MACAM vs. COURT OF APPEALS GR No.

125524; August 25,

1999
Thursday, January 29, 2009 Posted by Coffeeholic Writes
Labels: Case Digests, Commercial Law

Facts: Benito Macam, doing business under name Ben-Mac Enterprises,

shipped on board vessel Nen-Jiang, owned and operated by respondent China
Ocean Shipping Co. through local agent Wallem Philippines Shipping Inc., 3,500
boxes of watermelon covered by Bill of Lading No. HKG 99012, and 1,611 boxes
of fresh mangoes covered by Bill of Lading No. HKG 99013. The shipment
was bound for Hongkong with PAKISTAN BANK as consignee and Great Prospect
Company of Rowloon (GPC) as notify party.

Upon arrival in Hongkong, shipment was delivered by respondent WALLEM

directly to GPC, not to PAKISTAN BANK and without the required bill of
lading having been surrendered. Subsequently, GPC failed to pay PAKISTAN
BANK, such that the latter, still in possession of original bill of lading, refused to
pay petitioner thru SOLIDBANK. Since SOLIDBANK already pre-paid the value of
shipment, it demanded payment from respondent WALLEM but was refused.
MACAM constrained to return the amount paid by SOLIDBANK and demanded
payment from WALLEM but to no avail.

WALLEM submitted in evidence a telex dated 5 April 1989 as basis for delivering
the cargoes to GPC without the bills of lading and bank guarantee. The telex
instructed delivery of various shipments to the respective consignees without
need of presenting the bill of lading and bank guarantee per the respective
shipper’s request since “for prepaid shipt ofrt charges already fully paid.” MACAM,
however, argued that, assuming there was such an instruction, the consignee
referred to was PAKISTAN BANK and not GPC.

The RTC ruled for MACAM and ordered value of shipment. CA reversed RTC’s
decision.
Issue: Are the respondents liable to the petitioner for releasing the goods
to GPC without the bills of lading or bank guarantee?

Held: It is a standard maritime practice when immediate delivery is of the

essence, for shipper to request or instruct the carrier to deliver the goods to the
buyer upon arrival at the port of destination without requiring presentation of bill
of lading as that usually takes time. Thus, taking intoaccount that subject
shipment consisted of perishable goods and SOLIDBANK pre-paid the full amount
of value thereof, it is not hard to believe the claim of respondent WALLEM that
petitioner indeed requested the release of the goods to GPC without presentation
of the bills of lading and bank guarantee.

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 the buyer/importer is essentially a factor to reckon
with.

We emphasize that the extraordinary responsibility of the common carriers lasts

until actual or constructive delivery of the cargoes to the consignee or to the
person who has a right to receive them. PAKISTAN BANK was indicated in the
bills of lading as consignee whereas 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 Art.
1736 had, other than the consignee, the right to receive them was proper.
Samar Mining Co. vs Nordeutscher Lloyd Case Digest
Samar Mining Co., Inc. vs. Nordeutscher Lloyd
(132 SCRA 529)

Facts: Samar Mining imported 1 crate optima welded wire (amounting to around USD 424 or PhP
1,700) from Germany, which was shipped on a vessel owned by Nordeutscher Lloyd (M/S
Schwabenstein). The shipment was unloaded in Manila into a barge for transshipment to Davao and
temporarily stored in a bonded warehouse owned by AMCYL. The goods never reached Davao and
were never delivered to or received by the consignee, Samar Mining Co.

CFI ruled in favor of Samar Mining holding Nordeutscher Lloyd liable. However, defendants may
recoup whatever they may pay Samar Mining by enforcing the judgment against third party defendant
AMCYL.

Issue: Whether Nordeustscher Lloyd is liable for the loss of the goods as common carrier?

Held: No. At the time of the loss of the goods, the character of possession of Nordeutscher Lloyd
shifted from common carrier to agent of Samar Mining Co.

The Bill of Lading is serves both as a receipt of goods and is likewise the contract to transport and
deliver the same as stipulated. It is a contract and is therefore the law between the parties. The Bill of
Lading in question stipulated that Nordeutscher Lloyd only undertook to transport the goods in its
vessel only up to the port of discharge from ship, which is Manila. The Bill of Lading further stipulated
that the goods were to be transshipped by the carrier from Manila to the port of destination – Davao.
By unloading the shipment in Manila and delivering the goods to the warehouse of AMCYL, the
appellant was acting within the contractual stipulations contained in the Bill of Lading.

Article 1736 of the Civil Code relives the carrier of responsibility over the shipment as soon as the
carrier makes actual or constructive delivery of the goods to the consignee or to the person who has
a right to receive them.

Under the Civil Code provisions governing Agency, an agent can only be held liable in cases where
his acts are attended by fraud, negligence, deceit or if there is a conflict of interest between him and
the principal. Under the same law an agent is likewise liable if he appoints a substitute when he was
not given the power to appoint one or otherwise appoints one that is notoriously incompetent or
insolvent. These facts were not proven in the record.
Servando vs. Philippine Steam Navigation Co. Case Digest
Servando vs. Philippine Steam Navigation Co.
(117 SCRA 832)

Facts: Bico and Servando loaded on board the FS-176 the following cargoes: 1.528 cavans of rice
and 44 cartons of colored paper, toys and general merchandise. Upon the arrival of the vessel, the
cargoes were discharged, complete and in good order to the warehouse of the Bureau of Customs. At
2:00 pm of the same day, a fire of unknown reasons razed the warehouse. Before the fire, Bico was
able to take delivery of 907 cavans of rice. The petitioners are now claiming for the value of the
destroyed goods from the common carrier.

The Trial Court ordered the respondent to pay the plaintiffs the amount of their lost goods on the basis
that the delivery of the shipment to the warehouse is not the delivery contemplated by Article 1736 of
the New Civil Code, since the loss occurred before actual or constructive delivery. The petitioners
argued that the stipulation in the bills of lading does not bind them because they did not sign the same.
The stipulation states that the carrier shall not be responsible for loss unless such loss was due to the
carrier’s negligence. Neither shall it be liable for loss due to fortuitous events such as dangers of the
sea and war.

