed to show, the presumption would be that it has been at fault, an exception from the
general rule that negligence must be proved. The foundation of LRTA’s liability is the contract of
carriage and its obligation to indemnify the victim arises from the breach of that contract by reason
of its failure to exercise the high diligence required of the common carrier. In the discharge of its
commitment to ensure the safety of passengers, a carrier may choose to hire its own employees or
avail itself of the services of an outsider or an independent firm to undertake the task. In either case,
the common carrier is not relieved of its responsibilities under the contract of carriage. With respect
to Prudent, if at all, that liability could only be for tort under the provisions of Article 2176 and

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 related provisions, in conjunction with Article 2180, of the Civil Code. The premise, however, for
the employer‟s liability is negligence or fault on the part of the employee. Once such fault is
established, the employer can then be made liable on the basis of the presumption juris tantum that
the employer failed to exercise diligentissimi patris families in the selection and supervision of its
employees. The liability is primary and can only be negated by showing due diligence in the
selection and supervision of the employee. Unfortunately, there is nothing to link Prudent to the
death of Nicanor (Navidad), for the reason that the negligence of its employee, Escartin, has not
been duly proven. Hence, Prudent cannot be made liable. (Light Railway Transit Authority v.
Marjorie Navidad, G.R. No. 145804, February 6, 2003)

(100)

On May 13, 1985, private respondents filed a complaint for damages against petitioners for the
death of Pedrito Cudiamat as a result of a vehicular accident which occurred on at Marivic, Sapid,
Mankayan, Benguet. It was alleged that on March 25, 1985, while petitioner Theodore M.
Lardizabal was driving a passenger bus belonging to petitioner corporation in a reckless and
imprudent manner and without due regard to traffic rules and regulations and safety to persons and
property, it ran over its passenger, Pedrito Cudiamat. However, instead of bringing Pedrito
immediately to the nearest hospital, the said driver, in utter bad faith and without regard to the
welfare of the victim, first brought his other passengers and cargo to their respective destinations
before bringing said victim to the Lepanto Hospital where he expired. The place of the accident and
the place where one of the passengers alighted were both between Bunkhouses 53 and 54, hence the
bus was at full stop when the victim boarded the same. The victim fell from the platform of the bus
when it suddenly accelerated forward and was run over by the rear right tires of the physical
evidence on where he was thereafter found in relation to the bus when it stopped. The contention of
petitioners that the driver and the conductor had no knowledge that the victim would ride on the
bus, since the latter had supposedly not manifested his intention to board the same. Is the argument
tenable? Is the carrier liable?

The carrier is liable. The contention of petitioners that the driver and the conductor had no
knowledge that the victim would ride on the bus, since the latter had supposedly not manifested his
intention to board the same is not tenable. When the bus is not in motion there is no necessity for a
person who wants to ride the same to signal his intention to board. A public utility bus, once it
stops, is in effect making a continuous offer to bus riders. Hence, it becomes the duty of the driver
and the conductor, every time the bus stops, to do no act that would have the effect of increasing the
peril to a passenger while he was attempting to board the same. The premature acceleration of the
bus in this case was a breach of such duty. It is the duty of common carriers of passengers, including
common carriers by railroad train, streetcar, or motorbus, to stop their conveyances a reasonable
length of time in order to afford passengers an opportunity to board and enter, and they are liable for
injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their
conveyances while they are doing so. Further, even assuming that the bus was moving, the act of the
victim in boarding the same cannot be considered negligent under the circumstances. In this case,
the bus had “just started” and “was still in slow motion” at the point where the victim had boarded
and was on its platform. It is not negligence per se, or as a matter of law, for one to attempt to board
a train or streetcar which is moving slowly. An ordinarily prudent person would have made the
attempt to board the moving conveyance under the same or similar circumstances. The fact that
passengers board and alight from a slowly moving vehicle is a matter of common experience and
both the driver and conductor in this case could not have been unaware of such an ordinary practice.
The victim herein, by stepping and standing on the platform of the bus, is already considered a
passenger and is entitled to all the rights and protection pertaining to such a contractual relation.
Hence, it has been held that the duty which the carrier of passengers owes to its patrons extends to
persons boarding the cars as well as to those alighting therefrom. Moreover, the circumstances
under which the driver and the conductor failed to bring the gravely injured victim immediately to
the hospital for medical treatment is a patent and incontrovertible proof of their negligence. It defies
understanding and can even be stigmatized as callous indifference. (Dangwa Transportation Co. v.
Court of Appeals, G.R. No. 95582, October 7, 1991)

(101-103)

On December 20, 1953, at about noontime, plaintiffs, husband and wife, together with their
minor daughters, namely, Milagros, 13 years old, Raquel, about 4 years old, and Fe, over 2 years
old, boarded the Pambusco Bus No. 352, bearing plate TPU No. 757 (1953 Pampanga), owned and
operated by the defendant, at San Fernando, Pampanga, bound for Anao, Mexico, Pampanga. At the

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 time, they were carrying with them four pieces of baggage containing their personal belongings.
The conductor of the bus, who happened to be a half- brother of plaintiff Mariano Beltran, issued
three tickets covering the full fares of the plaintiff and their eldest child, Milagros. No fare was
charged on Raquel and Fe, since both were below the height at which fare is charged in accordance
with the appellant‟s rules and regulations. After about an hour’s trip, the bus reached Anao whereat
it stopped to allow the passengers bound therefor, among whom were the plaintiffs and their
children to get off. With respect to the group of the plaintiffs, Mariano Beltran, then carrying some
of their baggage, was the first to get down the bus, followed by his wife and his children. Mariano
led his companions to a shaded spot on the left pedestrian side of the road about four or five meters
away from the vehicle. Afterwards, he returned to the bus in controversy to get his other bayong,
which he had left behind, but in so doing, his daughter Raquel followed him, unnoticed by her
father. While said Mariano Beltran was on the running board of the bus waiting for the conductor to
hand him his bayong which he left under one of its seats near the door, the bus, whose motor was
not shut off while unloading, suddenly started moving forward, evidently to resume its trip,
notwithstanding the fact that the conductor has not given the driver the customary signal to start,
since said conductor was still attending to the baggage left behind by Mariano Beltran. Incidentally,
when the bus was again placed into a complete stop, it had travelled about ten meters from the point
where the plaintiffs had gotten off. Sensing that the bus was again in motion, Mariano Beltran
immediately jumped from the running board without getting his bayong from the conductor. He
landed on the side of the road almost in front of the shaded place where he left his wife and
children. At that precise time, he saw people beginning to gather around the body of a child lying
prostrate on the ground, her skull crushed, and without life. The child was none other than his
daughter Raquel, who was run over by the bus in which she rode earlier together with her parents. Is
the carrier liable?

A: Yes, the carrier is liable for damages for the death of the child, Raquel Beltran. It may be pointed
out that although it is true that respondent Mariano Beltran, his wife, and their children (including
the deceased child) had alighted from the bus at a place designated for disembarking or unloading
of passengers, it was also established that the father had to return to the vehicle (which was still at a
stop) to get one of his bags or bayong that was left under one of the seats of the bus. There can be
no controversy that as far as the father is concerned, when he returned to the bus for his bayong
which was not unloaded, the relation of passenger and carrier between him and the petitioner
remained subsisting. For, the relation of carrier and passenger does not necessarily cease where the
latter, after alighting from the car, aids the carrier‟s servant or employee in removing his baggage
from the car. The issue to be determined here is whether as to the child, who was already led by the
father to a place about 5 meters away from the bus, the liability of the carrier for her safety under
the contract of carriage also persisted. It has been recognized as a rule that the relation of carrier and
passenger does not cease at the moment the passenger alights from the carrier‟s vehicle at a place
selected by the carrier at the point of destination, but continues until the passenger has had a
reasonable time or a reasonable opportunity to leave the carrier‟s premises. And, what is a
reasonable time or a reasonable delay within this rule is to be determined from all the
circumstances. Thus, a person who, after alighting from a train, walks along the station platform is
considered still a passenger. So also, where a passenger has alighted at his destination and is
proceeding by the usual way to leave the company‟s premises, but before actually doing so is halted
by the report that his brother, a fellow passenger, has been shot, and he in good faith and without
intent of engaging in the difficulty, returns to relieve his brother, he is deemed reasonably and
necessarily delayed and thus continues to be a passenger entitled as such to the protection of the
railroad and company and its agents. In the present case, the father returned to the bus to get one of
his baggages which was not unloaded when they alighted from the bus. Raquel, the child that she
was, must have followed the father. However, although the father was still on the running board of
the bus awaiting for the conductor to hand him the bag or bayong, the bus started to run, so that
even he (the father) had to jump down from the moving vehicle. It was at this instance that the
child, who must be near the bus, was run over and killed. In the circumstances, it cannot be claimed
that the carrier‟s agent had exercised the “utmost diligence” of a “very cautions person” required by
Article 1755 of the Civil Code to be observed by a common carrier in the discharge of its obligation
to transport safely its passengers. In the first place, the driver, although stopping the bus,
nevertheless did not put off the engine. Secondly, he started to run the bus even before the bus
conductor gave him the signal to go and while the latter was still unloading part of the baggages of
the passengers Mariano Beltran and family. The presence of said passengers near the bus was not
unreasonable and they are, therefore, to be considered still as passengers of the carrier, entitled to
the protection under their contract of carriage. But even assuming arguendo that the contract of
carriage has already terminated, herein petitioner can be held liable for the negligence of its driver
pursuant to Article 2180 of the Civil Code. The plaintiffs sufficiently pleaded the culpa or

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 negligence upon which the claim was predicated when it was alleged in the complaint that “the
death of Raquel Beltran, plaintiffs‟ daughter, was caused by the negligence and want of exercise of
the utmost diligence of a very cautious person on the part of the defendants and their agent.” This
allegation was also proven when it was established during the trial that the driver, even before
receiving the proper signal from the conductor, and while there were still persons on the running
board of the bus and near it, started to run off the vehicle. The presentation of proof of the
negligence of its employee gave rise to the presumption that the defendant employer did not
exercise the diligence of a good father of the family in the selection and supervision of its
employees. And this presumption, as the Court of Appeals found, petitioner had failed to overcome.
Consequently, petitioner must be adjudged pecuniarily liable for the death of the child Raquel
Beltran. (La Mallorca v. Court of Appeals, G.R. No. L-20761, July 27, 1966, 17 SCRA 739)

The evidence disclosed that on May 11, 1975, Anacleto Viana boarded the vessel MTV
Antonia, owned by defendant, at the port at San Jose, Occidental Mindoro, bound for Manila,
having purchased a ticket (No. 117392) in the sum of P23.10 (Exh. „B‟). On May 12, 1975, said
vessel arrived at Pier 4, North Harbor, Manila, and the passengers therein disembarked, a gangplank
having been provided connecting the side of the vessel to the pier. Instead of using said gangplank,
Anacleto Viana disembarked on the third deck which was on the level with the pier. After said
vessel had landed, the Pioneer Stevedoring Corporation took over the exclusive control of the
cargoes loaded on said vessel pursuant to the Memorandum of Agreement dated July 26, 1975 (Exh.
„21) between the third party defendant Pioneer Stevedoring Corporation and defendant Aboitiz
Shipping Corporation. The crane owned by the third party defendant and operated by its crane
operator Alejo Figueroa was placed alongside the vessel and one hour after the passengers of said
vessel had disembarked, it started operation by unloading the cargoes from said vessel. While the
crane was being operated, Anacleto Viana who had already disembarked from said vessel obviously
remembering that some of his cargoes were still loaded in the vessel, went back to the vessel, and it
was while he was pointing to the crew of the said vessel to the place where his cargoes were loaded
that the crane hit him, pinning him between the side of the vessel and the crane. He was thereafter
brought to the hospital where he later expired three days thereafter, on May 15, 1975, the cause of
his death according to the Death Certificate being “hypostatic pneumonia secondary to traumatic
fracture of the pubic bone lacerating the urinary bladder.” Is the carrier liable? Was Viana still a
passenger at the time of the accident?

