transpo midterms

8/20/2019 Transpo Midterms

1/74

1. G.R. No. 95582 October 7, 1991

DANGWA TRANSPORTATION CO., INC. and THODOR !ARDI"A#A! $ %A!CDAN, petitioners, vs.CO&RT O' APPA!S, INOCNCIA C&DIA%AT, %I!IA C&DIA%AT #ANDO(, 'RNANDO C&D!A%AT,%ARRITA C&DIA%AT, NOR%A C&DIA%AT, DANT C&DIA%AT, SA%&! C&DIA%AT and !IGA(A C&DIA%AT, a)) He*r+ o t-e )ate Pedr*to Cd*a/at re0re+ented b$ Inocenc*a Cd*a/at, respondents.

RGA!ADO, J.:p

On May 13, 1985, private respondents fled a complaint 1 or damages against petitioners or the death o PedritoCdiamat as a reslt o a vehiclar accident !hich occrred on March "5, 1985 at Marivic, #apid, Man$ayan,%enget. &mong others, it !as alleged that on said date, !hile petitioner 'heodore M. (ardi)a*al !as driving apassenger *s *elonging to petitioner corporation in a rec$less and imprdent manner and !ithot de regard totra+ic rles and reglations and saety to persons and property, it ran over its passenger, Pedrito Cdiamat. o!ever,instead o *ringing Pedrito immediately to the nearest hospital, the said driver, in tter *ad aith and !ithot regardto the !elare o the victim, frst *roght his other passengers and cargo to their respective destinations *eore*anging said victim to the (epanto ospital !here he e-pired.

On the other hand, petitioners alleged that they had o*served and contined to o*serve the e-traordinary diligencereired in the operation o the transportation company and the spervision o the employees, even as they add thatthey are not a*solte insrers o the saety o the p*lic at large. /rther, it !as alleged that it !as the victim0s o!ncarelessness and negligence !hich gave rise to the s*ect incident, hence they prayed or the dismissal o thecomplaint pls an a!ard o damages in their avor *y !ay o a conterclaim.

On 2ly "9, 1988, the trial cort rendered a decision, e+ectively in avor o petitioners, !ith this decretal portion

4 647 O/ &(( '7 /O7:O4:, dgment is here*y prononced that Pedrito Cdiamat !asnegligent, !hich negligence !as the pro-imate case o his death. onetheless, deendants in eity,are here*y ordered to pay the heirs o Pedrito Cdiamat the sm o P1;,;;;.;; !hich appro-imatesthe amont deendants initially o+ered said heirs or the amica*le settlement o the case. o costs.

#O O, 199;, set aside the decision o the lo!er cort, and ordered petitioners to payprivate respondents

1. 'he sm o 'hirty 'hosand ?P3;,;;;.;;@ Pesos *y !ay o indemnity or death o the victim PedritoCdiamatA

". 'he sm o '!enty 'hosand ?P";,;;;.;;@ *y !ay o moral damagesA

3. 'he sm o '!o ndred 7ighty 7ight 'hosand ?P"88,;;;.;;@ Pesos as actal and compensatorydamagesA

>. 'he costs o this sit.

Petitioners0 motion or reconsideration !as denied *y the Cort o &ppeals in its resoltion dated Octo*er >,199;,5 hence this petition !ith the central isse herein *eing !hether respondent cort erred in reversing the

decision o the trial cort and in fnding petitioners negligent and lia*le or the damages claimed.

4t is an esta*lished principle that the actal fndings o the Cort o &ppeals as a rle are fnal and may not *erevie!ed *y this Cort on appeal. o!ever, this is s*ect to settled e-ceptions, one o !hich is !hen the fndings o the appellate cort are contrary to those o the trial cort, in !hich case a ree-amination o the acts and evidencemay *e nderta$en. 3

4n the case at *ar, the trial cort and the Cort o &ppeal have discordant positions as to !ho *et!een the petitionersan the victim is gilty o negligence. Perorce, !e have had to condct an evalation o the evidence in this case orthe prope cali*ration o their conBicting actal fndings and legal conclsions.

'he lo!er cort, in declaring that the victim !as negligent, made the ollo!ing fndings

'his Cort is satisfed that Pedrito Cdiamat !as negligent in trying to *oard a moving vehicle,especially !ith one o his hands holding an m*rella. &nd, !ithot having given the driver or thecondctor any indication that he !ishes to *oard the *s. %t deendants can also *e ond !antingo the necessary diligence. 4n this connection, it is sae to assme that !hen the deceased Cdiamatattempted to *oard deendants0 *s, the vehicle0s door !as open instead o *eing closed. 'his shold*e so, or it is hard to *elieve that one !old even attempt to *oard a vehicle ?i@n motion i the door o said vehicle is closed. ere lies the deendant0s lac$ o diligence. nder sch circmstances, eitydemands that there mst *e something given to the heirs o the victim to assage their eelings. 'his,also considering that initially, deendant common carrier had made overtres to amica*ly settle thecase. 4t did o+er a certain monetary consideration to the victim0s heirs. 7

o!ever, respondent cort, in arriving at a di+erent opinion, declares that


2/74

/rom the testimony o appellees0o!n !itness in the person o 6italiano #aarita, it is evident that thes*ect *s !as at ll stop !hen the victim Pedrito Cdiamat *oarded the same as it !as preciselyon this instance !here a certain Miss &*enoa alighted rom the *s. Moreover, contrary to theassertion o the appellees, the victim did indicate his intention to *oard the *s as can *e seen romthe testimony o the said !itness !hen he declared that Pedrito Cdiamat !as no longer !al$ing andmade a sign to *oard the *s !hen the latter !as still at a distance rom him. 4t !as at the instance!hen Pedrito Cdiamat !as closing his m*rella at the platorm o the *s !hen the latter made asdden er$ movement ?as@ the driver commenced to accelerate the *s.

7vidently, the incident too$ place de to the gross negligence o the appellee=driver in prematrely

stepping on the accelerator and in not !aiting or the passenger to frst secre his seat especially so!hen !e ta$e into accont that the platorm o the *s !as at the time slippery and !et *ecase o adri))le. 'he deendants=appellees tterly ailed to o*serve their dty and o*ligation as commoncarrier to the end that they shold o*serve e-tra=ordinary diligence in the vigilance over the goodsand or the saety o the passengers transported *y them according to the circmstances o each case?&rticle 1D33, e! Civil Code@. 8

&ter a carel revie! o the evidence on record, !e fnd no reason to distr* the a*ove holding o the Cort o &ppeals. 4ts aoresaid fndings are spported *y the testimony o petitioners0 o!n !itnesses. One o them, 6irginia &*alos, testifed on cross=e-amination as ollo!s

E 4t is not a act Madam !itness, that at *n$hose 5>, that is *eore the place o theincident, there is a crossingF

& 'he !ay going to the mines *t it is not *eing pass?ed@ *y the *s.