Issue: Whether or not the carrier should be held liable for the destruction of the goods

Held: No. There is nothing on record to show that the carrier incurred in delay in the performance of
its obligation. Since the carrier even notified the plaintiffs of the arrival of their shipments and had
demanded that they be withdrawn.

The carrier also cannot be charged with negligence since the storage of the goods was in the Customs
warehouse and was undoubtedly made with their knowledge and consent. Since the warehouse
belonged and maintained by the Government, it would be unfair to impute negligence to the appellant
since it has no control over the same.

1. MAERSK LINE VS COURT OF APPEALS

FACTS: Maersk Line is engaged in the transportation of goods by sea, doing business in the
Philippines through its general agent Compania General de Tabacos de Filipinas. Private respondent
Efren Castillo is the proprietor of Ethegal Laboratories, a firm engaged in the manufacture of
pharmaceutical products. On November 12, 1976, private respondent ordered from Eli Lilly. Inc. of
Puerto Rico through its agent in the Philippines, Elanco Products, 600,000 empty gelatin capsules
for the manufacture of his pharmaceutical products. The capsules were placed in six (6) drums of
100,000 capsules each valued at US $1,668.71. The 600,000 empty gelatin capsules in six drums
were already shipped on board MV "Anders Maerskline" for shipment to the Philippines via
Oakland, California. Shipper Eli Lilly, Inc. specified the date of arrival to be April 3, 1977. Said cargo
of capsules were mishipped and diverted to Richmond, Virginia, USA and then transported back
Oakland, Califorilia. The goods finally arrived in the Philippines on June 10, 1977 or after two (2)
months from the date specified in the memorandum. As a consequence, private respondent as
consignee refused to take delivery of the goods on account of its failure to arrive on time. Private
respondent alleging gross negligence and undue delay in the delivery of the goods, filed an action
before the trial for rescission of contract with damages against petitioner and Eli Lilly, Inc. as
defendants. Denying that it committed breach of contract, petitioner alleged in its that answer that
the subject shipment was transported in accordance with the provisions of the covering bill of
lading and that its liability under the law on transportation of good attaches only in case of loss,
destruction or deterioration of the goods as provided for in Article 1734 of Civil Code. Defendant Eli
Lilly, Inc., alleged that the delay in the arrival of the the subject merchandise was due solely to the
gross negligence of petitioner Maersk Line. The trial court ruled in favor of private respondent. The
Court of Appeals affirmed it with modifications.
(Note: The bill of lading covering the subject shipment among others, reads: 6. GENERAL (1) The
Carrier does not undertake that the goods shall arive at the port of discharge or the place of delivery
at any particular time or to meet any particular market or use and save as is provided in clause 4 the
Carrier shall in no circumstances be liable for any direct, indirect or consequential loss or damage
caused by delay. If the Carrier should nevertheless be held legally liable for any such direct or
indirect or consequential loss or damage caused by delay, such liability shall in no event exceed the
freight paid for the transport covered by this Bill of Lading. (Exh. "1-A"; AC-G.R. CV No. 10340, Folder
of Exhibits, p. 41))
ISSUE: Whether or not respondent Castillo is entitled to damages resulting from delay in the
delivery of the shipment in the absence in the bill of lading of a stipulation on the period of delivery.
HELD: Yes. It is not disputed that the aforequoted provision at the back of the bill of lading, in fine
print, is a contract of adhesion. Generally, contracts of adhesion are considered void since almost all
the provisions of these types of contracts are prepared and drafted only by one party, usually the
carrier. The only participation left of the other party in such a contract is the affixing
of his signature thereto, hence the term "Adhesion". Nonetheless, settled is the rule that bills of
lading are contracts not entirely prohibited. One who adheres to the contract is in reality free to
reject it in its entirety; if he adheres, he gives his consent. However, the aforequoted ruling applies
only if such contracts will not create an absurd situation as in the case at bar. The questioned
provision in the subject bill of lading has the effect of practically leaving the date of arrival of the
subject shipment on the sole determination and will of the carrier. While it is true that common
carriers are not obligated by law to carry and to deliver merchandise, and persons are not vested
with the right to prompt delivery, unless such common carriers previously assume the obligation to
deliver at a given date or time, delivery of shipment or cargo should at least be made within a
reasonable time. An examination of the subject bill of lading shows that the subject shipment was
estimated to arrive in Manila on April 3, 1977. While there was no special contract entered into by
the parties indicating the date of arrival of the subject shipment, petitioner nevertheless, was very
well aware of the specific date when the goods
 GANZON vs.COURT OF APPEALS and GELACIO E. TUMAMBING
(G.R. No. L-48757, May 30, 1988)

FACTS:

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 that
agreement, Mauro B. Ganzon sent his lighter "Batman" to Mariveles where
it docked in three feet of water. 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 after a heated argument between them, Mayor Jose Advincula drew
his gun and fired at Gelacio Tumambing who sustained injuries.

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.

Tumabing sued Ganzon; the latter alleged that the goods have not been
unconditionally placed under his custody and control to make him liable.
The trial court dismissed the case but on appeal, respondent Court
rendered a decision reversing the decision of the trial court and ordering
Ganzon to pay damages.

ISSUE:

Whether or not a contract of carriage has been perfected.

HELD:
Yes.

By the said act of delivery, the scraps were unconditionally placed in the
possession and control of the common carrier, and upon their receipt by
the carrier for transportation, the contract of carriage was deemed
perfected. Consequently, the petitioner-carrier's extraordinary responsibility
for the loss, destruction or deterioration of the goods commenced. Pursuant
to Art. 1736, such extraordinary responsibility would cease only upon the
delivery, actual or constructive, by the carrier to the consignee, or to the
person who has a right to receive them. The fact that part of the shipment
had not been loaded on board the lighter did not impair the said contract of
transportation as the goods remained in the custody and control of the
carrier, albeit still unloaded.