Yes, the carrier is liable for the death of the victim. The victim was still a passenger at that time.
The rule is that the relation of carrier and passenger continues until the passenger has been landed at
the port of destination and has left the vessel owner‟s dock or premises. Once created, the
relationship will not ordinarily terminate until the passenger has, after reaching his destination,
safely alighted from the carrier‟s conveyance or had a reasonable opportunity to leave the carrier’s
premises. All persons who remain on the premises a reasonable time after leaving the conveyance
are to be deemed passengers, and what is a reasonable time or a reasonable delay within this rule is
to be determined from all the circumstances, and includes a reasonable time to see after his baggage
and prepare for his departure. The carrier-passenger relationship is not terminated merely by the fact
that the person transported has been carried to his destination if, for example, such person remains
in the carrier’s premises to claim his baggage. The victim Anacleto Viana was still a passenger at
the time of the incident. When the accident occurred, the victim was in the act of unloading his
cargoes, which he had every right to do, from petitioner’s vessel. As earlier stated, a carrier is duty
bound not only to bring its passengers safely to their destination but also to afford them a reasonable
time to claim their baggage. Even if he had already disembarked an hour earlier, his presence in
petitioner‟s premises was not without cause. The victim had to claim his baggage which was
possible only one hour after the vessel arrived since it was admittedly standard procedure in the
case of petitioner‟s vessels that the unloading operations shall start only after that time.
Consequently, under the foregoing circumstances, the victim Anacleto Viana is still deemed a
passenger of said carrier at the time of his tragic death. There is no showing that petitioner was
extra-ordinarily diligent in requiring or seeing to it that said precautionary measures were strictly
and actually enforced to subserve their purpose of preventing entry into the forbidden area. By no
stretch of liberal evaluation can such perfunctory acts approximate the “utmost diligence of very
cautious persons” to be exercised “as far as human care and foresight can provide” which is
required by law of common carriers with respect to their passengers. (Aboitiz Shipping Corp. v.
Court of Appeals, G.R. No. 84458)

(117)

PROBLEMS:

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 1. Do syndicated Ores have the right to insist that the vessel may carry the cargo to the U.S. per
bill of lading, or that the ship owner hire a substitute vessel to complete the contracted voyage in
accordance with the extraordinary diligence required of common carriers in the carriage of goods?

2. A: It depends. The captain shall be obliged to charter at his expense another one in good
condition to carry the cargo to its destination if the vessel became unseaworthy during the voyage.
Under Article 657 of the Code of Commerce, if the captain should not furnish through indolence or
malice, a vessel to take the cargo to its destination, the shippers may charter one at the expense of
the captain/shipowner. (1982)

3. While in Hong Kong, X shipped on the S/S Burma Maru for Manila 500 cages of fine yellow
colored canaries which he intended to sell in his pet shop here. The shipment is worth P4,000.00.
Due to lack of proper facilities in the hold of the ship, all the birds died during the trip. Under the
provisions of the COGSA, what is the liability of the carrier?

A: The owner of S/S Burma Maru is liable for the damages caused by the death of the birds during
the trip. Section 3 of the COGSA provides that the carrier is obligated to make the holds of the ship
fit for the cargo that it is accepting. Obviously, the carrier failed to comply with such obligation.
(1967)

(128-129)

PROBLEMS:

1. JRT, Inc. entered into a contract with C Company of Japan to export anahaw fans valued at
$23,000.00. As payment thereof, a letter of credit was issued to JRT, Inc. by the buyer. The letter of
credit required the issuance of an on-board bill of lading and prohibited transshipment. The
President of JRT, Inc. then contracted a shipping agent to ship the anahaw fans through O
Containers Lines, specifying the requirements of the letter of credit. However, the bill of lading
issued by the shipping lines bore the notation “received for shipment” and contained an entry
indicating transshipment to Hong Kong. The President of JRT, Inc. personally received and signed
the bill of lading and despite the entries, he delivered the corresponding check in payment of the
freight. The shipment was delivered at the port of discharge but the buyer refused to accept the
anahaw fans because there was no onboard bill of lading, and there was transshipment since the
goods were transferred in Hong Kong from MV Pacific, the feeder vessel, to MV Oriental, a mother
vessel. JRT argued that the same cannot be considered transshipment because both vessels belong to
the same shipping company, a) Was there transshipment? b) JRT, Inc. further argued that assuming
there was transshipment, it cannot be deemed to have agreed thereto even if it signed the bill of
lading containing such entry because it has made known to the shipping lines from the start that
transshipment was prohibited under the letter of credit and that, it had no intention to allow
transshipment of the subject cargo. Is the argument tenable? Reason.

A: a) Yes, there was transshipment. Transshipment, in maritime law, is defined as “the act of taking
cargo out of one ship and loading it in another,” or “the transfer of goods from the vessel stipulated
in the contract of affreightment to another vessel before the place of destination named in the
contract has been reached,” or “the transfer for further transportation from one ship or conveyance
to another.” Clearly, either in its ordinary or its strictly legal acceptation, it does not matter whether
both vessels belong to one and the same person. b) No, the argument is not tenable. JRT, Inc.
accepted the bill of lading, hence, it is bound by the terms and conditions thereof. Since the bill of
lading allows transshipment, JRT can no longer complain that such transshipment occurred.

(140)

PROBLEM:

1. Marino was a passenger on a train. Another passenger, Juancho, had taken a gallon of
gasoline placed in a plastic bag into the same coach where Marino was riding. The gasoline ignited
and exploded causing injury to Marino who filed a civil suit for damages against the railway
company claiming that Juancho should have been subjected to inspection by its conductor. The
railway company disclaimed liability resulting from the explosion contending that it was unaware
of the contents of the plastic bag and invoking the right of Juancho to privacy, a) Should the railway

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 company be held liable for damages? b) If it were an airline company involved, would your answer
be the same? Explain your answer briefly.

A: a) No. The railway company is not liable for damages. This is subject to the qualification that the
company should prove that it, through the exercise of extraordinary diligence, cannot detect the
presence of gasoline. It should be noted that in overland transportation, the common carrier is not
bound nor empowered to make an examination on the contents of packages or bags particularly
those handcarried by passengers.

b) No, my answer would not be the same. If an airline company was involved, it is duty bound to
inspect each and every cargo that is brought into the aircraft (R.A. 6235, infra). Exercise of
extraordinary diligence would therefore result in the discovery of the gasoline. (1992)

2. A, as paying passenger, boarded a plan of X & Co., a duly authorized air carrier bound
from Manila to Cebu. On the way, the plane exploded in mid- air, and crashed, causing the death of
all persons on board. It was determined that the mid-air explosion was due to the explosive device
contained in a suitcase by another passenger in the ill-fated aircraft. If you are the judge, how will
you rule?

A: I will make the carrier liable. The carrier is bound to exercise extraordinary diligence in carrying
its passengers. It is presumed to be negligent when its passengers died when the aircraft exploded.
Moreover, the negligence of the carrier is apparent because an explosive device was brought into
the carrier without being detected by the employees. Under R.A. 6235, the carrier is bound to
inspect and investigate suspicious packages that are being brought into the aircraft. This duty was
not complied with because the explosive device was not detected by the carrier’s personnel.

(155-158)

CASES:

1. On the night of October 5, 1963, plaintiffs-appellees attended a birthday party inside the
United Housing Subdivision in Paranaque, Rizal. After the party which broke up at about 11
o‟clock that evening, the plaintiffs- appellees proceeded home in their Vauxhall car with Victorino
Cusi at the wheel. Upon reaching the railroad tracks, finding that the level crossing bar was raised
and seeing that there was no flashing red light, and hearing no whistle from any coming train, Cusi
merely slackened his speed and proceeded to cross the tracks. At the same time, a train bound for
Lucena traversed the crossing, resulting in a collision between the two. The impact threw the
plaintiffs- appellees out of their car which was smashed. One Benjamin Franco, who came from the
same party and was driving a vehicle right behind them, rushed to their aid and brought them to San
Juan de Dios Hospital for emergency treatment. Later, the plaintiffs-appellees were transferred to
the Philippine General Hospital. A week later, Mrs. Cusi transferred to the Manila Doctors Hospital
where Dr. Manuel Rivera, head of the Orthopedic and Fracture Service of the Philippine General
Hospital performed on her a second operation and continued to treat her until her discharge from the
hospital on November 2,1963. Thereafter, Dr. Rivera treated her as an out-patient until the end of
February, 1964 although by that time the fractured bones had not yet healed. Mrs. Cusi was also
operated on by Dr. Francisco Aguilar, Director of the National Orthopedic Hospital, in May, 1964
and in August, 1965, after another operation in her upper body from the chest to the abdomen, she
was placed in cast for some three months and her right arm immobilized. Is the railway company
liable?

A: The railway company is liable because the circumstances attendant to the collision shows
negligence on the its part. “Undisputably, the warning devices installed at the railroad crossing were
manually operated; there were only two shifts of guards provided for the operation thereof — one,
the 7:00 A.M. to 3:00 P.M. shift, and the other, the 3:00 P.M. to 11:00 P.M. shift. On the night of the
accident, the train for Lucena was on an unscheduled trip after 11:00 P.M. During that precise hour,
the warning devices were not operating for no one attended to them. Also, as observed by the lower
court, the locomotive driver did not blow his whistle, thus: “... he simply sped on without taking an
extra precaution of blowing his whistle from a distance of 10 to 50 meters from the crossing. That
the train was running at full speed is attested to by the fact that notwithstanding the application of
the emergency brakes, the train did not stop until it reached a distance of around 100 meters.” These
facts assessed together show the inadequacy, nay, the absence, of precautions taken by the
defendant-appellant to warn the travelling public of the impending danger. It is clear to Us that as

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 the signal devices were wholly manually-operated, there was an urgent need for a flagman or guard
to man the crossing at all times. As it was, the crossing was left unattended to after eleven o‟clock
every night and on the night of the accident. We cannot in all reason justify or condone the act of
the defendant-appellant allowing the subject locomotive to travel through the unattended crossing
with inoperative signal devices, but without sending any of its employees to operate said signal
devices so as to warn oncoming motorists of the approach of one of its locomotives. It is not
surprising therefore that the inoperation of the warning devices created a situation which was
misunderstood by the riding public to mean safe passage. Jurisprudence recognizes that if warning
devices are installed in railroad crossings, the travelling public has the right to rely on such warning
devices to put them on their guard and take the necessary precautions before crossing the tracks. A
need, therefore, exists for the railroad company to use reasonable care to keep such devices in good
condition and in working order, or to give notice that they are not operating, since if such a signal is
misunderstood it is a menace. Thus, it has been held that if a railroad company maintains a
signalling device at a crossing to give warning of the approach of a train, the failure of the device to
operate is generally held to be evidence of negligence, which maybe considered with all the
circumstances of the case in determining whether the railroad company was negligent as a matter of
fact.” (Cusi v. Philippine National Railways, G.R. No. L-29889, May 31, 1979)