E &nd the incident happened *eore *n$hose 5G, is that not correctF

& It happened between 54 and 53 bunkhouses. 9

'he *s condctor, Martin &nglog, also declared

E hen yo arrived at (epanto on March "5, 1985, !ill yo please inorm thisonora*le Cort i there !as anv nsal incident that occrredF

& hen !e delivered a *aggage at Marivic *ecase a person alighted there between Bunkhouse 53 and 54.

E hat happened !hen yo delivered this passenger at this particlar place in(epantoF

& When we reached the place, a passenger alighted and I signalled my driver. Whenwe stopped we went out because I saw an umbrella about a split second and I signalled again the driver, so the driver stopped and we went down and we saw Pedrito udiamat asking !or help because he was lying down.

E o! ar a!ay !as this certain person, Pedrito Cdiamat, !hen yo sa! him lyingdo!n H rom the *s ho! ar !as heF

& 4t is a*ot t!o to three meters.

E "n what direction o! the bus was he !ound about three meters !rom the bus, was itat the !ront or at the back#

& $t the back, sir. 14 ?7mphasis spplied.@

'he oregoing testimonies sho! that the place o the accident and the place !here one o the passengers alighted!ere *oth *et!een %n$hoses 53 and 5>, hence the fnding o the Cort o &ppeals that the *s !as at ll stop!hen the victim *oarded the same is correct. 'hey rther confrm the conclsion that the victim ell rom theplatorm o the *s !hen it sddenly accelerated or!ard and !as rn over *y the rear right tires o the vehicle, assho!n *y the physical evidence on !here he !as thereater ond in relation to the *s !hen it stopped. nder schcircmstances, it cannot *e said that the deceased !as gilty o negligence.

'he contention o petitioners that the driver and the condctor had no $no!ledge that the victim !old ride on the*s, since the latter had spposedly not maniested his intention to *oard the same, does not merit consideration.hen the *s is not in motion there is no necessity or a person !ho !ants to ride the same to signal his intention to*oard. & p*lic tility *s, once it stops, is in e+ect ma$ing a continos o+er to *s riders. ence, it *ecomes thedty o the driver and the condctor, every time the *s stops, to do no act that !old have the e+ect o increasingthe peril to a passenger !hile he !as attempting to *oard the same. 'he prematre acceleration o the *s in thiscase !as a *reach o sch dty.

4t is the dty o common carriers o passengers, inclding common carriers *y railroad train, streetcar, or motor*s,to stop their conveyances a reasona*le length o time in order to a+ord passengers an opportnity to *oard andenter, and they are lia*le or inries s+ered *y *oarding passengers reslting rom the sdden starting p or er$ing o their conveyances !hile they are doing so.


3/74

/rther, even assming that the *s !as moving, the act o the victim in *oarding the same cannot *e considerednegligent nder the circmstances. &s clearly e-plained in the testimony o the aorestated !itness or petitioners, 6irginia &*alos, th *s had Ist startedI and I!as still in slo! motionI at the point !here the victim had *oardedand !as on its platorm.

4t is not negligence per se, or as a matter o la!, or one attempt to *oard a train or streetcar !hich is movingslo!ly. &n ordinarily prdent person !old have made the attempt *oard the moving conveyance nder the same orsimilar circmstances. 'he act that passengers *oard and alight rom slo!ly moving vehicle is a matter o commone-perience *oth the driver and condctor in this case cold not have *een na!are o sch an ordinary practice.

'he victim herein, *y stepping and standing on the platorm o the *s, is already considered a passenger and isentitled all the rights and protection pertaining to sch a contractal relation. ence, it has *een held that the dty!hich the carrier passengers o!es to its patrons e-tends to persons *oarding cars as !ell as to those alightingthererom.

Common carriers, rom the natre o their *siness and reasons o p*lic policy, are *ond to o*serve e-traordinadiligence or the saety o the passengers transported *y the according to all the circmstances o each case. & common carrier is *ond to carry the passengers saely as ar as hman care and oresight can provide, sing thetmost diligence very catios persons, !ith a de regard or all the circmstances.

4t has also *een repeatedly held that in an action *ased on a contract o carriage, the cort need not ma$e an e-pressfnding o alt or negligence on the part o the carrier in order to hold it responsi*le to pay the damages soght *ythe passenger. %y contract o carriage, the carrier assmes the e-press o*ligation to transport the passenger to hisdestination saely and o*serve e-traordinary diligence !ith a de regard or all the circmstances, and any inry

that might *e s+ered *y the passenger is right a!ay attri*ta*le to the alt or negligence o the carrier. 'his is ane-ception to the general rle that negligence mst *e proved, and it is thereore incm*ent pon the carrier to provethat it has e-ercised e-traordinary diligence as prescri*ed in &rticles 1D33 and 1D55 o the Civil Code.

Moreover, the circmstances nder !hich the driver and the condctor ailed to *ring the gravely inred victimimmediately to the hospital or medical treatment is a patent and incontroverti*le proo o their negligence. 4t defesnderstanding and can even *e stigmati)ed as callos indi+erence. 'he evidence sho!s that ater the accident the*s cold have orth!ith trned at %n$ 5G and thence to the hospital, *t its driver instead opted to frst proceed to%n$ D; to allo! a passenger to alight and to deliver a rerigerator, despite the serios condition o the victim. 'he vacos reason given *y petitioners that it !as the !ie o the deceased !ho cased the delay !as tersely andcorrectly conted *y respondent cort

... 'he pretension o the appellees that the delay !as de to the act that they had to !ait or a*ott!enty mintes or 4nocencia Cdiamat to get dressed deserves scant consideration. 4t is rather

scandalos and deplora*le or a !ie !hose hs*and is at the verge o dying to have the l-ry o dressing hersel p or a*ot t!enty mintes *eore attending to help her distressed and helplesshs*and. 19

/rther, it cannot *e said that the main intention o petitioner (ardi)a*al in going to %n$ D; !as to inorm the victim0s amily o the mishap, since it !as not said *s driver nor the condctor *t the companion o the victim !hoinormed his amily thereo. 24 4n act, it !as only ater the rerigerator !as nloaded that one o the passengersthoght o sending some*ody to the hose o the victim, as sho!n *y the testimony o 6irginia &*alos again, to !it

E hy, !hat happened to yor rerigerator at that particlar timeF

& 4 as$ed them to *ring it do!n *ecase that is the nearest place to or hose and!hen 4 !ent do!n and as$ed some*ody to *ring do!n the rerigerator, 4 also as$ed

some*ody to call the amily o Mr. Cdiamat.