Before 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. 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 Tumambing for P5,000.00. The order of the
acting mayor did not constitute valid authority for Ganzon and his
representatives to carry out.
Loadstar Shipping vs CA Case Digest
Loadstar Shipping vs. Court of Appeals
315 SCRA 339, 1999

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

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

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

Held: Loadstar is a common carrier.

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

Article 1732 also carefully avoids making any distinction between a person or enterprise offering
transportation service on a regular or scheduled basis and one offering such service on an occasional,
episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its
services to the "general public," i.e., the general community or population, and one who offers services
or solicits business only from a narrow segment of the general population.
DE GUZMAN VS CA Case Digest
DE GUZMAN VS. COURT OF APPEALS
168 SCRA 612

Facts: Cendena was a junk dealer and was engaged in buying used bottles and scrap materials in
Pangasinan and brought these to Manila for resale. He used two 6-wheeler trucks. On the return trip
to Pangasinan, he would load his vehicles with cargo which various merchants wanted delivered to
Pangasinan. For that service, he charged freight lower than regular rates. General Milk Co. contacted
with him for the hauling of 750 cartons of milk. On the way to Pangasinan, one of the trucks was
hijacked by armed men who took with them the truck and its cargo and kidnapped the driver and his
helper. Only 150 cartons of milk were delivered. The Milk Co. sued to claim the value of the lost
merchandise based on an alleged contract of carriage. Cendena denied that he was a common carrier
and contended that he could not be liable for the loss it was due to force majeure. The trial court ruled
that he was a common carrier. The CA reversed.

Issue: Whether or not Cendena is a common carrier?

Held: Yes, Cendena is properly characterized as a common carrier even though he merely
backhauled goods for other merchants, and even if it was done on a periodic basis rather than on a
regular basis, and even if his principal occupation was not the carriage of goods.

Article 1732 makes no distinction between one whose principal business activity is the carrying of
persons or goods or both, and one who does such carrying only as an ancillary activity. It also avoids
making a distinction between a person or enterprise offering transportation services on a regular or
scheduled basis and one offering service on an occasional, episodic or unscheduled basis. Neither
does it make a distinction between a carrier offering its services to the general public and one who
offers services or solicits business only from a narrow segment of population.
Bascos v. CA
Facts:

Rodolfo Cipriano, representing CIPTRADE, entered into a hauling contract with Jibfair
Shipping Agency Corporation whereby the former bound itself to haul the latter’s
2000m/tons of soya bean meal from Manila to Calamba. CIPTRADE subcontracted with
petitioner Estrellita Bascos to transport and deliver the 400 sacks of soya beans.
Petitioner failed to deliver the cargo, and as a consequence, Cipriano paid Jibfair the
amount of goods lost in accordance with their contract. Cipriano demanded
reimbursement from petitioner but the latter refused to pay. Cipriano filed a complaint
for breach of contract of carriage. Petitioner denied that there was no contract of carriage
since CIPTRADE leased her cargo truck, and that the hijacking was a force majeure. The
trial court ruled against petitioner.

Issues:

(1) Was petitioner a common carrier?

(2) Was the hijacking referred to a force majeure?

Held:

(1) Article 1732 of the Civil Code defines a common carrier as "(a) person, corporation or
firm, or association engaged in the business of carrying or transporting passengers or
goods or both, by land, water or air, for compensation, offering their services to the
public." The test to determine a common carrier is "whether the given undertaking is a
part of the business engaged in by the carrier which he has held out to the general public
as his occupation rather than the quantity or extent of the business transacted." In this
case, petitioner herself has made the admission that she was in the trucking business,
offering her trucks to those with cargo to move. Judicial admissions are conclusive and
no evidence is required to prove the same.

(2) Common carriers are obliged to observe extraordinary diligence in the vigilance over
the goods transported by them. Accordingly, they are presumed to have been at fault or
to have acted negligently if the goods are lost, destroyed or deteriorated. There are very
few instances when the presumption of negligence does not attach and these instances
are enumerated in Article 1734. In those cases where the presumption is applied, the
common carrier must prove that it exercised extraordinary diligence in order to overcome
the presumption. The presumption of negligence was raised against petitioner. It was
petitioner's burden to overcome it. Thus, contrary to her assertion, private respondent
need not introduce any evidence to prove her negligence. Her own failure to adduce
sufficient proof of extraordinary diligence made the presumption conclusive against her.
Everett Steamship Corporation vs. Court of Appeals

March 12, 2016

FACTS

Private respondent imported 3 crates of bus spare parts marked as MARCO C/No.
12,MARCO C/No. 13 and MARCO C/No. 14, from its supplier, Maruman Trading
Company,Ltd. (Maruman Trading), a foreign corporation based in Inazawa, Aichi, Japan.
The crates were shipped from Nagoya, Japan to Manila on board “ADELFAEVERETTE,”
a vessel owned by petitioner’s principal, Everett Orient Lines. Upon arrival at the port of
Manila, it was discovered that the crate marked MARCO C/No. 14 was missing.
Privaterespondent claim upon petitioner for the value of the lost cargo amounting to One
Million Five Hundred Fifty Two Thousand Five Hundred (Y1, 552,500.00) Yen, theamount
shown in an Invoice No. MTM-941, dated November 14, 1991. However,petitioner offered
to pay only One Hundred Thousand (Y100,000.00) Yen, the maximum amount stipulated
under Clause 18 of the covering bill of lading which limits the liability of petitioner. Private
respondent rejected the offer and thereafter instituted a suit for collection. The trial court
rendered a decision in favour of the private respondents and this was affirmed by the
Court of Appeals. Thus, this instant petition.

ISSUE

Is private respondent, as consignee, who is not a signatory to the bill of lading bound by
the stipulations thereof?

HELD

Yes. The consignee who is not a signatory to the contract of carriage between the shipper
and the carrier, the consignee can still be bound by the contract.

The next issue to be resolved is whether or not private respondent, as consignee, who is
not a signatory to the bill of lading is bound by the stipulations thereof. Again, in Sea-land
Service, Inc. vs. Intermediate Appellate Court (Supra), we held that even in the consignee
between the shipper and the carrier, the consignee can still be bound by the contract.
Speaking through Mr. Chief Justice Narvasa, we ruled: “To begin with, there is no
question of the right, in the principle, of a consignee in a bill of lading to recover from the
carrier or shipper for loss of, or damage to goods being transported under the said bill,
although that document may have been-as in practice it oftentimes is-drawn up only by
the consignor and the carrier without the intervention of the consignee.