2. The incident involved transpired on May 10, 1931. At about 7 o‟clock in the morning of
the same day, the plaintiff Aleko, his wife Sonja Maria Lilius, and his 4-year old daughter Brita
Marianne Lilius, left Manila in their Studebaker car — driven by the said plaintiff Aleko E. Lilius
— for the municipality of Pagsanjan, Province of Laguna, on a sight-seeing trip. It was the first time
that he made said trip although he had already been to many places, driving his own car, in and
outside the Philippines. Prior thereto, he had made the trip as far as Calauan, but never from
Calauan to Pagsanjan, via Dayap. He was entirely unacquainted with the conditions of the road at
said points and had no knowledge of the existence of a railroad crossing at Dayap. Before reaching
the crossing in question, there was nothing to indicate its existence and inasmuch as there were
many houses, shrubs and trees along the road, it was impossible to see an approaching train. At
about seven or eight meters from the crossing, coming from Calauan, the plaintiff saw an autotruck
parked on the left side of the road. Several people, who seemed to have alighted from the said truck,
were walking on the opposite side. He slowed down to about 12 miles an hour and sounded his horn
for the people to get out of the way. With his attention thus occupied, he did not see the crossing but
he heard two short whistles. Immediately afterwards, he saw a huge black mass fling itself upon
him, which turned out to be locomotive No. 713 of the defendant company‟s train coming eastward
from Bay to Dayap station. The locomotive struck the plaintiffs car right in the center. After
dragging the said car a distance of about ten meters, the locomotive threw it upon a siding. The
force of the impact was so great that the plaintiffs wife and daughter were thrown from the car and
were picked up from the ground unconscious and seriously hurt. In spite of the efforts of engineer
Andres Basilio, he was unable to stop the locomotive until after it had gone about 70 meters from
the crossing. Aleko, Sonja and Brita Marianne suffered extensive injuries as a consequence of the
incident. Is the train operator liable?

A: Yes,The Court concluded that railway company was negligent ex plaining that "prior to the
accident, there had been no notice nor sign of the existence of the crossing, nor was there anybody
to warn the public of approaching trains. The flagman or switchman arrived after the collision,
coming from the station with a red flag in one hand and a green one in the other, both of which were
wound on their respec- tive sticks. The said flagman and switchman had many times absented
himself from his post at the crossing upon the arrival of a train. The train left Bay station a little late
and therefore traveled at great speed. Upon examination of the oral as well as of the documentary
evidence which the parties presented at the trial in support of their respective contentions, and after
taking into consideration all the circumstances of the case, this court is of the opinion that the
accident was due to negligence on the part of the defendant- appellant company, for not having had
on that occasion any semaphore at the crossing at Dayap, to serve as a warning to passers-by of its
existence in order that they might take the necessary precautions before crossing the railroad; and,
on the part of its employees — the flagman and switchman, for not having remained at his post at
the crossing in question to warn passersby of the approaching train; the stationmaster, for failure to
send the said flagman and switchman to his post on time; and the engineer, for not having taken the
necessary precautions to avoid an accident, in view of the absence of said flagman and switchman,
by slackening his speed and continuously ringing the bell and blowing the whistle before arriving at
the crossing. Although it is probable that the defendant-appellant entity employed the diligence of a
good father of a family in selecting its aforesaid employees, however, it did not employ such
diligence in supervising their work and the discharge of their duties because, otherwise, it would

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 have had a semaphore or sign at the crossing and, on previous occasions as well as on the night in
question, the flagman and switchman would have always been at his post at the crossing upon the
arrival of a train. The diligence of a good father of a family, which the law requires in order to avoid
damage, is not confined to the careful and prudent selection of subordinates or employees but
includes inspection of their work and supervision of the discharge of their duties.” (Lilius u. The
Manila Railroad Company, G.R. No. L-39587, March 24, 1934)

Rhonda Brunty, daughter of respondent Ethel Brunty and an American citizen, came to the
Philippines for a visit sometime in January 1980. Prior to her departure, she, together with her
Filipino host Juan Manuel M. Garcia, traveled to Baguio City on board a Mercedes Benz sedan with
plate number FU 799, driven by Rodolfo L. Mercelita. It was about 12:00 midnight, January 25,
1980. By then, PNR Train No. T-71, driven by Alfonso Reyes, was on its way to Tutuban, Metro
Manila as it had left the La Union station at 11:00 p.m., January 24, 1980. By 2:00 a.m., Rhonda
Brunty, Garcia and Mercelita were already approaching the railroad crossing at Barangay Rizal,
Moncada, Tarlac. Mercelita, driving at approximately 70 km/ hr, drove past a vehicle, unaware of
the railroad track up ahead and that they were about to collide was instantly killed when the
Mercedes Benz smashed into the train; the two other passengers suffered serious physical injuries.
A certain James Harrow brought Rhonda Brunty to the Central Luzon Doctor‟s Hospital in Tarlac,
where she was pronounced dead after ten minutes from arrival. Garcia, who had suffered severe
head injuries, was brought via ambulance to the same hospital. He was transferred to the Manila
Doctor‟s Hospital, and later to the Makati Medical Center for further treatment. Is PNR liable?

A: Yes, PNR is liable. “It was clearly established that plaintiffs-appellees (respondents herein)
sustained damage or injury as a result of the collision. That there was negligence on the part of PNR
is, likewise, beyond cavil. Considering the circumstances prevailing at the time of the fatal accident,
the alleged safety measures installed by the PNR at the railroad crossing is not only inadequate but
does not satisfy well-settled safety standards in transportation.” An examination of the photographs
of the railroad crossing at Moncada, Tarlac presented as evidence by PNR itself would yield the
following: (1) absence of flagbars or safety railroad bars; (2) inadequacy of the installed warning
signals; and (3) lack of proper lighting within the area. Thus, even if there was a flagman stationed
at the site as claimed by PNR (petitioner), it would still be impossible to know or see that there is a
railroad crossing/tracks ahead, or that there is an approaching train from the Moncada side of the
road since one‟s view would be blocked by a cockpit arena. A vehicle coming from the Moncada
side would have difficulty in knowing that there is an approaching train because of the slight curve,
more so, at an unholy hour as 2:00 a.m. Thus, it is imperative on the part of the PNR to provide
adequate safety equipment in the area. This Court has previously determined the liability of the
PNR for damages for its failure to put a cross bar, or signal light, flagman or switchman, or
semaphores. Such failure is evidence of negligence and disregard of the safety of the public, even if
there is no law or ordinance requiring it because public safety demands that said device or
equipment be installed. (Philippine National Railways v. Brunty, G.R. No. 169891, November 2,
2006; Note that the Supreme Court ruled that the liability of PNR should be mitigated because there
was contributory negligence)

(170-171)

PROBLEMS:

1. X boarded an airconditioned Pantranco Bus bound for Baguio. X was given notice that the
carrier is not liable for baggage brought in by passengers. X kept in his custody his attache case
containing $10,000.00. In Tarlac, all passengers, including X, were told to get off and take their
lunch, he discovered that his attache case was missing. A vendor said that a man picked the lock of
the door, entered the bus and ran away with the attache case. What, if any, is the liability of the
carrier?

A: The carrier may be held liable. Hand-carried luggage of passengers are governed by the rules on
necessary deposits. Under Article 2000 of the Civil Code, the responsibility of depositary shall
among other cases, include the loss of property of the guest cause by strangers but not that which
may proceed from force majeure. Article 2001 of the same Code considers an act of a thief as not
one of force majeure unless done with the use of arms or through an irresistible force. (1989)

2. X took the Benguet Bus from Baguio going to Manila. He deposited his maleta in the baggage
compartment of the bus common to all passengers. He did not declare his baggage nor pay its

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 charges contrary to the regulations of the bus company. When X got off, he could not find his
baggage, which obviously was taken by another passenger. Determine the liability of the bus
company.

A: The bus company is liable for the loss of the maleta. The carrier had the duty to exercise
extraordinary diligence over the baggage that was turned over to the carrier or placed in the
baggage compartment of the bus. The fact that the maleta was not declared nor the charges paid
thereon would not be material so long as it was received by the carrier for transportation (Article
1754, Civil Code). (1989)

3. Antonio, a paying passenger, boarded a bus bound for Batangas City. He chose to sit at the
front row near the bus driver and told the bus driver that he had valuable items in his hand carried
bag which he then placed beside the driver‟s seat. Not having slept for 24 hours, he requested the
driver to keep an eye on the bag should he doze off during the trip. While Antonio was asleep,
another passenger took the bag away and alighted at Calamba, Laguna. Could the common carrier
be held liable by Antonio for the loss?

A: Yes, the common carrier is liable to Antonio for the loss of his bag. Hand-carried luggages of
passengers are governed by the rules on necessary deposits. Under Article 2000 of the Civil Code,
the responsibility of depositary shall among other cases, include the loss of property of the guest
caused by strangers but not that which may proceed from force majeure. Article 2001 of the same
Code considers an act of a thief as not one of force majeure unless done with the use of arms or
through an irresistible force. (1986) [An alternative answer has been suggested that the carrier is
not liable because the bag of Antonio was never turned over by him to the common carrier under a
bill of lading or similar arrangement and Antonio‟s mere request to the bus driver to keep an eye on
the bag while Antonio dozed off (without even the driver acceding to the request) could not
possibly make the common carrier liable for the loss.]

CHAPTER 3

CHAPTER 4

(184)

PROBLEMS:

1. While docking his vessel, “Taurus,” the master, through negligence, damaged the wharf
and the merchandise loaded on the deck. The owner of the wharf and the owner of the damaged
merchandise sued the owner of the vessel and master of the vessel for the damage. Does the defense
of the exercise of the diligence of a good father of a family he? Reasons.

A: No with respect to the damage to the merchandise but Yes with respect to the damage to the
wharf. The defense of exercise of the diligence of a good father of a family is not available in
breach of contract but is available in quasi-delict cases. The cause of action by the owner of the
merchandize against the carrier is breach of contract. Hence, such defense is not available. The
carrier is supposed to exercise extraordinary diligence in transporting the goods and the said carrier
cannot be deemed to exercise this degree of diligence if its captain or employees were negligent.
However, the defense of due diligence in the selection and supervision of the carrier‟s employees is
available against the owner of the wharf. The cause of action against the carrier is quasi-delict and
the carrier is being sued for his vicarious liability. Hence, the defense of exercise of the diligence of
a good father of a family in the selection and supervision of his employees is available under Article
2180 of the Civil Code. (1976, See also 2002 Exam)

2. The vessel M/V Sweet Perceptions, commanded by Kapitan, its captain, was unloading
goods at a private wharf in Naval, Leyte, when the ship bumped the wharf of the pier causing it to
collapse in the sea. It turned out that Kapitan failed to drop the vessel‟s bow anchors and to fasten
the vessel properly to the pier. The vessel was pushed by the combined action of the currents in the
Biliran Island Strait and the usual southwest monsoon winds of the season. As a result, Pantalan, the
owner of the wharf, lost not only the wharf but also the goods that had just been unloaded on the
pier pending the delivery to him. Pan- talan sued both the owner of the M/V Sweet Perceptions and
Kapitan for the loss of the cargoes and the destruction of the wharf on the pier. The vessel‟s owner,
who is in Manila, states that he exercised due diligence in the selection and supervision of Kapitan.