CO'

E hy did yo as$ some*ody to call the amily o Mr. CdiamatF

& %ecase Mr. Cdiamat met an accident, so 4 as$ some*ody to call or the amily o Mr. Cdiamat.

E %t no*ody as$?ed@ yo to call or the amily o Mr. CdiamatF

& o sir. 21

ith respect to the a!ard o damages, an oversight !as, ho!ever, committed *y respondent Cort o &ppeals incompting the actal damages *ased on the gross income o the victim. 'he rle is that the amont recovera*le *ythe heirs o a victim o a tort is not the loss o the entire earnings, *t rather the loss o that portion o the earnings!hich the *enefciary !old have received. 4n other !ords, only net earnings, not gross earnings, are to *econsidered, that is, the total o the earnings less e-penses necessary in the creation o sch earnings or income andmins living and other incidental e-penses. 22

e are o the opinion that the dedcti*le living and other e-pense o the deceased may airly and reasona*ly *e f-edat P5;;.;; a month or PG,;;;.;; a year. 4n addicating the actal or compensatory damages, respondent cortond that the deceased !as >8 years old, in good health !ith a remaining prodctive lie e-pectancy o 1" years,and then earning P">,;;;.;; a year. sing the gross annal income as the *asis, and mltiplying the same *y 1" years, it accordingly a!arded P"88,;;;. &pplying the aorestated rle on comptation *ased on the net earnings,


4/74

said a!ard mst *e, as it here*y is, rectifed and redced to P"1G,;;;.;;. o!ever, in accordance !ith prevailing risprdence, the death indemnity is here*y increased to P5;,;;;.;;. 2

77/O7, s*ect to the a*ove modifcations, the challenged dgment and resoltion o respondent Cort o &ppeals are here*y &//4M7< in all other respects.

#O O


5/74

&rticle 1D3". Common carriers are persons, corporations, frms or associations engaged in the*siness o carrying or transporting passengers or goods or *oth, *y land, !ater, or air orcompensation, o+ering their services to the p*lic.

'he a*ove article ma$es no distinction *et!een one !hose principal *siness activity is the carrying o persons orgoods or *oth, and one !ho does sch carrying only as an ancillary activity ?in local 4diom as Ia sidelineI@. &rticle1D3" also carelly avoids ma$ing any distinction *et!een a person or enterprise o+ering transportation service ona regular or scheduled basis and one o+ering sch service on an occasional, episodic or unscheduled basis. eitherdoes &rticle 1D3" distingish *et!een a carrier o+ering its services to the Igeneral public,I i.e., the generalcommnity or poplation, and one !ho o+ers services or solicits *siness only rom a narro! segment o the general

poplation. e thin$ that &rticle 1D33 deli*eraom ma$ing sch distinctions.

#o nderstood, the concept o Icommon carrierI nder &rticle 1D3" may *e seen to coincide neatly !ith the notion o Ip*lic service,I nder the P*lic #ervice &ct ?Common!ealth &ct o. 1>1G, as amended@ !hich at least partiallyspplements the la! on common carriers set orth in the Civil Code. nder #ection 13, paragraph ?*@ o the P*lic#ervice &ct, Ip*lic serviceI incldes

... every person that no! or hereater may o!n, operate, manage, or control in the Philippines, orhire or compensation, with general or limited clientele, whether permanent, occasional or accidental,and done !or general business purposes, any common carrier, railroad, street rail!ay, tractionrail!ay, s*!ay motor vehicle, either or reight or passenger, or *oth, !ith or !ithot f-ed roteand !hatever may *e its classifcation, reight or carrier service o any class, e-press service,steam*oat, or steamship line, pontines, erries and !ater crat, engaged in the transportation o passengers or reight or *oth, shipyard, marine repair shop, !har or doc$, ice plant,

ice=rerigeration plant, canal, irrigation system, gas, electric light, heat and po!er, !ater spply andpo!er petrolem, se!erage system, !ire or !ireless commnications systems, !ire or !ireless*roadcasting stations and other similar p*lic services. ... ?7mphasis spplied@

4t appears to the Cort that private respondent is properly characteri)ed as a common carrier even thogh he merelyI*ac$=haledI goods or other merchants rom Manila to Pangasinan, althogh sch *ac$=haling !as done on aperiodic or occasional rather than reglar or schedled manner, and even thogh privaterespondent0sprincipal occpation !as not the carriage o goods or others. 'here is no dispte that privaterespondent charged his cstomers a ee or haling their goodsA that ee reently ell *elo! commercial reightrates is not relevant here.

'he Cort o &ppeals reerred to the act that private respondent held no certifcate o p*lic convenience, andconclded he !as not a common carrier. 'his is palpa*le error. & certifcate o p*lic convenience is not a reisiteor the incrring o lia*ility nder the Civil Code provisions governing common carriers. 'hat lia*ility arises the

moment a person or frm acts as a common carrier, !ithot regard to !hether or not sch carrier has also complied!ith the reirements o the applica*le reglatory statte and implementing reglations and has *een granted acertifcate o p*lic convenience or other ranchise. 'o e-empt private respondent rom the lia*ilities o a commoncarrier *ecase he has not secred the necessary certifcate o p*lic convenience, !old *e o+ensive to sondp*lic policyA that !old *e to re!ard private respondent precisely or ailing to comply !ith applica*le stattoryreirements. 'he *siness o a common carrier impinges directly and intimately pon the saety and !ell *eing andproperty o those mem*ers o the general commnity !ho happen to deal !ith sch carrier. 'he la! imposes dtiesand lia*ilities pon common carriers or the saety and protection o those !ho tili)e their services and the la!cannot allo! a common carrier to render sch dties and lia*ilities merely acltative *y simply ailing to o*tain thenecessary permits and athori)ations.

e trn then to the lia*ility o private respondent as a common carrier.

Common carriers, I*y the natre o their *siness and or reasons o p*lic policyI 2 are held to a very high degree o

care and diligence ?Ie-traordinary diligenceI@ in the carriage o goods as !ell as o passengers. 'he specifc import o e-traordinary diligence in the care o goods transported *y a common carrier is, according to &rticle 1D33, Irthere-pressed in &rticles 1D3>,1D35 and 1D>5, nm*ers 5, G and DI o the Civil Code.