When private respondent formally claimed reimbursement for the missing goods from
petitioner and subsequently filed a case against the latter based on the very same bill of
lading, it (private respondent) accepted the provisions of the contract and thereby made
itself a party thereto, or at least has come to court to enforce it. Thus private respondent
cannot now reject or disregard the carrier’s limited liability stipulation in the bill of lading.
In other words, private respondents is bound by the whole stipulations in the bill of lading
and must respect the same.

Summa Insurance vs. CA GR. No. 84680

Facts:

S/S "Galleon Sapphire", a vessel owned by the National Galleon Shipping Corporation (NGSC),
arrived at Pier 3, South Harbor, Manila, carrying a shipment consigned to the order of Caterpillar
Far East Ltd. with Semirara Coal Corporation (Semirara) as "notify party". The shipment, including
a bundle of PC 8 U blades, was covered by marine issued by petitioner and Bill of Lading. The
shipment was discharged from the vessel to the custody of private respondent, formerly known
as E. Razon, Inc., the exclusive arrastre operator at the South Harbor. Accordingly, three good-
order cargo receipts were issued by NGSC, duly signed by the ship's checker and a representative
of private respondent.The forwarder, Sterling International Brokerage Corporation, withdrew the
shipment from the pier and loaded it on the barge "Semirara 8104". The barge arrived at its port
of destination, Semirara Island, on Upon inspection, Semirara discovered that the bundle of PC8U
blades was missing at its warehouse.Private respondent issued a short-landed certificate-stating
that the bundle of PC8U blades was already missing when it received the shipment from the
NGSC vessel. Semirara then filed with petitioner, private respondent and NGSC its claim for
P280,969.68, the alleged value of the lost bundle. Petitioner paid Semirara the invoice value of
the lost shipment. Semirara thereafter executed a release of claim and subrogation receipt.
Consequently, petitioner filed its claims with NGSC and private respondent but it was
unsuccessful. Petitioner then filed a complaint against NGSC and private respondent for
collection of a sum of money, damages and attorney's fees. The trial court rendered a decision
absolving NGSC from any liability but finding private respondent liable to petitioner. On appeal,
the Court of Appeals modified the decision of the trial court and reduced private respondent's
liability.

Issue:

1. Whether or not the private respondent legally liable for the loss of the shipment in
question?
2. What is the extent of its liability
Ruling:

1. Yes, SC finds the Respondent liable for the loss. Petitioner was subrogated to the rights
of the consignee. The relationship between the petitioner and the respondent is akin
to that existing between the consignee or owner of shipped goods and the common
carrier, or that between a depositor and a warehouseman. In the performance of its
obligations, an arrastre operator should observe the same degree of diligence as
that required of a common carrier and a warehouseman as enunciated under Article
1733 of the Civil Code and Section 3(8) of the Warehouse Receipts Law,
respectively. Being the custodian of the goods discharged from a vessel, an arrastre
operator's duty is to take good care of the goods and to turn them over to the party
entitled to their possession.
2. In the performance of its job, an arrastre operator is bound by the management
contract it had executed with the Bureau of Customs. However, a management
contract, which is a sort of a stipulation pour autrui within the meaning of Article 1311
of the Civil Code, is also binding on a consignee because it is incorporated in the gate
pass and delivery receipt which must be presented by the consignee before delivery
can be effected to .The insurer, as successor-in-interest of the consignee, is likewise
bound by the management contract. Indeed, upon taking delivery of the cargo, a
consignee (and necessarily its successor-in-interest) tacitly accepts the provisions of
the management contract, including those which are intended to limit the liability of
one of the contracting parties, the arrastre operator.

Eastern Shipping Lines Inc. v. IAC, 150 SCRA 463

Doctrine:
When a carrier fails to establish any caso fortuito, the presumption by law of fault or
negligence on the part of the carrier applies.
FACTS:

Carrier – Eastern Shipping Lines Inc

Shipper/Consignee –Stresstek Post Tensioning Philippines Inc

Insurer - First Nationwide Assurance Corporation

Arrastre Operator – E. Razon Inc. (not significant)

Eastern Shipping Lines Inc shipped uncoated 7-wire stress relieved wire strand for prestressed
concretewere shipped on board the vessel "Japri Venture,". Upon arrival at the port of Manila, it
discharged thecargo to the custody of the defendant E. Razon, Inc. from whom the consignee's
customs brokerreceived it for delivery to the consignee's warehouse. First Nationwide
Assurance, indemnified theconsignee in the amount of P171,923.00 for damage and loss to the
insured cargo, whereupon theformer was subrogated for the latter. The insurer now seeks to
recover from the defendants what ithas indemnified the consignee. The petitioner protested
alleging that it should not be hel liable to
answer for damages for the event that caused the rusting of the goods was due to the
“encounteredvery rough seas and stormy weather” classified as force majeure, hence relieving
them of any liability.

Aggrieved, respondent filed a case against petitioner.

RTC– dismissed the case

CA –set aside RTC’s decision and ordered petitioner to pay respondent

ISSUE:

W/N petitioner was negligent and should be held liable for the payment of damages.
HELD:

YES. Plainly, the heavy seas and rains referred to in the master's report were not
caso fortuito, but normal occurrences that an ocean-going vessel, particularly in the month of
September which, in our area, is a month of rains and heavy seas would encounter as a matter
of routine. They are not unforeseen nor unforeseeable. These are conditions that ocean-going
vessels would encounter and provide for, in the ordinary course of a voyage. That rain water
(not sea water) found its way into the holds of the Jupri Venture is a clear indication that care and
foresight did not attend the closing of the ship's hatches so that rainwater would not find its way
into the cargo holds of the ship.
 Moreover, under Article 1733 of the Civil Code, common carriers are bound to observe
"extra-ordinary vigilance over goods . . . .according to all circumstances of each case," and
Article 1735 of the same Code states, to wit:

Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the
preceding article, if the goods are lost, destroyed or deteriorated, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove that they
observed extraordinary diligence as required in article 1733.