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 Can the vessel‟s owner and Kapitan be held liable for the loss of the wharf and the cargoes?
Explain.

A: Yes, the owner may be held liable with respect to the damage to the cargoes but, no, he is not
liable with respect to the damage to the wharf. The cause of action by the owner of the cargoes
against the carrier is breach of contract. Hence, negligence is presumed the moment the goods were
damages before delivery. However, the defense of due diligence in the selection and supervision of
the carrier‟s employees is available against the owner of the wharf. If the same can be established,
the carrier is not liable. The cause of action against the carrier is quasi-delict and the carrier is being
sued for his vicarious liability. Hence, the defense of exercise of the diligence of a good father of a
family in the selection and supervision of his employees is available under Article 2180 of the Civil
Code. On the other hand, Kapitan can be held liable for the loss of the wharf and the cargoes. The
liability is based on quasi-delict because his negligent act or omission caused the damage or injury.
In fact, the action against him may even be to enforce his civil liability arising from criminal
negligence. (1986)

(200-209)

PROBLEMS AND CASES:

1. Philip Mauricio shipped a box of cigarettes to a dealer in Naga City through Bicol Bus
Company (BBC). When the bus reached Lucena City, the bus developed engine trouble. The driver
brought the bus to a repair shop in Lucena where he was informed by the mechanic that an
extensive repair was necessary, which would take at least two days. While the bus was in the repair
shop, Typhoon Coring lashed at Quezon Province. The cargoes inside the bus, including Mauricio‟s
cigarettes, got wet and were totally spoiled. Mauricio sued BBC for the damage to his cargoes.

A: TheBicol Bus Company (BBC) is liable for damages to the cargoes lost by Mauricio. While a
typhoon is a natural disaster, the same cannot be considered the only cause of the loss. The facts
indicate that the defect is foreseeable and could have been detected through the exercise of
reasonable care. In addition, carrier‟s employees should have secured the cargoes while the bus
was being repaired for two days. (1987)

2. Pasahero, a paying passenger, boarded a Victory Liner bus bound for Olongapo. He chose
a seat at the front near the bus driver. Pasahero told the bus driver that he had valuable items in his
bag which was placed near his feet. Since he had not slept for 24 hours, he requested the driver to
keep an eye on the bag should he doze off during the trip. a) There have been incidents of unknown
persons throwing stones at passing vehicles from the overpasses in the North Expressway. While the
bus was traversing the superhighway, a stone hurled from the Sto. Domingo overpass smashed the
front windshield and hit Pasahero in the face. Pasahero lost an eye and suffered other injuries. Can
Pasahero hold the bus liable for damages? Explain. b) Supposing that two armed men staged a hold-
up while the bus was speeding along the North Expressway. One of them pointed a gun at Pasahero
and stole not only his bag, but his wallet as well. Is Victory Liner liable to Pasahero? Explain.

A: a) Pasahero can hold the bus company liable. The company failed to exercise utmost diligence in
securing the safety of the passengers. Stone throwing was foreseeable because of prior incidents of
stone throwing. Hence, the bus company should have employed adequate precautionary measures
for its passengers.

b) Pasahero may not hold the carrier liable. Hand carried luggage are governed by the rules on
necessary deposit. Under Article 2001 of the Civil Code, an act of a thief is not considered force
majeure unless done with the use of arms or through an irresistible force. There was use of arms in
the given problem, hence, Pasahero may not hold Victory Liner liable. (1986)

3. Mariter, a paying passenger, was hit above her left eye by a stone hurled at the bus by an
unidentified bystander as the bus was speeding through the National Highway. The bus owner‟s
personnel lost no time in bringing Mariter to the provincial hospital where she was confined and
treated. Mariter wants to sue the bus company for damages and seeks your advice whether she can
legally hold the bus company liable. What will you advise her?

A: I will advise Mariter that she cannot legally hold the bus company liable if the stone throwing
was entirely unforeseeable and the carrier exercised utmost diligence. However, I will also inform

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 her that the burden is on the carrier to prove such exercise of due diligence. If she decides to file a
case in court, all that she will prove is that she was a passenger and she was injured while on board
the bus. (1994)

4. M. Dizon Trucking (Dizon) entered into a hauling contract with Fairgoods Corporation
(FAIRGOODS) whereby the former bound itself to haul the latter’s 2,000 sacks of soya bean meal
from Manila Port Area to Calamba, Laguna. To carry out faithfully its obligation DIZON
subcontracted with Enrcio Reyes the delivery of 400 sacks of the soya bean meal. Aside from the
driver, three male employees of Reyes rode the truck with the cargo. While the truck was on its way
to Laguna two strangers suddenly stopped the truck and hijacked the cargo. Investigation by the
police disclosed that one of the hijackers was armed with a bladed weapon while the other was
unarmed. For failure to deliver the 400 sacks, FAIRGOODS sued Dizon for damages. Dizon in turn
set up a third-party complaint against Reyes which the latter resisted on the ground that the loss was
due to force majeure. Did the hijacking constitute force majeure to exculpate Reyes from the
liability to Dizon? Discuss fully.

A: No, the hijacking cannot exculpate Reyes from liability. The hijacking in this case cannot be
considered a force majeure and it does not appear that the four male employees of Reyes were
overwhelmed by irresistible force. There were only two hijackers, with only one of them being
armed with a bladed weapon. (1995)

5. AM Trucking, a small company, operates two trucks for hire on selective basis. It caters to
only a few customers, and its trucks do not make regular or scheduled trips. It does not even have a
certificate of public convenience. On one occasion, Reynaldo contracted AM to transport, for a fee,
100 sacks of rice from Manila to Tarlac. However, AM failed to deliver the cargo because its truck
was hijacked when the driver stopped in Bulacan to visit his girlfriend. May AM set up the
hijacking as a defense to defeat Reynaldo’s claim?

A: No, AM Trucking may not set up the hijacking as a defense to defeat Reynaldo‟s claim. A
common carrier is presumed to be negligent and it is up to said carrier to prove the exercise of
extraordinary diligence. It also does not appear that the hijacking was attended by grave or
irresistible threat, violence, or force. The facts indicate that the truck was left unattended while he
was visiting his girlfriend. (1996)

6. Alejandro Camalig of Alegria, Cebu, is engaged in buying copra, charcoal, firewood and
used bottles and in reselling them in Cebu City. He uses two big ISUZU Trucks for the purpose;
however he has no certificate of public convenience or franchise to do business as a carrier. On the
return trip to Alegria, he loads his trucks with various merchandise of other merchants in Alegria
and the neighboring municipalities of BAD IAN and GINATILAN. While passing the zigzag road
between CARCAR and BARILI, Cebu which is midway between Cebu City and Alegria, the truck
was hijacked by three armed men who took all the boxes of sardines and kidnapped the driver and
his helper, releasing them in Cebu City only two (2) days later. Pedro Rabor sought to recover from
Alegria the value of the sardines. The latter contends that he is not liable therefor because [of the]
occurrence of the loss was due to a cause beyond his control. If you were the judge, would you
sustain the contention of Alejandro?

A: If I were the judge, I would sustain the contention of Alejandro that he is not liable for the loss of
the goods provided that he can prove that he exercised extraordinary diligence. The hijacking by
three armed men of the truck used by Alejandro is one of the causes which is beyond the control of
the carrier. Thus, if the carrier can prove that the hijacking was not foreseeable, the carrier may be
adjudged free from liability. (De Guzman v. CA, G.R. No. 47822, December 27, 1988)

7. On March 1, 1987, San Miguel Corporation insured several beer bottle cases with an
aggregate value of P5,836,222.80 with petitioner Philippine American General Insurance Company.
The cargo was loaded on board the MTV Peatheray Patrick-G to be transported from Mandaue City
to Bislig, Surigao del Sur. After having been cleared by the Coast Guard Station in Cebu the
previous day, the vessel left the port of Mandaue City for Bislig, Surigao del Sur on March 2, 1987.
The weather was calm when the vessel started its voyage. The following day, March 3, 1987, M/V
Peatheray Patrick-G listed and subsequently sunk off Cawit Point, Cortes, Surigao del Sur. As a
consequence thereof, the cargo belonging to San Miguel Corporation was lost. Subsequently, San
Miguel Corporation claimed the amount of its loss from petitioner. Upon petitioner’s request, on

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 March 18, 1987, Mr. Eduardo Sayo, a surveyor from the Manila Adjusters and Surveyors Co., went
to Taganauan Island, Cortes, Surigao del Sur where the vessel was cast ashore, to investigate the
circumstances surrounding the loss of the cargo. In his report, Mr. Sayo stated that the vessel was
structurally sound and that he did not see any damage or crack thereon. He concluded that the
proximate cause of the listing and subsequent sinking of the vessel was the shifting of ballast water
from starboard to portside. The said shifting of ballast water allegedly affected the stability of the
MTV Peatheray Patrick-G. Thereafter, petitioner paid San Miguel Corporation the full amount of
P5,836,222.80 pursuant to the terms of their insurance contract. PMGIC thereafter filed a claim
against the carrier as subrogee of SMC. Is the carrier liable?

No, the carrier is not liable. MTV Peatheray Patrick-G, the vessel that sunk, encountered strong
winds and huge waves ranging from six to ten feet in height. The vessel listed at the port side and
eventually sunk at Cawit Point, Cortes, Surigao del Sur. It was adequately shown that before the
M/V Peatheray Patrick-G left the port of Mandaue City, the Captain confirmed with the Coast
Guard that the weather condition would permit the safe travel of the vessel to Bislig, Surigao del
Sur. Thus, he could not be expected to have foreseen the unfavorable weather condition that awaited
the vessel in Cortes, Surigao del Sur. It was the presence of the strong winds and enormous waves
which caused the vessel to list, keel over, and consequently lose the cargo contained therein. That
the vessel was granted SOLAS clearance by the Philippine Coast Guard on March 1, 1987 to depart
from Mandawe City for Bislig, Surigao del Sur as evidenced by a certification issued to D.C.
Gaerlan Oil Products by Coast Guard Station Cebu dated December 23, 1987.

8. Petitioner-plaintiff Jose Pilapil, a paying passenger, boarded respondent- defendant‟s bus

bearing No. 409 at San Nicolas, Iriga City on 16 September 1971 at about 6:00 P.M. While said bus
No. 409 was in due course negotiating the distance between Iriga City and Naga City, upon
reaching the vicinity of the cemetery of the Municipality of Baao, Camarines Sur, on the way to
Naga City, an unidentified man, a bystander along said national highway, hurled a stone at the left
side of the bus, which hit petitioner above his left eye. Petitioner lost partially his left eye‟s vision
and sustained a permanent scar above the left eye. Was the carrier able to rebut the presumption of
negligence imposed on common carriers?