&rticle 1D3> esta*lishes the general rle that common carriers are responsi*le or the loss, destrction ordeterioration o the goods !hich they carry, Iunless the same is de to any o! the !ollowing causes only

?1@ /lood, storm, eartha$e, lightning or other natral disaster or calamityA?"@ &ct o the p*lic enemy in !ar, !hether international or civilA?3@ &ct or omission o the shipper or o!ner o the goodsA?>@ 'he character=o the goods or deects in the pac$ing or=in the containersA and?5@ Order or act o competent p*lic athority.

4t is important to point ot that the a*ove list o cases o loss, destrction or deterioration !hich e-empt thecommon carrier or responsi*ility thereor, is a closed list. Cases alling otside the oregoing list, even i theyappear to constitte a species o orce maere all !ithin the scope o &rticle 1D35, !hich provides as ollo!s

In all cases other than those mentioned in numbers +, , 3, 4 and 5 o! the preceding article, i! thegoods are lost, destroyed or deteriorated, common carriers are presumed to have been at !ault or tohave acted negligently, unless they prove that they observed e-traordinary diligence as reired in &rticle 1D33. ?7mphasis spplied@

&pplying the a*ove=oted &rticles 1D3> and 1D35, !e note frstly that the specifc case alleged in the instant caseH the hiac$ing o the carrier0s trc$ H does not all !ithin any o the fve ?5@ categories o e-empting cases listedin &rticle 1D3>. 4t !old ollo!, thereore, that the hiac$ing o the carrier0s vehicle mst *e dealt !ith nder theprovisions o &rticle 1D35, in other !ords, that the private respondent as common carrier is presmed to have *een


6/74

at alt or to have acted negligently. 'his presmption, ho!ever, may *e overthro!n *y proo o e-traordinarydiligence on the part o private respondent.

Petitioner insists that private respondent had not o*served e-traordinary diligence in the care o petitioner0s goods.Petitioner arges that in the circmstances o this case, private respondent shold have hired a secrity gardpresma*ly to ride !ith the trc$ carrying the G;; cartons o (i*erty flled mil$. e do not *elieve, ho!ever, that inthe instant case, the standard o e-traordinary diligence reired private respondent to retain a secrity gard toride !ith the trc$ and to engage *rigands in a frelight at the ris$ o his o!n lie and the lives o the driver and hishelper.

'he precise isse that !e address here relates to the specifc reirements o the dty o e-traordinary diligence inthe vigilance over the goods carried in the specifc conte-t o hiac$ing or armed ro**ery.

&s noted earlier, the dty o e-traordinary diligence in the vigilance over goods is, nder &rticle 1D33, givenadditional specifcation not only *y &rticles 1D3> and 1D35 *t also *y &rticle 1D>5, nm*ers >, 5 and G, &rticle 1D>5provides in relevant part

&ny o the ollo!ing or similar stiplations shall *e considered nreasona*le, nst and contrary top*lic policy

--- --- ---

?5@ that the common carrier shall not *e responsi*le or the acts or omissions o his or

its employeesA

?G@ that the common carrier0s lia*ility or acts committed *y thieves, or o robbers !ho donot act !ith grave or irresistible threat, violence or !orce, is dispensed!ith or diminishedA and

?D@ that the common carrier shall not responsi*le or the loss, destrction ordeterioration o goods on accont o the deective condition o the car vehicle, ship,airplane or other eipment sed in the contract o carriage. ?7mphasis spplied@

nder &rticle 1D>5 ?G@ a*ove, a common carrier is held responsi*le H and !ill not *e allo!ed to divest or to diminishsch responsi*ility H even or acts o strangers li$e thieves or ro**ers, e-cept !here sch thieves or ro**ers in actacted I!ith grave or irresisti*le threat, violence or orce.I e *elieve and so hold that the limits o the dty o e-traordinary diligence in the vigilance over the goods carried are reached !here the goods are lost as a reslt o a

ro**ery !hich is attended *y Igrave or irresisti*le threat, violence or orce.I

4n the instant case, armed men held p the second trc$ o!ned *y private respondent !hich carried petitioner0scargo. 'he record sho!s that an inormation or ro**ery in *and !as fled in the Cort o /irst 4nstance o 'arlac,%ranch ", in Criminal Case o. 198 entitled I People o! the Philippines v. elipe Boncorno, /apoleon Presno, $rmando 'esina, "scar "ria and one (ohn &oe.I 'here, the accsed !ere charged !ith !illlly and nla!lly ta$ing andcarrying a!ay !ith them the second trc$, driven *y Manel 7strada and loaded !ith the G;; cartons o (i*ertyflled mil$ destined or delivery at petitioner0s store in rdaneta, Pangasinan. 'he decision o the trial cort sho!sthat the accsed acted !ith grave, i not irresisti*le, threat, violence or orce. 'hree ?3@ o the fve ?5@ hold=ppers!ere armed !ith frearms. 'he ro**ers not only too$ a!ay the trc$ and its cargo *t also $idnapped the driver andhis helper, detaining them or several days and later releasing them in another province ?in Jam*ales@. 'he hiac$edtrc$ !as s*seently ond *y the police in Ee)on City. 'he Cort o /irst 4nstance convicted all the accsed o ro**ery, thogh not o ro**ery in *and.

4n these circmstances, !e hold that the occrrence o the loss mst reasona*ly *e regarded as ite *eyond thecontrol o the common carrier and properly regarded as a ortitos event. 4t is necessary to recall that even commoncarriers are not made a*solte insrers against all ris$s o travel and o transport o goods, and are not held lia*leor acts or events !hich cannot *e oreseen or are inevita*le, provided that they shall have complied !ith therigoros standard o e-traordinary diligence.

e, thereore, agree !ith the reslt reached *y the Cort o &ppeals that private respondent Cendana is not lia*leor the vale o the ndelivered merchandise !hich !as lost *ecase o an event entirely *eyond privaterespondent0s control.

&CCO


7/74

#ometime in 2anary 1995, petitioner applied or a mayor0s permit !ith the O+ice o the Mayor o %atangasCity. o!ever, *eore the mayor0s permit cold *e issed, the respondent City 'reasrer reired petitioner to pay alocal ta- *ased on its gross receipts or the fscal year 1993 prsant to the (ocal :overnment Code. L3 'herespondent City 'reasrer assessed a *siness ta- on the petitioner amonting to P95G,;DG.;> paya*le in orinstallments *ased on the gross receipts or prodcts pmped at :P#=1 or the fscal year 1993 !hich amontedto P181,G81,151.;;. 4n order not to hamper its operations, petitioner paid the ta- nder protest in the amonto P"39,;19.;1 or the frst arter o 1993.