Since the carrier has failed to establish any caso fortuito, the presumption by law of fault
or negligence on the part of the carrier applies; and the carrier must present evidence that it has
observed the extraordinary diligence required by Article 1733 of the Civil Code in order
to escape liability for damage or destruction to the goods that it had admittedly carried in this
case. No such evidence exists of record. Thus, the carrier cannot escape liability.

The presumption, therefore, that the cargo was in apparent good condition when it was
delivered by the vessel to the arrastre operator by the clean tally sheets has been overturned
and traversed. The evidence is clear to the effect that the damage to the cargo was suffered
while aboard petitioner's vessel.

ABOITIZ SHIPPING V. CA (G.R. NO. 84458)

Facts:
Anacleto Viana boarded the vessel M/V Antonia owned by petitioner Aboitiz
Shipping Corp at the port at San Jose, Occidental Mindoro, bound for Manila.
The vessel arrived at Pier 4, North Harbor, Manila and was taken over by
Pioneer Stevedoring for the latter to unload the cargoes from the said vessel
pursuant to their Memorandum of Agreement. An hour after the passengers
and Viana had disembarked the vessel the crane operator began its unloading
operation. While the crane was being operated, Viana who had already
disembarked the vessel remembered that some of his cargoes were still loaded
there. He went back and while he was pointing to the crew where his cargoes
were, the crane hit him pinning him between the side of the vessel and the
crane resulting to his death. A complaint for damages was filed against
petitioner for breach of contract of carriage. Petitioner contends that Viana
ceased to be a passenger when he disembarked the vessel and that consequently
his presence there was no longer reasonable. CA affirmed the trial court’s order
holding Aboitiz liable. Hence the petition.
Issue:
Whether or not petitioner is still responsible as a carrier to Viana after the latter
had already disembarked the vessel.
Ruling: YES.
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 primary factor to be considered is the existence of a reasonable cause as
will justify the presence of the victim on or near the petitioner’s vessel. We
believe there exists such a justifiable cause. 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.
Consequently, under the foregoing circumstances, the victim Anacleto Viana
is still deemed a passenger of said carrier at the time of his tragic death.
 PRECILLANO NECESITO, ETC. vs. NATIVIDAD PARAS, ET AL.
G.R. No. L-10605, June 30, 1958)

FACTS:

A mother and her son boarded a passenger auto-truck of the Philippine

Rabbit Bus Lines. While entering a wooden bridge, its front wheels swerved
to the right, the driver lost control and the truck fell into a breast-deep
creek. The mother drowned and the son sustained injuries. These cases
involve actions ex contractu against the owners of PRBL filed by the son
and the heirs of the mother. Lower Court dismissed the actions, holding
that the accident was a fortuitous event.

ISSUE:

Whether or not the carrier is liable for the manufacturing defect of the
steering knuckle, and whether the evidence discloses that in regard thereto
the carrier exercised the diligence required by law (Art. 1755, new Civil
Code)

HELD:

Yes.

While the carrier is not an insurer of the safety of the passengers, the
manufacturer of the defective appliance is considered in law the agent of
the carrier, and the good repute of the manufacturer will not relieve the
carrier from liability. The rationale of the carrier’s liability is the fact that the
passengers has no privity with the manufacturer of the defective
equipment; hence, he has no remedy against him, while the carrier has.
We find that the defect could be detected. The periodical, usual inspection
of the steering knuckle did not measure up to the “utmost diligence of a
very cautious person” as “far as human care and foresight can provide” and
therefore the knuckle’s failure cannot be considered a fortuitous event that
exempts the carrier from responsibility.
Bacarro vs. Castano
(GR L-34597, 5 November 1982)
FACTS:
Respondent Castano boarded a jeep driven by Petitioner Montefalcon whothereafter drove it at around 40
kilometers per hour. While approaching SumasapBridge at the said speed, a cargo truck coming from behind,
blowing its horn to signal itsintention to overtake the jeep. The jeep, without changing its speed, gave way
byswerving to the right, such that both vehicles ran side by side for a distance of around20 meters. Thereafter as
the jeep was left behind, its driver was unable to return it to itsformer lane and instead it obliquely or diagonally ran
down an inclined terrain towardsthe right until it fell into a ditch pinning down and crushing Casta
no’s right leg in the
process. Castano filed a case for damages against Rosita Bacarro, William Sevilla, andFelario Montefalcon.
Defendants alleged that the jeepney was sideswiped by theovertaking cargo truck. After trial, the CFI of Misamis
Oriental ordered Bacarro, et.al.
to jointly and severally pay Castano. It was affirmed by the CA upon appeal.
ISSUES:
1. Whether or not there was a contributory negligence on the part of the jeepney driver.2. Whether or not
extraordinary diligence is required of the jeepney driver.3. Whether or not the sideswiping is a fortuitous event.
HELD:
1.) Yes. The fact is, petitioner-driver Montefalcon did not slacken his speed but insteadcontinued to run the jeep
at about forty (40) kilometers per hour even at the time theovertaking cargo truck was running side by side for
about twenty (20) meters and atwhich time he even shouted to the driver of the truck.
2.) Yes. The fact is, there was a contract of carriage between the private respondentand the herein petitioners in
which case the Court of Appeals correctly applied Articles1733, 1755 and 1766 of the Civil Code which require
the exercise of extraordinarydiligence on the part of petitioner Montefalcon.
3.) The third assigned error of the petitioners would find fault upon respondent court innot freeing petitioners from
any liability, since the accident was due to a fortuitous event.But, We repeat that the alleged fortuitous event in this
case - the sideswiping of the jeepney by the cargo truck, was something which could have been
avoided consideringthe narrowness of the Sumasap Bridge which was not wide enough to admit twovehicles.
As found by the Court of Appeals, Montefalcon contributed to the occurrenceof the mishap

Trans-Asia Shipping vs. Court of Appeals

(254 SCRA 260)

Facts: Plaintiff (herein private respondent Atty. Renato Arroyo) bought a ticket from herein petitioner for the voyage of M/V Asia Thailand
Vessel to Cagayan de Oro from Cebu City. Arroyo boarded the vessel in the evening of November 12, 1991 at around 5:30. At that instance,
plaintiff noticed that some repair works were being undertaken on the evening of the vessel. The vessel departed at around 11:00 in the evening
with only one engine running.