A: Yes, contrary facts were established by the carrier proving either that the carrier had exercised
the degree of diligence required by law or the injury suffered by the passenger was due to a
fortuitous event. In the instant case, the injury sustained by the petitioner was in no way due to any
defect in the means of transport or in the method of transporting or to the negligent or willful acts of
private respondent’s employees, and therefore involving no issue of negligence in its duty to
provide safe and suitable cars as well as competent employees, with the injury arising wholly from
causes created by strangers over which the carrier had no control or even knowledge or could not
have prevented, the presumption is rebutted and the carrier is not and ought not to be held liable. To
rule otherwise would make the common carrier the insurer of the absolute safety of its passengers
which is not the intention of the lawmakers. Clearly under the above provision, a tort committed by
a stranger who causes injury to a passenger does not accord the latter a cause of action against the
carrier. The negligence for which a common carrier is held responsible is the negligent omission by
the carrier’s employees to prevent the tort from being committed when the same could have been
foreseen and prevented by them. Further, under the same provision, it is to be noted that when the
violation of the contract is due to the willful acts of strangers, as in the instant case, the degree of
care essential to be exercised by the common carrier for the protection of its passenger is only that
of a good father of a family. Although the suggested precaution could have prevented the injury
complained of, the rule of ordinary care and prudence is not so exacting as to require one charged
with its exercise to take doubtful or unreasonable precautions to guard against unlawful acts of
strangers. The carrier is not charged with the duty of providing or maintaining vehicles as to
absolutely prevent any and all injuries to passengers. Where the carrier uses cars of the most
approved type, in general use by others engaged in the same occupation, and exercises a high
degree of care in maintaining them in suitable condition, the carrier cannot be charged with
negligence in this respect. Finally, petitioner contends that it is to the greater interest of the State if a
carrier is made liable for such stone-throwing incidents rather than have the bus riding public lose
confidence in the transportation system. Sad to say, we are not in a position to so hold; such a policy
would be better left to the consideration of Congress which is empowered to enact laws to protect
the public from the increasing risks and dangers of lawlessness in society. (Pilapil v. Court of
Appeals, G.R. No. 52159, December 22, 1989)

9.On November 18, 1989, a bus of petitioner figured in an accident with a jeepney in
Kauswagan, Lanao del Norte, resulting in the death of several passengers of the jeepney, including

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 two Maranaos. Crisanto Generalao, a volunteer field agent of the Constabulary Regional Security
Unit No. X, conducted an investigation of the accident. The owner of the jeepney was a Maranao
residing in Delabayan, Lanao del Norte and certain Maranaos were planning to take revenge on the
petitioner by burning some of its buses. Generalao rendered a report on his findings to Sgt.
Reynaldo Bastasa of the Philippine Constabulary Regional Headquarters at Cagayan de Oro. Upon
the instruction of Sgt. Bastasa, he went to see Diosdado Bravo, operations manager of petitioner, its
main office in Cagayan de Oro City. Bravo assured him that the necessary precautions to insure the
safety of lives and property would be taken. At about 6:45 P.M. on November 22, 1989, three armed
Maranaos who pretended to be passengers, seized a bus of petitioner at Linamon, Lanao del Norte
while on its way to Iligan City. Among the passengers of the bus was Atty. Caorong. The leader of
the Maranaos, identified as one Bashier Mananggolo, ordered the driver, Godofredo Cabatuan, to
stop the bus on the side of the highway. Mananggolo then shot Cabatuan on the arm, which caused
him to slump on the steering wheel. One of the companions of Mananggolo started pouring gasoline
inside the bus, as the other held the passengers at bay with a handgun. Mananggolo then ordered the
passengers to get off the bus. The passengers, including Atty. Caorong, stepped out of the bus and
went behind the bushes in a field some distance from the highway. However, Atty. Caorong
returned to the bus to retrieve something from the overhead rack. At that time, one of the armed
men was pouring gasoline on the head of the driver. Cabatuan, who had meantime regained
consciousness, heard Atty. Caorong pleading with the armed men to spare the driver as he was
innocent of any wrong doing and was only trying to make a living. The armed men were, however,
adamant as they repeated the warning that they were going to burn the bus along with its driver.
During this exchange between Atty. Caorong and the assailants, Cabatuan climbed out of the left
window of the bus and crawled to the canal on the opposite side of the highway. He heard shots
from inside the bus. Larry de la Cruz, one of the passengers, saw that Atty. Caorong was hit. Then
the bus was set on fire. Some of the passengers were able to pull Atty. Caorong out of the burning
bus and rush him to the Mercy Community Hospital in Iligan City, but he died while undergoing
operation. a. Is the carrier liable? b. Was there contributory negligence on the part of the injured
party?

(a) Yes, the carrier is liable. Despite warning by the Philippine Constabulary at Cagayan de Oro
that the Maranaos were planning to take revenge on the petitioner by burning some of its buses and
the assurance of petitioner’s operation manager, Diosdado Bravo, that the necessary precautions
would be taken, petitioner did nothing to protect the safety of its passengers. Had petitioner and its
employees been vigilant they would not have failed to see that the malefactors had a large quantity
of gasoline with them. Under the circumstances, simple precautionary measures to protect the safety
of passengers, such as frisking passengers and inspecting their baggages, preferably with non-
intrusive gadgets such as metal detectors, before allowing them on board could have been employed
without violating the passenger’s constitutional rights.

(b) No, Atty. Caorong was not guilty of contributory negligence in returning to the bus to retrieve
his property. It should be pointed out that the intended targets of the violence were petitioners and
its employees, not its passengers. The assailant‟s motive was to retaliate for the loss of life of two
Maranaos as a result of the collision between petitioner‟s bus and the jeepney in which the two
Maranaos were riding. Mananggolo, the leader of the group which had hijacked the bus, ordered the
passengers to get off the bus as they intended to burn it and its driver. The armed men actually
allowed Atty. Caorong to retrieve something from the bus. What apparently angered them was his
attempt to help the driver of the bus by pleading for his life. He was playing the role of the good
Samaritan. Certainly, this act cannot be considered an act of negligence, let alone recklessness.
(Fortune Express, Inc. v. Court of Appeals, G.R. No. 119756, March 18, 1999)

10. On February 27, 1918, the defendant was engaged in the business of carrying passengers
for hire from one point to another in the Province of La Union and the surrounding provinces. On
the date mentioned, he undertook to convey plaintiff from San Fernando to Currimao, Ilocos Norte,
in a Ford automobile. On leaving San Fernando, the automobile was operated by a licensed
chauffeur, but after having reached the town of San Juan, the chauffeur allowed his assistant,
Remigio Bueno, to drive the car. Bueno held to driver‟s license, but had some experience in
driving, and with the exception - of some slight engine trouble while passing through the town of
Luna, the car functioned well until after the crossing of the Abra River in Tagudin, when, according
to the testimony of witnesses for the plaintiffs, defects developed in the steering gear so as to make
accurate steering impossible, and after zigzagging for a distance of about half a kilometer, the car
left the road and went down a steep embankment. Was there a fortuitous event?

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 A: No. There was no fortuitous even. Some extraordinary circumstance independent of the will of
the obligor, or of his employees, is an essential element of a caso fortuito. This element is lacking in
this case. It is not suggested that the accident in question was due to an act of God or to adverse
road conditions which could not have been foreseen. As far as the record shows, the accident was
caused either by defects in the automobile or else through the negligence of its driver. That is not a
caso fortuito. Neither under the American nor Spanish law is a carrier of passengers an absolute
insurer against the risks of travel from which the passenger may protect himself by exercising
ordinary care and diligence. The case of Alba v. Sociedad Anonima de Tranvias, Jurisprudencia
Civil, vol. 102, p. 928 affords a good illustration of the application of this principle. In that case,
Alba, a passenger on a street car, was standing on the platform of the car while it was in motion.
The car rounded a curve causing Alba to lose his balance and fall off the platform, sustaining severe
injuries. In an action brought by him to recover damages, the supreme court of Spain held that
inasmuch as the car at the time of the accident was travelling at a moderate rate of speed and there
was no infraction of the regulations, and the plaintiff was exposed to no greater danger than that
inherent in that particular mode of travel, the plaintiff could not recover, especially so since he
should have been on his guard against a contingency as natural as that of losing his balance to a
greater or less extent when the car rounded the curve. But such is not the present case; here the
passengers had no means of avoiding the danger or escaping the injury. (Lasam, et al. v. Smith, Jr.,
G.R. No. 19495, February 2, 1924)

11. Plaintiffs Franklin G. Gacal and his wife, Corazon M. Gacal; Bonifacio S. Anislag and
his wife, Mansueta L. Anislag; and the late Elma de Guzman, were then passengers boarding
defendant‟s BAC 111 at Davao Airport for a flight to Manila, not knowing that on the same flight,
Macalinog, Taurac Pendatum known as Commander Zapata, Nasser Omar, Liling Pusuan Radia,
Dimantong Dimarosing and Mike Randa, all of Marawi City and members of the Moro National
Liberation Front (MNLF), were their co-passengers, three armed with grenades, two with .45
caliber pistols, and one with a .22 caliber pistol. Ten minutes after take off at about 2:30 in the
afternoon, the hijackers brandishing their respective firearms announced the hijacking of the aircraft
and directed its pilot to fly to Libya. With the pilot explaining to them especially to its leader,
Commander Zapata, of the inherent fuel limitations of the plane and that they are not rated for
international flights, the hijackers directed the pilot to fly to Sabah. With the same explanation, they
relented and directed the aircraft to land at Zamboanga Airport, Zamboanga City for refueling. The
aircraft landed at 3:00 o‟clock in the afternoon of May 21, 1976 at Zamboanga Airport. When the
plane began to taxi at the runway, it was met by two armored cars of the military with machine guns
pointed at the plane, and it stopped there. The rebels through its commander demanded that a DC-
aircraft take them to Libya with the President of the defendant company as hostage and that they be
given $375,000 and six armalites, otherwise they will blow up the plane if their demands will not be
met by the government and Philippine Air Lines. Meanwhile, the passengers were not served any
food nor water and it was only on May 23, a Sunday, at about 1:00 o’clock in the afternoon that
they were served 1/4 slice of a sandwich and 1/10 cup of PAL water. After that, relatives of the
hijackers were allowed to board the plane but immediately after they alighted therefrom, an armored
car bumped the stairs. That commenced the battle between the military and the hijackers which led
ultimately to the liberation of the surviving crew and the passengers, with the final score of ten
passengers and three hijackers dead on the spot and three hijackers captured. Frank Gacal was
unhurt. Mrs. Corazon M. Gacal suffered injuries in the course of her jumping out of the plane when
it was peppered with bullets by the army and after two hand grenades exploded inside the plane.
She was hospitalized at General Santos Doctors Hospital, General Santos City, for two days,
spending P245.60 for hospital and medical expenses, Assistant City Fiscal Bonifacio S. Anisiag
also escaped unhurt but Mrs. Anislag suffered a fracture at the radial bone of her left elbow for
which she was hospitalized and operated on at the San Pedro Hospital, Davao City, and therefore, at
Davao Regional Hospital, Davao City, spending P4,500.00. Elma de Guzman died because of that
battle. Was the hijacking or air piracy during martial law and under the circumstances obtaining in
his case a caso fortuito or force majeure which would exempt an aircraft from payment of damages
to its passengers whose lives were put in jeopardy and whose personal belongings were lost during
the incident?