On 2anary ";, 199>, petitioner fled a letter=protest addressed to the respondent City 'reasrer, the pertinentportion o !hich reads

IPlease note that or Company ?/P4C@ is a pipeline operator !ith a government concession granted nder thePetrolem &ct. 4t is engaged in the *siness o transporting petrolem prodcts rom the %atangas refneries, viapipeline, to #cat and 2'/ Pandacan 'erminals. &s sch, or Company is e-empt rom paying ta- on gross receiptsnder #ection 133 o the (ocal :overnment Code o 1991 - - - -

IMoreover, 'ransportation contractors are not inclded in the enmeration o contractors nder #ection 131,Paragraph ?h@ o the (ocal :overnment Code. 'hereore, the athority to impose ta- 0on contractors and otherindependent contractors0 nder #ection 1>3, Paragraph ?e@ o the (ocal :overnment Code does not inclde the po!erto levy on transportation contractors.

I'he imposition and assessment cannot *e categori)ed as a mere ee athori)ed nder #ection 1>D o the (ocal:overnment Code. 'he said section limits the imposition o ees and charges on *siness to sch amonts as may *ecommensrate to the cost o reglation, inspection, and licensing. ence, assming argendo that /P4C is lia*le orthe license ee, the imposition thereo *ased on gross receipts is violative o the aorecited provision. 'he amonto P95G,;DG.;> ?P"39,;19.;1 per arter@ is not commensrate to the cost o reglation, inspection andlicensing. 'he ee is already a revene raising measre, and not a mere reglatory imposition.IL>

On March 8, 199>, the respondent City 'reasrer denied the protest contending that petitioner cannot *econsidered engaged in transportation *siness, ths it cannot claim e-emption nder #ection 133 ?@ o the (ocal:overnment Code.L5

On 2ne 15, 199>, petitioner fled !ith the egional 'rial Cort o %atangas City a complaint LG or ta- rend!ith prayer or a !rit o preliminary innction against respondents City o %atangas and &doracion &rellano in hercapacity as City 'reasrer. 4n its complaint, petitioner alleged, inter alia, that ?1@ the imposition and collection o the*siness ta- on its gross receipts violates #ection 133 o the (ocal :overnment CodeA ?"@ the athority o cities toimpose and collect a ta- on the gross receipts o Icontractors and independent contractorsI nder #ec. 1>1 ?e@ and151 does not inclde the athority to collect sch ta-es on transportation contractors or, as defned nder #ec. 131?h@, the term IcontractorsI e-cldes transportation contractorsA and, ?3@ the City 'reasrer illegally and erroneosly

imposed and collected the said ta-, ths meriting the immediate rend o the ta- paid. LD

'raversing the complaint, the respondents arged that petitioner cannot *e e-empt rom ta-es nder #ection133 ?@ o the (ocal :overnment Code as said e-emption applies only to Itransportation contractors and personsengaged in the transportation *y hire and common carriers *y air, land and !ater.I espondents assert that pipelinesare not inclded in the term Icommon carrierI !hich reers solely to ordinary carriers sch as trc$s, trains, shipsand the li$e. espondents rther posit that the term Icommon carrierI nder the said code pertains to the mode ormanner *y !hich a prodct is delivered to its destination.L8

On Octo*er 3, 199>, the trial cort rendered a decision dismissing the complaint, rling in this !ise

I--- Plainti+ is either a contractor or other independent contractor.

--- the e-emption to ta- claimed *y the plainti+ has *ecome nclear. 4t is a rle that ta- e-emptions are to *e strictlyconstred against the ta-payer, ta-es *eing the lie*lood o the government. 7-emption may thereore *e grantedonly *y clear and neivocal provisions o la!.

IPlainti+ claims that it is a grantee o a pipeline concession nder ep*lic &ct 38D, ?7-hi*it &@ !hose concession!as lately rene!ed *y the 7nergy eglatory %oard ?7-hi*it %@. Ket neither said la! nor the deed o concession grantany ta- e-emption pon the plainti+.

I7ven the (ocal :overnment Code imposes a ta- on ranchise holders nder #ec. 13D o the (ocal 'a- Code. #ch*eing the sitation o*tained in this case ?e-emption *eing nclear and eivocal@ resort to distinctions or otherconsiderations may *e o help

1. 'hat the e-emption granted nder #ec. 133 ?@ encompasses only common carriers so as not toover*rden the riding p*lic or commters !ith ta-es. Plainti+ is not a common carrier, *t aspecial carrier e-tending its services and acilities to a single specifc or Ispecial cstomerI

nder a Ispecial contract.I

". 'he (ocal 'a- Code o 199" !as *asically enacted to give more and e+ective local atonomy to localgovernments than the previos enactments, to ma$e them economically and fnancially via*leto serve the people and discharge their nctions !ith a concomitant o*ligation to acceptcertain devoltion o po!ers, - - - #o, consistent !ith this policy even ranchise grantees areta-ed ?#ec. 13D@ and contractors are also ta-ed nder #ec. 1>3 ?e@ and 151 o the Code.I L9

Petitioner assailed the aoresaid decision *eore this Cort via a petition or revie!. On /e*rary "D, 1995, !ereerred the case to the respondent Cort o &ppeals or consideration and addication. L1; On ovem*er "9, 1995,the respondent cort rendered a decisionL11 a+irming the trial cort0s dismissal o petitioner0s complaint. Petitioner0smotion or reconsideration !as denied on 2ly 18, 199G.L1"

http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/125948.htm#_edn12


8/74

ence, this petition. &t frst, the petition !as denied de corse in a esoltion dated ovem*er 11, 199G.L13 Petitioner moved or a reconsideration !hich !as granted *y this Cort in a esoltion L1> o 2anary ";,199D.'hs, the petition !as reinstated.

Petitioner claims that the respondent Cort o &ppeals erred in holding that ?1@ the petitioner is not a commoncarrier or a transportation contractor, and ?"@ the e-emption soght or *y petitioner is not clear nder the la!.

'here is merit in the petition.

& Icommon carrierI may *e defned, *roadly, as one !ho holds himsel ot to the p*lic as engaged in the*siness o transporting persons or property rom place to place, or compensation, o+ering his services to the p*licgenerally.