After an hour of slow voyage, vessel stopped near Kawit Island and dropped its anchor threat. After an hour of stillness, some passenger
demanded that they should be allowed to return to Cebu City for they were no longer willing to continue their voyage to Cagayan de Oro City.
The captain acceded to their request and thus the vessel headed back to Cebu City. At Cebu City, the plaintiff together with the other
passengers who requested to be brought back to Cebu City was allowed to disembark. Thereafter, the vessel proceeded to Cagayan de Oro
City. Plaintiff, the next day boarded the M/V Asia Japan for its voyage to Cagayan de Oro City, likewise a vessel of the defendant.

On account of this failure of defendant to transport him to the place pf destination on November 12, 1991, plaintiff filed before the trial court a
complaint for damages against the defendant.

Issue: Whether or not the failure of a common carrier to maintain in seaworthy condition its vessel involved in a contract of carriage a breach
of its duty?

Held: Undoubtedly, there was, between the petitioner and private respondent a contract of carriage. Under Article 1733 of the Civil Code, the
petitioner was bound to observed extraordinary diligence in ensuring the safety of the private respondent. That meant that the petitioner was
pursuant to the Article 1755 off the said Code, bound to carry the private respondent safely as far as human care and foresight could provide,
using the utmost diligence of very cautious persons, with due regard for all the circumstances. In this case, the Supreme Court is in full accord
with the Court of Appeals that the petitioner failed or discharged this obligation.

Before commencing the contact of voyage, the petitioner undertook some repairs on the cylinder head of one of the vessel’s engines. But even
before it could finish these repairs it allowed the vessel to leave the port of origin on only one functioning engine, instead of two. Moreover,
even the lone functioning engine was not in perfect condition at sometime after it had run its course, in conked out. Which cause the vessel to
stop and remain adrift at sea, thus in order to prevent the ship from capsizing, it had to drop anchor. Plainly, the vessel was unseaworthy even
before the voyage begun. For the vessel to be seaworthy, it must be adequately equipped for the voyage and manned with the sufficient
number of competent officers and crew. The Failure of the common carrier to maintain in seaworthy condition its vessel involved in a contract
of carriage is a clear breach of its duty prescribed in Article 1755 of the Civil Code.

SINGSON vs. COURT OF APPEALS and CATHAY PACIFIC AIRWAYS

(G.R. No. 119995. November 18, 1997)

FACTS:

Petitioner CARLOS SINGSON and his cousin Crescentino Tiongson

bought from respondent Cathay Pacific Airways two (2) open-dated,
identically routed, round trip plane tickets (Manila to LA and vice versa).
Each ticket consisted of six (6) flight coupons, each would be detached at
the start of each leg of the trip.

Singson failed to obtain a booking in LA for their to Manila; apparently, the

coupon corresponding to the 5th leg of the trip was missing and instead the
3rd was still attached. It was not until few days later that the defendant
finally was able to arrange for his return to Manila.

Singson commenced an action for damages based on breach of contract of

carriage against CATHAY before the Regional Trial Court.

CATHAY alleged that there was no contract of carriage yet existing such
that CATHAY’s refusal to immediately book him could not be construed as
breach of contract of carriage.

The trial court rendered a decision in favor of petitioner herein holding that
CATHAY was guilty of gross negligence amounting to malice and bad faith
for which it was adjudged to pay petitioner P20,000.00 for actual damages
with interest at the legal rate of twelve percent (12%) per annum from 26
August 1988 when the complaint was filed until fully paid, P500,000.00 for
moral damages, P400,000.00 for exemplary damages, P100,000.00 for
attorney’s fees, and, to pay the costs.

On appeal by CATHAY, the Court of Appeals reversed the trial court’s

finding that there was gross negligence amounting to bad faith or fraud
and, accordingly, modified its judgment by deleting the awards for moral
and exemplary damages, and the attorney’s fees as well.

Issue:
W/N a breach of contract was committed by CATHAY when it failedto confirm the booking of petitioner for its 1
July 1988 flight

Ruling: Yes.
CATHAY undoubtedly committed a breach of contract when it
refused to confirm petitioner’s flight reservation back to the Philippines on
account of his missing flight coupon.To begin with, the round trip ticket issued by the carrier to the passenger was in itself
a complete written contract by and between the carrierand the passenger. It had all the elements of a
complete written contract, towit: (a) the consent of the contracting parties manifested by the fact that
the passenger agreed to be transported by the carrier to and from Los Angeles via
San Francisco and Hongkong back to the Philippines, and the carrier’s
acceptance to bring him to his destination and then back home; (b) cause orconsideration, which was the fare
paid by the passenger as stated in his ticket;and, (c) object, which was the transportation of the passenger from the
placeof departure to the place of destination and back, which are also stated in histicket. In fact,
the contract of carriage in the instant case was already partiallyexecuted as the carrier complied with its
obligation to transport the passengerto his destination, i.e.,Los Angeles. Only the performance of the other half ofthe
contract
—
which was to transport the passenger back to the Philippines
—
was left to be done.Clearly therefore pe
titioner was not a mere “chance
passenger with nosuperior right to be boarded on a specific
flight,” as erroneously claimed
byCATHAY and sustained by the appellate court.To hold that no contractual breach was committed by CATHAY
andtotally absolve it from any liability would in effect put a premium on thenegligence of its agents, contrary to the
policy of the law requiring commoncarriers to exercise extraordinary diligence

JAL vs CA
Japan Airlines vs Court of Appeals (G.R. No. 118664)
Facts: Private respondents boarded a JAL flight in San Francisco, California bound for Manila. It
included an overnight stopover at Narita, Japan at JAL’s expense. Due to the Mt. Pinatubo
eruption, private respondents’ trip to Manila was cancelled. JAL rebooked all the Manila-bound
passengers and paid for the hotel expenses of their unexpected overnight stay. The flight of
private respondents was again cancelled due to NAIA’s indefinite closure. JAL informed the
respondents that it would no longer defray their hotel and accommodation expense during their
stay in Narita. The respondents were forced to pay for their accommodations and meal expenses
for 5 days.