Yes. There was force majeure. The failure to transport petitioners safely from Davao to Manila was
due to the skyjacking incident staged by six passengers of the same plane, all members of the Moro
National Liberation Front (MNLF), without any connection with private respondent, hence,
independent of the will of either the PAL or of its passengers. Under normal circumstances, PAL
might have foreseen the skyjacking incident which could have been avoided had there been a more
thorough frisking of passengers and inspection of baggages as authorized by R.A. 6235. But the

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 incident in question occurred during Martial Law where there was a military take-over of airport
security including the frisking of passengers and the inspection of their luggage preparatory to
boarding domestic and international flights. Otherwise stated, these events rendered it impossible
for PAL to perform its obligations in a normal manner and obviously it cannot be faulted with
negligence in the performance of duty taken over by the Armed Forces of the Philippines to the
exclusion of the former. (Gacal, et al. v. Philippine Airlines, Inc., G.R. No. 55300, March 15, 1990,
183 SCRA 189)

(214-215)

PROBLEMS:

1. Archipelago Lines, Inc., a carrier, accepted for shipment from Iloilo to Manila a cargo
consisting of 800 sacks of rice, knowing that some sacks had big holes and others had their
openings just loosely tied with strings. Due to the spillage of the rice during the trip, there was a
shortage in the rice delivered by the carrier to the consignee. When sued, Archipelago Lines, Inc.
interposed the defense that the carrier was not liable for the shortage because the spillage was due to
the defective condition of the sacks. As a judge, how would you rule on the liability of the carrier?

A: I would rule that the carrier is liable for the shortage of the rice delivered to the consignee. The
carrier must still exercise extraordinary diligence if the fact of improper packing is known to the
carrier or its servants, or apparent upon ordinary observation. Under Article 1742 of the Civil Code,
even if the loss, destruction, or deterioration of the goods should be caused by the character of the
goods, or the faulty nature of the packing or of the containers, the common carrier must exercise
due diligence to forestall or lessen the loss. It does not appear that the carrier exercised due
diligence in forestalling or lessening the loss.

3. Because of the spillage of the rice during the trip from Davao to Manila due to the bad
condition of the sacks, there was a shortage in the rice delivered by the Provident Lines, Inc. to the
consignee XYZ Import and Export Corporation. The carrier accepted the shipment, knowing that
some of the sacks had holes and some had broken strings. When sued, Provident Lines, Inc. alleged
that the loss was caused by the spillage of the rice on account of the defective condition of the
sacks, at the time it received the shipment, and therefore, it cannot be held liable. Decide. Give
reasons.

A: Provident Lines Inc. is liable. Article 1742 provides that where the fact of improper packing is
known to the carrier or its servants, or apparent upon ordinary observation, but the carrier accepts
the goods notwithstanding such condition, it is not relieved of liability for loss or injury resulting
therefrom. The carrier must exercise due diligence in forestalling or lessening the loss. (1978)

4. Is a maritime carrier liable for the loss of several sacks of rice due to improper packing and
the holes in many bags which appear apparent upon ordinary observation at the time of the
acceptance of the shipment by the carrier? Reason.

A: Yes. It is well-settled that if the fact of improper packing is known to the carrier or apparent upon
ordinary observation but it accepts the goods notwithstanding such condition, the common carrier is
not relieved of liability for loss or injury resulting therefrom. The carrier must exercise due
diligence in forestalling or lessening the loss. (Article 1742, new Civil Code; Southern Lines, Inc. v.
Court of Appeals, 45 SCRA 259)

(216-218)

CASE:

1. On November 28, 1956, Gelacio Tumambing contracted the services of Mauro B. Ganzon
to haul 305 tons of scrap iron from Mariveles, Bataan, to the port of Manila on board the lighter
LCT “Batman.” Pursuant. to this agreement, Mauro B. Ganzon sent his lighter “Batman” to
Mariveles where it docked in three feet of water. On December 1, 1956, Gelacio Tumambing
delivered the scrap iron to defendant Filomeno Niza, captain of the lighter, for loading which was
actually begun on the same date by the crew of the lighter under the captain‟s supervision. When
about half of the scrap iron was already loaded, Mayor Jose Advincula of Mariveles, Bataan,
arrived and demanded P5,000.00 from Gelacio Tumambing. The latter resisted the shakedown and

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 after a heated argument between them, Mayor Jose Advincula drew his gun and fired at Gelacio
Tumambing. The gunshot was not fatal but Tumambing had to be taken to a hospital in Balanga,
Bataan, for treatment. After sometime, the loading of the scrap iron was resumed. But on December
4, 1956, Acting Mayor Basilio Rub, accompanied by three policemen, ordered captain Filomeno
Niza and his crew to dump the scrap iron where the lighter was docked. The rest was brought to the
compound of NASSCO. Later on Acting Mayor Rub issued a receipt stating that the Municipality
of Mariveles had taken custody of the scrap iron. Petitioner maintains that he is exempt from any
liability because the loss of the scraps was due mainly to the intervention of the municipal officials
of Mariveles which constitutes a caso fortuito as defined in Article 1174 of the Civil Code. Is the
position of the petitioner tenable?

The position of the petitioner is not tenable. There was no caso for tuito. Before the appellee
Ganzon could be absolved from responsibility on the ground that he was ordered by competent
public authority to unload the scrap iron, it must be shown that Acting Mayor Basilio Rub had the
power to issue the disputed order, or that it was lawful, or that it was issued under legal process of
authority. The appellee failed to establish this. Indeed, no authority or power of the acting mayor to
issue such an order was given in evidence. Neither has it been shown that the cargo of scrap iron
belonged to the Municipality of Mariveles. What we have in the record is the stipulation of the
parties that the cargo of scrap iron was accumulated by the appellant through separate purchases
here and there from private individuals (Record on Appeal, pp. 38- 39). The fact remains that the
order given by the acting mayor to dump the scrap iron into the sea was part of the pressure applied
by Mayor Jose Advincula to shakedown the appellant for P5,000.00. The order of the acting mayor
did not constitute valid authority for appellee Mauro Ganzon and his representatives to carry out.

Now the petitioner is changing his theory to caso fortuito. Such a change of theory on appeal we
cannot, however, allow. In any case, the intervention of the municipal officials was not of a
character that would render impossible the fulfillment by the carrier of its obligation. The petitioner
was not duty bound to obey the illegal order to dump into the sea the scrap iron. Moreover, there is
absence of sufficient proof that the issuance of the same order was attended with such force or
intimidation as to completely overpower the will of the petitioner‟s employees. The mere difficulty
in the fulfillment of the obligation is not considered force majeure. We agree with the private
respondent that the scraps could have been properly unloaded at the shore or at the NASSCO
compound, so that after the dispute with the local officials concerned was settled, the scraps could
then be delivered in accordance with the contract of carriage.

There is no incompatibility between the Civil Code provisions on common carriers and Articles
361(8) and 362(9) of the Code of Commerce which were the basis for this Court‟s ruling in
Government of the Philippine Islands vs. Ynchausti & Co. and which the petitioner invokes in this
petition. For Article 1735 of the Civil Code, conversely stated, means that the shipper will suffer the
losses and deterioration arising from the causes enumerated in Article 1734; and in these instances,
the burden of proving that damages were caused by the fault or negligence of the carrier rests upon
him. However, the carrier must first establish that the loss or deterioration was occasioned by one of
the excepted causes or was due to an unforeseen event or to force majeure. Be that as it may, insofar
as Article 362 appears to require of the carrier only ordinary diligence, the same is deemed to have
been modified by Article 1733 of the Civil Code. (Ganzon v. Court of Appeals, et al., G.R. No. L-
48757, May 30, 1988) destruction of the goods was done under legal process or authority so that
petitioner should be freed from responsibility.)

(Note the dissenting opinion of Justice Melencio-Herrera which states: The loading of the
scrap iron on the lighter had to be suspended because of Municipal Mayor Jose Advincula‟s
intervention, who was a “competent public authority.” Petitioner had no control over the
situation as, in fact, Tumambing himself, the owner of the cargo, was impotent to stop the
“act” of said official and even suffered a gunshot wound on the occasion. When loading was
resumed, this time it was Acting Mayor Basilio Rub, accompanied by three policemen, who
ordered the dumping of the scrap iron into the sea right where the lighter was docked in three
feet of water. Again, could the captain of the lighter and his crew have defied said order?
Through the “order” or “act” of “competent public authority,” therefore, the performance of a
contractual obligation was rendered impossible. The scrap iron that was dumped into the sea
was “de- stroyed” while the rest of the cargo was “seized.” The seizure is evi- denced by the
receipt issued by Acting Mayor Rub stating that the Municipality of Mariveles had taken
custody of the scrap iron. Ap- parently, therefore, the seizure and destruction of the goods was
done under legal process or authority so that petitioner should be freed from responsibility.)

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 (223-237)

CASES:

1. Rogelio Corachea, on October 18, 1960, was a passenger in a taxicab owned and operated
by Pascual Perez when he was stabbed and killed by the driver, Simeon Valenzuela. Is Pascual
Perez, the operator, liable?

A: Yes ,the operator is liable. The killing was perpetrated by the driver of the very cab transporting
the passenger, in whose hands the carrier had entrusted the duty of executing the contract of
carriage. In other words, the killing of the passenger here took place in the course of duty of the
guilty employee and when the employee was acting within the scope of his duties. Article 1759
expressly makes the common carrier liable for intentional assaults committed by its employees
upon its passengers. (Antonia Marana v. Pascual Perez, et al., G.R. No. L-22272, June 26, 1967)

2. At about 7:30 A.M., in the morning of April 1, 1946, Lieut. Tomas Gillaco, husband of the
plaintiff, was a passenger in the early morning train of the Manila Railroad Company (MRC) from
Calamba, Laguna to Manila. When the train reached the Paco Railroad station, Emilio Devesa, a
train guard of the MRC assigned in the Manila-San Fernando, La Union Line, happened to be in
said station waiting for the same train which would take him to Tutuban Station, where he was
going to report for duty. Devesa‟s tour of duty on that day was from 9:00 A.M., until the train to
which he was assigned reached La Union at 7:00 P.M. of the same day. Emilio Devesa had a long
standing personal grudge against Tomas Gillaco, the same dating back during the Japanese
occupation. Because of this personal grudge, Devesa shot Gillaco with the carbine furnished to him
by the MRC for his use as such train guard, upon seeing him inside the train coach. Tomas Gillaco
died as a result of the wound which he sustained from the shot fired by Devesa. Devesa was
convicted of homicide by final judgment of the Court of Appeals. Is MRC liable?

A: ManilaRailroad Company is not liable. The act of guard Devesa in shooting passenger Gillaco
(because of a personal grudge nurtured against the latter since the Japanese occupation) was entirely
unforeseeable by the Manila Railroad Co. The latter had no means to ascertain or anticipate that the
two would not meet, nor could it reasonably foresee every personal rancor that might exist between
each one of its many employees and any one of the thousands of eventual passengers riding in its
trains. The shooting in question was therefore “caso fortuito” within the definition of Article 1105
of the old Civil Code, being both unforeseeable and inevitable under the given circumstances; and
pursuant to established doctrine, the resulting breach of appellant's contract of safe carriage with the
late Tomas Gillaco was excused thereby.

No doubt that a common carrier is held to a very high degree of care and diligence in the protection
of its passengers; but, considering the vast and complex activities of modern rail transportation, to
require of appellant that it should guard against all possible misunderstanding between each and
every one of its employees and every passenger that might chance to ride in its conveyances at any
time, strikes us as demanding diligence beyond what human care and foresight can provide.