&rticle 1D3" o the Civil Code defnes a Icommon carrierI as Iany person, corporation, frm or associationengaged in the *siness o carrying or transporting passengers or goods or *oth, *y land, !ater, or air, orcompensation, o+ering their services to the p*lic.I

'he test or determining !hether a party is a common carrier o goods is

1. e mst *e engaged in the *siness o carrying goods or others as a p*lic employment, and mst holdhimsel ot as ready to engage in the transportation o goods or person generally as a *siness andnot as a casal occpationA

". e mst nderta$e to carry goods o the $ind to !hich his *siness is confnedA

3. e mst nderta$e to carry *y the method *y !hich his *siness is condcted and over his esta*lished

roadsA and

>. 'he transportation mst *e or hire.L15

%ased on the a*ove defnitions and reirements, there is no do*t that petitioner is a common carrier. 4t isengaged in the *siness o transporting or carrying goods, i.e. petrolem prodcts, or hire as a p*licemployment. 4t nderta$es to carry or all persons indi+erently, that is, to all persons !ho choose to employ itsservices, and transports the goods *y land and or compensation. 'he act that petitioner has a limited clientele doesnot e-clde it rom the defnition o a common carrier. 4n &e 0u1man vs. ourt o! $ppealsL1G !e rled that

I'he a*ove article ?&rt. 1D3", Civil Code@ ma$es no distinction *et!een one !hose principal *siness activity is thecarrying o persons or goods or *oth, and one !ho does sch carrying only as an ancillary activity ?in local idiom, asa 0sideline0@. &rticle 1D3" - - - ao*d+ /a:*n an$ d*+t*nct*on bet;een a 0er+on or enter0r*+e oer*n

tran+0ortat*on +er*ce on a regular or scheduled basis and one oer*n +c- +er*ce on an occasional,episodic or unscheduled basis. Ne*t-er doe+ Art*c)e 172 d*+t*n*+- bet;een a carr*er oer*n *t++er*ce+ to t-e


9/74

Ithat everything relating to the e-ploration or and e-ploitation o petrolem - - and everything relating to themanactre, refning, storage, or tran+0ortat*on b$ +0ec*a) /et-od+ o 0etro)e/, is here*y declared to *ea 0b)*c t*)*t$.I ?nderscoring #pplied@

'he %rea o 4nternal evene li$e!ise considers the petitioner a Icommon carrier.I 4n %4 ling o. ;G9=83,it declared

I- - - since Lpetitioner is a pipeline concessionaire that is engaged only in transporting petrolem prodcts, it isconsidered a common carrier nder ep*lic &ct o. 38D - - -. #ch *eing the case, it is not s*ect to !ithholdingta- prescri*ed *y evene eglations o. 13=D8, as amended.I

/rom the oregoing disisition, there is no do*t that petitioner is a Icommon carrierI and, thereore, e-emptrom the *siness ta- as provided or in #ection 133 ?@, o the (ocal :overnment Code, to !it

I#ection 133. ommon 2imitations on the a-ing Powers o! 2ocal 0overnment nits. = nless other!ise providedherein, the e-ercise o the ta-ing po!ers o provinces, cities, mnicipalities, and *arangays shall not e-tend to thelevy o the ollo!ing

- - - - - - - - -

?@ 'a-es on the gross receipts o transportation contractors and persons engaged in the transportation o passengers or reight *y hire and common carriers *y air, land or !ater, e-cept as provided in thisCode.I

'he deli*erations condcted in the ose o epresentatives on the (ocal :overnment Code o 1991 areillminating

IM. &E4O ?&@. 'han$ yo, Mr. #pea$er.

Mr. #pea$er, !e !old li$e to proceed to page 95, line 1. 4t states I#7C.1"1 Lno! #ec. 131. Common (imitations onthe 'a-ing Po!ers o (ocal :overnment nits.I - - -

M. &E4O ?&.@. 'han$ yo Mr. #pea$er.

#till on page 95, s*paragraph 5, on ta-es on the *siness o transportation. 'his appears to *e one o those *eingdeemed to *e e-empted rom the ta-ing po!ers o the local government nits. %a$ ;e :no; t-e rea+on ;-$ t-e

tran+0ortat*on b+*ne++ *+ be*n e=c)ded ro/ t-e ta=*n 0o;er+ o t-e )oca) oern/ent n*t+>

M. 2&647 ?7.@. Mr. #pea$er, there is an e-ception contained in #ection 1"1 ?no! #ec. 131@, line 1G, paragraph 5. 4tstates that local government nits may not impose ta-es on the *siness o transportation, e-cept as other!iseprovided in this code.

o!, Mr. #pea$er, i the :entleman !old care to go to page 98 o %oo$ 44, one can see there that provinces have thepo!er to impose a ta- on *siness enoying a ranchise at the rate o not more than one=hal o 1 percent o the grossannal receipts. #o, transportation contractors !ho are enoying a ranchise !old *e s*ect to ta- *y theprovince. 'hat is the e-ception, Mr. #pea$er.

W-at ;e ;ant to ard aa*n+t -ere, %r. S0ea:er, *+ t-e */0o+*t*on o ta=e+ b$ )oca) oern/ent n*t+ ont-e carr*er b+*ne++. (ocal government nits may impose ta-es on top o !hat is already *eing imposed *y theational 4nternal evene Code !hich is the so=called Icommon carriers ta-.I We do not ;ant a d0)*cat*on o t-*+ ta=, +o ;e ?+t 0ro*ded or an e=ce0t*on nder #ection 1"5 Lno! #ec. 13D that a province may impose thista- at a specifc rate.

M. &E4O ?&.@. T-an: $o or t-at c)ar*@cat*on, %r. S0ea:er. - - -L18

4t is clear that the legislative intent in e-clding rom the ta-ing po!er o the local government nit theimposition o *siness ta- against common carriers is to prevent a dplication o the so=called Icommon carrier0sta-.I

Petitioner is already paying three ?3N@ percent common carrier0s ta- on its gross salesearnings nder theational 4nternal evene Code.L19 'o ta- petitioner again on its gross receipts in its transportation o petrolem*siness !old deeat the prpose o the (ocal :overnment Code.

WHR'OR, the petition is here*y :&'7


10/74

#!!OSI!!O, J.:

GN ertili)er !hich the latter shipped in *l$ on 1G 2ne 19D> a*oardthe cargo vessel M6 I#n PlmI o!ned *y private respondent yosei isen a*shi$i aisha ?@ rom enai, &las$a, .#.&., to Poro Point, #an /ernando, (a nion, Philippines, as evidenced *y %ill o (ading o. P=1 signed *ythe master o the vessel and issed on the date o departre.