Issues:

1. Whether or not JAL has the obligation to shoulder the hotel and meal expenses even if the delay
was caused by force majeure
2. Whether or not the award of damages was proper
Held:

1. When a party is unable to fulfill his obligation because of force majeure, the general rule is that
he cannot be held liable for damages for non-performance. When JAL was prevented from
resuming its flight to Manila due to the effects of the eruption, whatever losses or damages in the
form of hotel and meal expenses the stranded passengers incurred cannot be charged to JAL. The
predicament of the private respondents was not due to the fault or negligence of JAL. JAL had the
duty to arrange the respondents’ flight back to Manila. However, it failed to look after the
comfort and convenience of its passengers when it made the passengers arrange their flight back
to Manila on their own and after waiting in the airport for a whole day.
2. Yes, the award of nominal damages is proper. Nominal damages are adjudicated in order that a
right of a plaintiff, which has been violated or invaded by the defendant, may be vindicated or
recognized and not for the purpose of indemnifying any loss suffered by him.
 Yobido v. Court of Appeals 281 SCRA 1, G.R. No. 113003
(October 17, 1997)
Facts:

1. Spouses Tito and Leny Tumboy and their minor children named Ardee and Jasmin boarded a
Yobido Liner bus.
2. The left front tire of the bus exploded.
3. The bus fell into a ravine which resulted in the death of 28-year old Tumboy and physical injuries
to other passengers.

Issue/s:

1. Whether or not the Yobido (bus-owner) be exempt from liability because the tire blowout was no
more than a fortuitous event that could not have foreseen.

Ruling:

1. No. Under the circumstances of the present case, the explosion of the new tire may not be
considered a fortuitous event. It is settled that an accident caused either by defects in the
automobile or through the negligence of its driver is not a caso fortuito that would exempt the
carrier from liability for damages.

A common carrier may not be absolved from liability in case of force majeure or fortuitous
event alone. The common carrier must still prove that it was not negligent in causing the
death or injury resulting from an accident.

In culpa contractual, once a passenger dies or injured, the carrier is presumed to have
been at fault or to have acted negligently. This presumption may only be overcome by
evidence that the carrier had observed extraordinary diligence.

The Yobido failed to rebut the testimony of Leny Tumboy that the bus was running so fast
that she cautioned the driver to slow down. These contradictory facts must, be resolved
in favor of liability in view of the presumption of negligence of the carrier in the law.
Coupled with this is the established condition of the road tough, winding and wet due to
rain. It was incumbent upon the defense to establish that it took precautionary measures
considering partially dangerous condition of the road.

Yobido failed to discharge its duty to overthrow the presumption of negligence with clear
and convincing evidence.
Baliwag Transit vs. CA
Facts:
Leticia Garcia and her son boarded a bus owned by Baliwag bound for Cabanatuan City. While in Nueva Ecija, the
passengers saw a cargo truck at the shoulder of the national highway, and a kerosene lamp appeared to serve as a
warning light. But the driver of the bus was driving at fast speed, failed to notice the truck and the kerosene lamp, and
when he was able to step on the break, it was too late. The bus rammed into the cargo truck causing the death of the bus
driver and the helper of the cargo truck driver; and injuries to Leticia and her son and to some other passengers.
Issue:
WON Baliwag Transit should be held liable.
Held: YES.
As a common carrier, Baliwag breached its contract of carriage when it failed to deliver its passengers, Leticia and Allan
Garcia to their destination safe and sound. A common carrier is bound to carry its passengers safely as far as human care
and foresight can provide, using the utmost diligence of a very cautious person, with due regard for all the
circumstances. In a contract of carriage, it is presumed that the common carrier was at fault or was negligent when a
passenger dies or is injured. Unless the presumption is rebutted, the court need not even 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 as prescribed in Articles 1733 and 1755 of the Civil Code.
The records are bereft of any proof to show that Baliwag exercised extraordinary diligence. On the contrary, the
evidence demonstrates its driver’s recklessness. Leticia Garcia testified that the bus was running at a very high speed
despite the drizzle and the darkness of the highway. The passengers pleaded for its driver to slow down, but their plea
was ignored. Leticia also revealed that the driver was smelling of liquor. She could smell him as she was seated right
behind the driver. Another passenger, Felix Cruz testified that immediately before the collision, the bus driver was
conversing with a co-employee. All these prove the bus driver’s wanton disregard for the physical safety of his
passengers, which make Baliwag as a common carrier liable for damages under Article 1759 of the Civil Code.