3. On August 1, 1980, Bus No. 800 owned by Bachelor Express, Inc. and driven by Cresencio
Rivera was the situs of a stampede which resulted in the death of passengers Ornominio Beter and
Narcisa Rautraut. The bus came from Davao City on its way to Cagayan de Oro City passing
Butuan City; that while at Tabon-Tabon, Butuan City, the bus picked up a passenger; that about
fifteen minutes later, a passenger at the rear portion suddenly stabbed a PC soldier which caused
commotion and panic among the passengers; that when the bus stopped, passengers Ornominio
Beter and Narcisa Rautraut were found lying down the road, the former already dead as a result of
head injuries and the latter also suffering from severe injuries which caused her death later. The
passenger-assailant alighted from the bus and ran toward the bushes but was killed by the police.
Thereafter, the heirs of Ornomino Beter and Narcisa Rautraut, private respondents herein (Ricardo
Beter and Sergia Beter are the parents of Ornominio while Teofilo Rautraut and Zoetera [should be
Zotera] Rautraut are the parents of Narcisa) filed a complaint for “sum of money” against Bachelor
Express, Inc., its alleged owner Samson Yasay, and the driver Rivera. In their answer, the petitioners
denied liability for the death of Ornominio Beter and Narcisa Rautraut. They alleged that “. . . the
driver was able to transport his passengers safely to their respective places of destination except
Ornominio Beter and Narcisa Rautraut who jumped off the bus without the knowledge and consent,
much less, the fault of the driver and conductor and the defendants in this case; the defendant
corporation had exercised due diligence in the choice of its employees to avoid as much as possible

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 accidents; the incident on August 1, 1980 was not a traffic accident or vehicular accident, it was an
incident or event very much beyond the control of the defendants; defendants were not parties to the
incident complained of as it was an act of a third party who is not in any wayconnected with the
defendants and of which the latter have no control and supervision;...” . a) What was the proximate
cause of the loss? b) Can the common carrier validly invoke caso fortuito?

A: (a) The running amuck of the passenger was the proximate cause of the incident as it triggered
off a commotion and panic among the passengers such that the passengers started running to the
sole exit shoving each other resulting in the falling off the bus by passengers Beter and Rautraut
causing them fatal injuries. The sudden act of the passenger who stabbed another passenger in the
bus is within the context of force majeure. However, in order that a common carrier may be
absolved from liability in case of force majeure, it is not enough that the accident was caused by
force majeure. The common carrier must still prove that it was not negligent in causing the injuries
resulting from such accident. The circumstances show that the petitioner common carrier was
negligent in the provision of safety precautions so that its passengers may be transported safely to
their destinations. The petitioners have failed to overcome the presumption of fault and negligence
found in the law governing common carriers. The bus driver did not immediately stop the bus at the
height of the commotion; the bus was speeding from a full stop; the victims fell from the bus door
when it was opened or gave way while the bus was still running; the conductor panicked and blew
his whistle after people had already fallen off the bus; and the bus was not properly equipped with
doors in accordance with law. The petitioners‟ argument that the petitioners “are not insurers of
their passengers” deserves no merit in view of the failure of the petitioners to prove that the deaths
of the two passengers were exclusively due to force majeure and not to the failure of the petitioners
to observe extraordinary diligence in transporting safely the passengers to their destinations as
warranted by law. (See Batangas Laguna Tayabas Co. v. Intermediate Appellate Court, supra).
(Bachelor Express, Inc. and Cresencio Rivera v. The Hon. Court of Appeals, G.R. No. 85691, July
31, 1990)

(231-239)

PROBLEMS AND CASES:

1. A and his classmates take a bus from U.P. to Quiapo. On the way, another Quiapo bound
bus tries to overtake them. A and his classmates dare the bus driver to run faster and race with the
other bus. The driver takes their dare, to the delight of A and his friends who cheered him. On
rounding the curve, the bus driver fails to slow down and the bus turns turtle, resulting in the death
of A and in injuries to the other passengers. The bus carried the following sign: “Do not talk to the
driver while the bus is in motion, otherwise the company will not assume liability for any accident.”
Explain briefly the extent of the liability, if any of the bus company, giving the legal provisions and
principles involved.

A: The bus company is liable for damages to A‟s heirs and to all the injured passengers. The bus
company is obligated to exercise utmost diligence in carrying its passengers. This liability cannot be
eliminated or limited by stipulation or by posting notices (Article 1757, Civil Code). It is believed
that A cannot be said to have assumed the risk of being injured when he urged the driver to accept
the dare. Extraordinary diligence is still required of the carrier. At most, A can only be said to be
guilty of contributory negligence which can only mitigate the amount of damages, since the
approximate cause of the accident was the driver’s willful and reckless act in running the race with
the other bus. (1982)

2. AL. Ammen Transportation Co., Inc. (AATCI) is a corporation engaged in the business of
transporting passengers by land for compensation in the Bicol provinces and one of the lines it
operates is the one connecting Legaspi City, Albay with Naga City, Camarines Sur. One of the buses
which defendant was operating is Bus No. 31. On May 31, 1951, plaintiff boarded said bus as a
passenger paying the required fare from Ligao, Albay bound for Pili, Camarines Sur, but before
reaching his destination, the bus collided with a motor vehicle of the pick-up type coming from the
opposite direction, as a result of which plaintiffs left arm was completely severed and the severed
por- tion fell inside the bus. In the case initiated by the plaintiff, AATCI set up as special defense
that the injury suffered by plaintiff was due entirely to the fault or negligence of the driver of the
pick-up car which collided with the bus driven by its driver and to the contributory negligence of
plaintiff himself. AATCI further claims that the accident which resulted in the injury of plaintiff is
one which defendant could not foresee or, though foreseen, was inevitable. a) Did the defendant

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 observe extraordinary diligence or the utmost diligence of every cautious person, having due regard
for all circumstances, in avoiding the collision which resulted in the injury caused to the plaintiff?
b) What was the proximate cause of the injury?

A: (a)Yes,thedefendant exercised extraordinary diligence. It appears that Bus No. 31, immediately
prior to the collision, was running at a moderate speed because it had just stopped at the school zone
of Matacong, Polangui, Albay. The pick-up car was at full speed and was running outside of its
proper lane. The driver of the bus, upon seeing the manner in which the pick-up was then running,
swerved the bus to the very extreme right of the road until its front and rear wheels have gone over
the pile of stones or gravel situated on the rampart of the road. Said driver could not move the bus
farther right and run over a greater portion of the pile, the peak of which was about three feet high,
without endangering the safety of his passengers. And notwithstanding all these efforts, the rear left
side of the bus was hit by the pick-up car. This is also a matter of appreciation of the situation on the
part of the driver. While the position taken by appellant appeals more to the sense of caution that
one should observe in a given situation to avoid an accident or mishap, such however cannot always
be expected from one who is placed suddenly in a predicament where he is not given enough time
to take the proper course of action as he should under ordinary circumstances. One who is placed in
such a predicament cannot exercise such coolness or accuracy of judgment as is required of him
under ordinary circumstances and he cannot therefore be expected to observe the same judgment,
care and precaution as in the latter. For this reason, authorities abound where failure to observe the
same degree of care that as ordinary prudent man would exercise under ordinary circumstances
when confronted with a sudden emergency was held to be warranted and a justification to exempt
the carrier from liability. Thus, it was held that “where a carrier‟s employee is confronted with a
sudden emergency, the fact that he is obliged to act quickly and without a chance for deliberation
must be taken into account, and he is not held to the same degree of care that he would otherwise be
required to exercise in the absence of such emergency but must exercise only such care as any
ordinary prudent person would exercise under like circumstances and conditions, and the failure on
his part to exercise the best judgment the case renders possible does not establish lack of care and
skill on his part which renders the company, liable. Considering all the circumstances, the driver of
the bus has done what a prudent man could have done to avoid the collision and in our opinion this
relieves appellee from liability under our law.

(b) It appears that the negligence of the appellant was the proximate cause of the loss. When the
appellant boarded the bus in question, he seated himself on the left side thereof resting his left arm
on the window sill but with his left elbow outside the window, this being his position in the bus
when the collision took place. It is for this reason that the collision resulted in the severance of said
left arm from the body of appellant thus doing him a great damage. It is therefore apparent that
appellant is guilty of contributory negligence. Had he not placed his left arm on the window sill
with a portion thereof protruding outside, perhaps the injury would have been avoided as is the case
with the other passengers. It is to be noted that appellant was the only victim of the collision. (Isaac
v. A.L. Ammen Transportation Co., Inc., G.R. No. L-9671, August 23, 1957, 101 Phil. 1046)

3. The Manila Electric Company, is engaged in operating street cars in the City of Manila for
the conveyance of passengers; and on the morning of November 18, 1925, one Teodorico
Florenciano, as appellant‟s motorman, was in charge of car No. 74 running from east to west on R.
Hidalgo Street, the scene of the accident being at a point near the intersection of said street and
Mendoza Street. After the car had stopped at its appointed place for taking on and letting off
passengers, just east of the intersection, it resumed its course at a moderate speed under the
guidance of the motorman. The car had proceeded only a short distance, however, when the
plaintiff, Ignacio del Prado, ran across the street to catch the car, his approach being made from the
left. The car was of the kind having entrance and exit at either end, and the movement of the
plaintiff was so timed that he arrived at the front entrance of the car at the moment when the car was
passing. The plaintiff, upon approaching the car, raised his hand as an indication to the motorman of
his desire to board the car, in response to which the motorman eased up a little, without stopping.
Upon this the plaintiff seized, with his left hand, the front perpendicular handpost, at the same time
placing his left foot upon the platform. However, before the plaintiffs position had become secure,
and even before his raised right foot had reached the platform, the motorman applied the power,
with the result that the car gave a slight lurch forward. This sudden impulse to the car caused the
plaintiffs foot to slip, and his hand was jerked loose from the handpost. He therefore fell to the
ground, and his right foot was caught and crushed by the moving car. The next day the member had
to be amputated in the hospital. a) Is the carrier liable? b) Was there contributory negligence?

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 (a) The carrier is liable. Although the motorman claimed that he did not accelerate the speed of
the car, a motorman operating this car could not have failed to see a person boarding the car under
the circumstances. The direct and proximate cause of the injury was the act of appellant‟s
motorman in putting on the power prematurely.