On 1D May 19D>, or prior to its voyage, a time charter=party on the vessel M6 I#n PlmI prsant to the niorm:eneral Charter 2 !as entered into *et!een Mits*ishi as shippercharterer and as shipo!ner, in 'o$yo, 2apan.

iders to the aoresaid charter=party starting rom par. 1G to >; !ere attached to the pre=printed agreement. &ddenda os. 1, ", 3 and > to the charter=party !ere also s*seently entered into on the 18th, ";th, "1st and "Dtho May 19D>, respectively.

%eore loading the ertili)er a*oard the vessel, or ?>@ o her holds !ere all presma*ly inspected *y thecharterer0s representative and ond ft to ta$e a load o rea in *l$ prsant to par. 1G o the charter=party !hichreads

1G. . . . &t loading port, notice o readiness to *e accomplished *y certifcate rom ational Cargo%rea inspector or s*stitte appointed *y charterers or his accont certiying the vessel0s

readiness to receive cargo spaces. he vessels hold to be properly swept, cleaned and dried at thevessels e-pense and the vessel to be presented clean !or use in bulk to the satis!action o! theinspector be!ore daytime commences. ?emphasis spplied@

&ter the rea ertili)er !as loaded in *l$ *y stevedores hired *y and nder the spervision o the shipper, the steelhatches !ere closed !ith heavy iron lids, covered !ith three ?3@ layers o tarpalin, then tied !ith steel *onds. 'hehatches remained closed and tightly sealed throghot the entire voyage. 5

pon arrival o the vessel at her port o call on 3 2ly 19D>, the steel pontoon hatches !ere opened !ith the se o the vessel0s *oom. Petitioner nloaded the cargo rom the holds into its steel*odied dmp trc$s !hich !ere par$edalongside the *erth, sing metal scoops attached to the ship, prsant to the terms and conditions o the charter=partly ?!hich provided or an /.4.O.#. clase@. 3

'he hatches remained open throghot the dration o thedischarge. 7

7ach time a dmp trc$ !as flled p, its load o rea !as covered !ith tarpalin *eore it !as transported to theconsignee0s !arehose located some fty ?5;@ meters rom the !har. Mid!ay to the !arehose, the trc$s !eremade to pass throgh a !eighing scale !here they !ere individally !eighed or the prpose o ascertaining the net!eight o the cargo. 'he port area !as !indy, certain portions o the rote to the !arehose !ere sandy and the!eather !as varia*le, raining occasionally !hile the discharge !as in progress. 8 'he petitioner0s !arehose !asmade o corrgated galvani)ed iron ?:4@ sheets, !ith an opening at the ront !here the dmp trc$s entered andnloaded the ertili)er on the !arehose Boor. 'arpalins and :4 sheets !ere placed in=*et!een and alongside thetrc$s to contain spillages o the erili)er. 9

4t too$ eleven ?11@ days or PP4 to nload the cargo, rom 5 2ly to 18 2ly 19D> ?e-cept 2ly 1"th, 1>th and 18th@. 14 & private marine and cargo srveyor, Cargo #perintendents Company 4nc. ?C#C4@, !as hired *y PP4 to determine theIottrnI o the cargo shipped, *y ta$ing drat readings o the vessel prior to and ater discharge. 11 'he srveyreport s*mitted *y C#C4 to the consignee ?PP4@ dated 19 2ly 19D> revealed a shortage in the cargo o 1;G.D"G M'and that a portion o the rea ertili)er appro-imating 18 M' !as contaminated !ith dirt. 'he same reslts !ere

contained in a Certifcate o #hortage prepared *y PP4 !hich sho!ed that thecargo delivered !as indeed short o 9>.839 M' and a*ot "3 M' !ere rendered nft or commerce, having *eenpollted !ith sand, rst anddirt. 12

Conseently, PP4 sent a claim letter dated 18 to #oriamont #teamship &gencies ?##&@, the residentagent o the carrier, , or P">5,9G9.31 representing the cost o the alleged shortage in the goods shipped andthe dimintion in vale o that portion said to have *een contaminated !ith dirt. 1

espondent ##& e-plained that they !ere not a*le to respond to the consignee0s claim or payment *ecase,according to them, !hat they received !as st a reest or shortlanded certifcate and not a ormal claim, and thatthis IreestI !as denied *y them *ecase they Ihad nothing to do !ith the discharge o the shipment.I 1ence, on18 2ly 19D5, PP4 fled an action or damages !ith the Cort o /irst 4nstance o Manila. 'he deendant carrierarged that the strict p*lic policy governing common carriers does not apply to them *ecase they have *ecome

private carriers *y reason o the provisions o the charter=party. 'he cort a 6uo ho!ever sstained the claim o theplainti+ against the deendant carrier or the vale o the goods lost or damaged !hen it rled ths 15

. . . Prescinding rom the provision o the la! that a common carrier is presmed negligent in case o loss or damage o the goods it contracts to transport, all that a shipper has to do in a suit to recover !or loss or damage is to show receipt by the carrier o! the goods and to delivery by it o! less thanwhat it received. $!ter that, the burden o! proving that the loss or damage was due to any o! thecauses which e-empt him !rom liability is shipted to the carrier, common or private he may be . 7veni the provisions o the charter=party aoreoted are deemed valid, and the deendants consideredprivate carriers, it was still incumbent upon them to prove that the shortage or contaminationsustained by the cargo is attributable to the !ault or negligence on the part o! the shipper or consignee in the loading, stowing, trimming and discharge o! the cargo. 'his they ailed to do. %y this


11/74

omission, copled !ith their ailre to destroy the presmption o negligence against them, thedeendants are lia*le ?emphasis spplied@.

On appeal, respondent Cort o &ppeals reversed the lo!er cort and a*solved the carrier rom lia*ility or the valeo the cargo that !as lost or damaged. 13 elying on the 19G8 case o 7ome Insurance o. v. $merican 8teamship $gencies, Inc., 17 the appellate cort rled that the cargo vessel M6 I#n PlmI o!ned *y private respondent !as a private carrier and not a common carrier *y reason o the time charterer=party. &ccordingly, the Civil Codeprovisions on common carriers !hich set orth a presmption o negligence do not fnd application in the case at *ar.'hs H

. . . 4n the a*sence o sch presmption, it was incumbent upon the plainti9:appellee to adducesu9icient evidence to prove the negligence o! the de!endant carrier as alleged in its complaint. 4t isan old and !ell settled rle that i the plainti+, pon !hom rests the *rden o proving his case o action, ails to sho! in a satisactory manner the acts pon !hich he *ases his claim, the deendantis nder no o*ligation to prove his e-ception or deense ? 'oran, ommentaries on the ;ules o! ourt, 6olme G, p. ", citing %elen v. %elen, 13 Phil. ";"@.