Bachelor Express vs. CA

G.R. No. 85691, July 31, 1990
FACTS:
A bus owned by Bachelor express and driven by Cresencio Rivera was the
situs of a stampeded which resulted in the death of passengers Ornominio Beter
and Narcisa Rautraut.
A passenger at the rear portion suddenly stabbed a PC soldier which caused
commotion and panic among the passengers. When the bus stopped, the two said
passengers were found lying on the road and dead because of head injuries. The
passenger-assailant ran alighted the bus and ran towards the bushes but was killed
by the police. The heirs of the deceased filed a complaint for “a sum of money”
against Bachelor Express, the owner, and the driver Rivera.
RTC dismissed complaint and later on reversed and found Bachelor Express,
its owner and the driver solidarily liable.
Bachelor Express, Inc. denies liability for the death of Beter and Rautraut on
its posture that the death of the said passengers was caused by a third person who
was beyond its control and supervision; that the accident resulting in the death of
the two passengers was caused by force majeure over which the CC did not have
any control. (1174)
ISSUE:
Whether or not Bachelor Express is liable.
RULING:
The liability is anchored on culpa contractual.
Bachelor Express, being a CC, is presumed to have acted negligently unless it
can prove that it had observed extraordinary diligence in accordance with Art. 1733
and 1755.
A caso fortuito presents the following essential characteristics: (1) The cause
of the unforeseen and unexpected occurrence, or of the failure of the debtor to
comply with his obligation, must be independent of the human will. (2) It must be
impossible to foresee the event which constitutes the caso fortuito, or if it can be
foreseen, it must be impossible to avoid. (3) The occurrence must be such as to
render it impossible for the debtor to fulfill his obligation in a normal manner. And
(4) the obligor (debtor) must be free from any participation in the aggravation of the
injury resulting to the creditor.
The running amuck of the passenger was the proximate cause of the incident
as it triggered off a commotion an 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 o 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 I causing the
injuries resulting from such accident.
The CC was negligent in the provision of safety precautions so that its
passengers may be transported safely to their destinations. The door was not
locked as to prevent the passengers from alighting. The conductor opened the door
when the passengers started shouting. The door was forced open by the onrushing
passengers.
The speed of the bus was not slow, 30/40.
Appeals 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 lawit is clear that the
petitioners have failed to overcome the presumption of fault and negligence found
in the law governing common carriers.
GACAL v. PAL

G.R. No. 55300

PARAS; March 15, 1990

NATURE

Petition for review on certiorari of the decision of the Court of First Instance

FACTS

Franklin G. Gacal and his wife, Corazon, Bonifacio S. Anislag and his wife,
Mansueta, and the late Elma de Guzman, boarded a PAL flight to Manila from the
Davao Airport. Commander Zapata, and five other armed members of the Moro
National Liberation Front (MNLF), all passengers of the same flight, hijacked the
aircraft ten minutes after take off. The hijackers directed the pilot to fly to Libya but
upon the pilot’s explanation of the fuel limitations, they relented and directed the
aircraft to land at Zamboanga Airport.

At the runway of the Zamboanga Airport, the aircraft was met by two armored cars
of the military with machine guns pointed at the plane. The rebels demanded that a DC-
aircraft take them to Libya with the President of PAL as hostage and that they be given
$375,000 and 6 armalites, otherwise they will blow up the plane. The negotiations
lasted for three days and it was only on the third day that the passengers were served
1/4 slice of a sandwich and 1/10 cup of PAL water. On the same day, relatives of the
hijackers were allowed to board the plane but immediately after they alighted therefrom,
a battle between the military and the hijackers ensued, culminating in the liberation of
the surviving crew and passengers, the death of 10 passengers and 3 hijackers, and the
capture of the 3 others.

Franklin G. Gacal was unhurt but his wife suffered injuries and was hospitalized for
2 days. Bonifacio S. Anislag 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. Elma
de Guzman died because of that battle.

The plaintiffs filed an action for damages demanding from PAL actual damages for
hospital and medical expenses and the value of lost personal belongings, moral
damages, attorney’s fees and exemplary damages. The trial court dismissed the
complaints finding that all the damages sustained in the premises were attributed to
force majeure. Hence, this petition.

ISSUE

Whether or not PAL is liable for damages

HELD

NO. Under Art 1733 of the Civil Code, common carriers are required to exercise
extraordinary diligence in their vigilance over the goods and for the safety of passengers
transported by them, according so all the circumstances of each case. They are
presumed at fault or to have acted negligently whenever a passenger dies or is injured or
for the loss, destruction or deterioration of goods in cases other than those enumerated
in Article 1734 of the Civil Code.

The source of a common carrier's legal liability is the contract of carriage, and by
entering into said contract, it binds itself to carry the passengers safely as far as human
care and foresight can provide. There is breach of this obligation if it fails to exert
extraordinary diligence according to all the circumstances of the case in exercise of the
utmost diligence of a very cautious person.

It is the duty of a common carrier to overcome the presumption of negligence and

it must be shown that the carrier had observed the required extraordinary diligence of a
very cautious person as far as human care and foresight can provide or that the accident
was caused by a fortuitous event. Thus, as ruled by this Court, no person shall be
responsible for those "events which could not be foreseen or which though foreseen
were inevitable." (Article 1174, Civil Code). The term is synonymous with caso fortuito
which is of the same sense as "force majeure".

In order to constitute a caso fortuito or force majeure that would exempt a person
from liability under Article 1174 of the Civil Code, it is necessary that the following
elements must concur: (a) the cause of the breach of the obligation must be independent
of the human will (the will of the debtor or the obligor); (b) the event must be either
unforeseeable or unavoidable; (c) the event must be such as to render it impossible for
the debtor to fulfill his obligation in a normal manner; and (d) the debtor must be free
from any participation in, or aggravation of the injury to the creditor. Caso fortuito or
force majeure, by definition, are extraordinary events not foreseeable or avoidable,
events that could not be foreseen, or which, though foreseen, are inevitable. It is,
therefore, not enough that the event should not have been foreseen or anticipated, as is
Pilapil vs. CA Case Digest
Pilapil vs. Court of Appeals
180 SCRA 546

Facts: On September 16, 1971, Jose Pilapil boarded defendant’s bus bearing No. 409 at San Nicolas,
Iriga City at about 6:00PM. Upon reaching the vicinity of the cemetery of the Municipality of Baao,
Camarines Sur, on the way to Naga City City, an unidentified man ( a bystander) hurled a stone at the
left side of the bus, which apparently hit petitioner above his left eye. He was then immediately brought
by private respondent’s personnel to the provincial hospital in Naga City.

Issue: Whether or not the nature of the business of a transportation company requires the assumption
of certain risks and the stroking of the bus by a bystander resulting in injury to petitioner-passenger is
one such risk from which the common carrier may not exempt itself from liability?

Held: The Supreme Court held that while the law requires the highest degree of diligence from
common carriers in the safe transport of their passengers and creates a presumption of negligence
against them, it does not however, make the carrier an insurer of absolute safety of its passengers. A
tort, committed by a stranger which causes an injury to a passenger does not accord the latter a cause
of action against the carrier. The negligence for which a common carrier is 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, 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 the
family.