(b) There was contributory negligence on the part of the plaintiff. It is obvious that the plaintiffs
negligence in attempting to board the moving car was not the proximate cause of the injury. The
direct and proximate cause of the injury was the act of appellant’s motorman in putting on the
power prematurely. A person boarding a moving car must be taken to assume the risk of injury from
boarding the car under the conditions open to his view, but he cannot fairly be held to assume the
risk that the motorman, having the situation in view, will increase his peril by accelerating the speed
of the car before he is planted safely on the platform. Again, the situation before us is one where the
negligent act of the company’s servant succeeded the negligent act of the plaintiff, and the
negligence of the company must be considered the proximate cause of the injury. The rule here
applicable seems to be analogous to, if not identical with that which is sometimes referred to as the
doctrine of “the last clear chance.” In accordance with this doctrine, the contributory negligence of
the party injured will not defeat the action if it be shown that the defendant might, by the exercise of
reasonable care and prudence, have avoided the consequences of the negligence of the injured party
(20 R. C. L., p. 139; Carr v. Interurban Ry. Co., 185 Iowa, 872; 171 N. W., 167). The negligence of
the plaintiff was, however, contributory to the accident and must be considered as a mitigating
circumstance. (Ignacio Del Prado v. Manila Electric Co., G.R. No. 29462, March 07, 1929)

4. On September 10,1972, at about 9:00 o‟clock in the evening, Winifredo Tupang, husband
of plaintiff Rosario Tupang, boarded Train No. 516 of appellant at Libmanan, Camarines Sur, as a
paying passenger bound for Manila. Due to some mechanical defect, the train stopped at Sipocot,
Camarines Sur, for repairs, taking some two hours before the train could resume its trip to Manila.
Unfortunately, upon passing Iyam Bridge at Lucena, Quezon, Winifredo Tupang fell off the train
resulting in his death. The train did not stop despite the alarm raised by the other passengers that
somebody fell from the train. Instead, the train conductor, Perfecto Abrazado, called the station
agent at Candelaria, Quezon, and requested for verification of the information. Police authorities of
Lucena City were dispatched to the Iyam Bridge where they found the lifeless body of Winifredo
Tupang. (a) Is the carrier liable? (b) Was there Contributory Negligence?

A: (a) Yes. The train boarded by the deceased Winifredo Tupang was so overcrowded that he and
many other passengers had no choice but to sit on the open platforms between the coaches of the
train. It is likewise undisputed that the train did not even slow down when it approached the Iyam
Bridge which was under repair at the time. Neither did the train stop, despite the alarm raised by
other passengers that a person had fallen off the train at Iyam Bridge. The petitioner has the
obligation to transport its passengers to their destinations and to observe extraordinary diligence in
doing so. Death or any injury suffered by any of its passengers gives rise to the presumption that it
was negligent in the performance of its obligation under the contract of carriage. Thus, as correctly
ruled by the respondent court, the petitioner failed to overthrow such presumption of negligence
with clear and convincing evidence.

(b) Yes, the deceased was chargeable with contributory negligence. Since he opted to sit on the open
platform between the coaches of the train, he should have held tightly and tenaciously on the
upright metal bar found at the side of said platform to avoid falling off from the speeding train.
Such contributory negligence, while not exempting the PNR from liability, nevertheless justified the
deletion of the amount adjudicated as moral damages. By the same token, the award of exemplary
damages must be set aside. Exemplary damages may be allowed only in cases where the defendant
acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. There being no evidence
of fraud, malice or bad faith on the part of petitioner, the grant of exemplary damages should be
discarded. (Philippine National Railways v. Hon. Court of Appeals, G.R. No. L-55347, October 4,
1985)

(250)

PROBLEMS:

1. X shipped several boxes of goods from Manila to Cebu on board a vessel owned by
Mabuhay Lines, Inc. When the boxes were delivered to Y Dry Goods, Inc., the consignee, several

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 boxes externally appeared to have been damaged. The proprietor of Y Dry Goods, Inc. paid the
freight charges upon receipt of the goods. However, when the boxes were opened two days later, it
was discovered that the contents of all the boxes had been damaged. The proprietor of Y Dry
Goods, Inc. seeks you advice on whether he may proceed against the carrier for damages.

A: The proprietor of Y Dry Goods, Inc. cannot proceed against the Mabuhay Lines, Inc. for
damages. Consequently, under Article 366 of the Code of Commerce, an action for damages is
barred if the goods arrived in damaged condition and the shipper files no claim within the following
period immediately upon delivery if the damage is apparent or within 24 hours from delivery if
damage is not apparent. No such notice of claim was filed by the proprietor in this case because the
boxes were opened only two days after delivery. (1984)

2. Mr. R shipped 2,244 packages of sugar from his hacienda to Iloilo through P Transport
Company. Out of the total, only 1,022 packages were delivered. No notice of claim was filed by Mr.
R and he directly filed case in court to recover the undelivered packages or their value. The case
was dismissed by the trial court on the ground that it was neither alleged or prove that the plaintiff
had complied with the provisions of Section 366 of the Commercial Code requiring the filing of a
claim. Was the dismissal proper?

The dismissal was not proper. Article 366 of the Commercial Code is limited to cases of claims for
damage to goods actually turned over by the carrier and received by the consignee, whether those
damages be apparent from an examination of the packages in which the goods are delivered, or of
such a character that the nature and extent of the damage is not apparent until the packages are
opened and the contents examined. Clearly, it has no application in cases wherein the goods
entrusted to the carrier are not delivered by the carrier to the consignee. In such cases, there can be
no question of a claim for damages suffered by the goods while in transport, since the claim for
damages arises exclusively out of the failure to make delivery.

It is very clear, then that in so far as this seeks to recover damages for defendant‟s failure to deliver
1,222 packages or bayones of sugar, the failure to make claim for such damages under the
provisions of Article 366 of the Commercial Code is no wise affects the respective rights of the
parties.

In so far this action is founded on a claim for damages resulting from the wetting of the 1,022
packages of sugar which were saved from the wreck, it seems clear that if these 1,022 packages of
sugar were delivered by the carrier and received by the consignee under and in pursuance of the
terms of the contract, this claim for damages would be defeated by the plaintiffs failure to make
claim therefor in accordance with the terms of Article 366 of the Code. The presentation of claims
under this article arises only in those cases wherein the carrier makes delivery and the consignee
receives the goods in pursuance of the terms of the contract.

Until the defendant has had an opportunity to submit his evidence it is impossible to determine
under what conditions these 1,022 packages of sugar came into the possession of the plaintiff, or to
determine whether his claim for damages by the wetting of this sugar, if well founded in every other
respect, is or should be defeated by his failure to make claim for such damages in the manner and
form indicated in Article 366 of the Commercial Code. We conclude that the judgment entered in
the court below should be reversed and the record remanded to the court below for a new trial upon
all the issues raised by the pleadings, it being expressly understood, however, that the evidence
already in the record may be considered as submitted at the new trial, without prejudice to the right
of either party to offer such additional evidence as he may deem proper in support of the allegations
set forth in the pleadings. No costs will be taxed in this instance. (Monica G. Roldan v. Lim Ponzo
& Co., G.R. No. L-11325, December 7, 1917)

(255-257)

PROBLEMS:

1. What is the prescriptive period for actions involving lost or damaged cargo under the
Carriage of Goods by Sea Act?

A: Section3[6]of the Carriage of Goods by Sea Act provides a prescriptive period of one year from
the time of delivery of the goods or the date when the goods should have been delivered. (1995 Bar)

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 2. A local consignee sought to enforce judicially a claim against the carrier for loss of a
shipment of drums of lubricating oil from Japan under the Carriage of Goods by Sea Act (COGSA)
after the carrier had rejected its demand. The carrier pleaded in its Answer the affirmative defense
of prescription under the provisions of said Act inasmuch as the suit was brought by the consignee
after one year from delivery of the goods. In turn, the consignee contended that the period of
prescription was suspended by the written extrajudicial demand it had made against the carrier
within the one-year period, pursuant to Article 1155 of the Civil Code providing that the
prescription of actions is interrupted when there is a written extrajudicial demand by the creditors.
Has the action, in fact, prescribed? Why?

The action taken by the consignee has prescribed. The prescriptive period under the Carriage of
Goods by Sea Act (COGSA) is one year from the time of delivery or the date when the goods
should have been delivered. The prescriptive period is not interrupted by a written extra-judicial
demand. The provisions of Article 1155 of the Civil Code cannot be applied because the same apply
only to prescriptive periods provided for in said Code and not to special laws like the COGSA.
(1992

3. A local consignee sought to enforce judicially a claim against the carrier for loss of a
shipment of drums of lubricating oil from Japan under the Carriage of Goods by Sea Act (COGSA)
after the carrier had rejected its demand. The carrier pleaded in its Answer the affirmative defense
of prescription under the provisions of said Act inasmuch as the suit was brought by the consignee
after one year from delivery of the goods. In turn, the consignee contended that the period of
prescription was suspended by the written extrajudicial demand it had made against the carrier
within the one-year period, pursuant to Article 1155 of the Civil Code providing that the
prescription of actions is interrupted when there is a written extrajudicial demand by the creditors.
Is the case filed beyond the prescriptive period if the consignee’s action were predicated on
misdelivery or conversion of the goods? Explain briefly.

The action has not prescribed if the consignee‟s action were predicated on misdelivery or
conversion of the goods. The provisions of the Carriage of Goods by Sea Act (COGSA) would be
inapplicable in case of misdelivery or conversion. When the cause of action is misdelivery or
conversion, the applicable rule are the Civil Code provisions on prescriptive periods, including
Article 1155 thereof. (1992)

4. Under COGSA, what is the effect of a provision inserted in the bill of lading that the
carrier shall not be liable for loss or damage to the cargo unless written notice thereof is given to the
carrier within 30 days after receipt of the cargo by the shipper or consignee? Reason out your
answer.

The provision is null and void and without any effect. Under COGSA, the lack of notice is not a bar
to the filing of a suit for damages within one year from receipt of the cargo. It is believed that any
provision in the contract which has the effect of reducing said one year period is null and void.
(1967)

5. Under the provisions of Section 3 of the Carriage of Goods by Sea Act, notice must be
given of loss or damage to the goods, a) Within what period must notice be given, if the loss or
damage is not apparent? b) Does the term “Toss” in this Act cover delivery to the wrong person?
Explain.

a) Notice of loss must be given within three days from the delivery of the goods, if the loss is not
apparent.

b) The term “loss” under the COGSA does not cover misdelivery or delivery to the wrong person.
“Loss” involves cases where no delivery at all was made to the shipper because the same had
perished, gone out of commerce or disappeared in such a way that their existence is unknown or
they cannot be recovered. (1975)

6. RC imported computer motherboards from the United States and had them shipped to
Manila abroad an ocean-going cargo ship owned by BC Shipping Company. When the cargo arrived

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 at the Manila seaport and delivered to RC, the crate appeared intact; but upon inspection of the
contents, RC discovered that the items inside had all been badly damaged. He did not file any notice
of damage or anything with anyone, least of all with BC Shipping Company. What he did was to
proceed directly to your office to consult whether he should have given a notice of damage and how
long a time he had to initiate a suit under the provisions of the Carriage of Goods By Sea Act (CA
65). What would be your advice?

I would advise RC to give notice of the damage sustained by the cargo within three days and to file
an action for damages within one year from the date of delivery of the cargo to him as provided for
under Section 3(6) of COGSA. (2000)

7. AA entered into a contract with BB through CC transport ladies‟ wear from Manila to
France with transshipment at Taiwan. Somehow the goods were not loaded at Taiwan on time.
Hence, when the goods arrived in France, they arrived “off-season” and AA was paid only for one-
half the value by the buyer. AA claimed damages from the shipping company and its agent. The
defense of the respondents was prescription. Considering that the ladies‟ wear suffered “loss of
value” as claimed by AA, should the prescriptive period be one year under the Carriage of Goods
by Sea Act, or ten years under the Civil Code? Explain briefly.

The applicable prescriptive period is ten years under the Civil Code. The one-year prescriptive
period under the Carriage of Goods by Sea Act does not apply because the present case involves
delay in the delivery of the goods. Loss under COGSA means no delivery at all was made by the
carrier of the goods because the same had perished or gone out of commerce deteriorated or
decayed while in transit. In the present case, the shipment of ladies‟ wear was actually delivered.
(2004)

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