%t, the record shows that the plainti9:appellee dismally !ailed to prove the basis o! its cause o! action, i.e. the alleged negligence o! de!endant carrier . 4t appears that the plainti+ !as nder theimpression that it did not have to esta*lish deendant0s negligence. %e that as it may, contrary to thetrial cort0s fnding, the record o the instant case discloses ample evidence sho!ing that deendantcarrier !as not negligent in perorming its o*ligation . . . 18 ?emphasis spplied@.

Petitioner PP4 appeals to s *y !ay o a petition or revie! assailing the decision o the Cort o &ppeals. Petitioner

theori)es that the 7ome Insurance case has no *earing on the present controversy *ecase the isse raised thereinis the validity o a stiplation in the charter=party delimiting the lia*ility o the shipo!ner or loss or damage to goodscase *y !ant o de deligence on its part or that o its manager to ma$e the vessel sea!orthy in all respects, andnot !hether the presmption o negligence provided nder the Civil Code applies only to common carriers and not toprivate carriers. 19

Petitioner rther arges that since the possession and control o the vessel remain !ith theshipo!ner, a*sent any stiplation to the contrary, sch shipo!ner shold made lia*le or the negligence o thecaptain and cre!. 4n fne, PP4 alts the appellate cort in not applying the presmption o negligence againstrespondent carrier, and instead shiting the onus probandi on the shipper to sho! !ant o de deligence on the parto the carrier, !hen he !as not even at hand to !itness !hat transpired dring the entire voyage.

&s earlier stated, the primordial isse here is !hether a common carrier *ecomes a private carrier *y reason o acharter=partyA in the negative, !hether the shipo!ner in the instant case !as a*le to prove that he had e-ercised thatdegree o diligence reired o him nder the la!.

4t is said that etymology is the *asis o relia*le dicial decisions in commercial cases. 'his *eing so, !e fnd it fttingto frst defne important terms !hich are relevant to or discssion.

& Icharter=partyI is defned as a contract *y !hich an entire ship, or some principal part thereo, is let *y the o!nerto another person or a specifed time or seA 24 a contract o a+reightment *y !hich the o!ner o a ship or other vessel lets the !hole or a part o her to a merchant or other person or the conveyance o goods, on a particlar voyage, in consideration o the payment o reightA 21 Charter parties are o t!o types ?a@ contract o a+reightment!hich involves the se o shipping space on vessels leased *y the o!ner in part or as a !hole, to carry goods orothersA and, ?*@ charter *y demise or *are*oat charter, *y the terms o !hich the !hole vessel is let to the charterer!ith a transer to him o its entire command and possession and conseent control over its navigation, inclding themaster and the cre!, !ho are his servants. Contract o a+reightment may either *e time charter, !herein the vesselis leased to the charterer or a f-ed period o time, or voyage charter, !herein the ship is leased or a single voyage. 22 4n *oth cases, the charter=party provides or the hire o vessel only, either or a determinate period o timeor or a single or consective voyage, the shipo!ner to spply the ship0s stores, pay or the !ages o the master and

the cre!, and deray the e-penses or the maintenance o the ship.

pon the other hand, the term Icommon or p*lic carrierI is defned in &rt. 1D3" o the Civil Code. 2 'he defnitione-tends to carriers either *y land, air or !ater !hich hold themselves ot as ready to engage in carrying goods ortransporting passengers or *oth or compensation as a p*lic employment and not as a casal occpation. 'hedistinction *et!een a Icommon or p*lic carrierI and a Iprivate or special carrierI lies in the character o the*siness, sch that i the nderta$ing is a single transaction, not a part o the general *siness or occpation,althogh involving the carriage o goods or a ee, the person or corporation o+ering sch service is a privatecarrier. 2

&rticle 1D33 o the e! Civil Code mandates that common carriers, *y reason o the natre o their *siness, sholdo*serve e-traordinary diligence in the vigilance over the goods they carry. 25 4n the case o private carriers, ho!ever,the e-ercise o ordinary diligence in the carriage o goods !ill s+ice. Moreover, in the case o loss, destrction ordeterioration o the goods, common carriers are presmed to have *een at alt or to have acted negligently, and the

*rden o proving other!ise rests on them. 23 On the contrary, no sch presmption applies to private carriers, or!hosoever alleges damage to or deterioration o the goods carried has the ons o proving that the case !as thenegligence o the carrier.

4t is not dispted that respondent carrier, in the ordinary corse o *siness, operates as a common carrier,transporting goods indiscriminately or all persons. hen petitioner chartered the vessel M6 I#n PlmI, the shipcaptain, its o+icers and compliment !ere nder the employ o the shipo!ner and thereore contined to *e nder itsdirect spervision and control. ardly then can !e charge the charterer, a stranger to the cre! and to the ship, !iththe dty o caring or his cargo !hen the charterer did not have any control o the means in doing so. 'his is evidentin the present case considering that the steering o the ship, the manning o the dec$s, the determination o thecorse o the voyage and other technical incidents o maritime navigation !ere all consigned to the o+icers and cre!!ho !ere screened, chosen and hired *y the shipo!ner. 27


12/74

4t is thereore imperative that a p*lic carrier shall remain as sch, not!ithstanding the charter o the !hole orportion o a vessel *y one or more persons, provided the charter is limited to the ship only, as in the case o a time=charter or voyage=charter. 4t is only !hen the charter incldes *oth the vessel and its cre!, as in a *are*oat ordemise that a common carrier *ecomes private, at least insoar as the particlar voyage covering the charter=party isconcerned. 4nd*ita*ly, a shipo!ner in a time or voyage charter retains possession and control o the ship, althoghher holds may, or the moment, *e the property o the charterer. 28

espondent carrier0s heavy reliance on the case o

7ome Insurance o. v. $merican 8teamship $gencies, supra, ismisplaced or the reason that the meat o the controversy therein !as the validity o a stiplation in the charter=partye-empting the shipo!ners rom lia*ility or loss de to the negligence o its agent, and not the e+ects o a special

charter on common carriers. &t any rate, the rle in the nited #tates that a ship chartered *y a single shipper tocarry special cargo is not a common carrier, 29 does not fnd application in or risdiction, or !e have o*served thatthe gro!ing concern or saety in the transportation o passengers and or carriage o goods *y sea reires a moree-acting interpretation o admiralty la!s, more particlarly, the rles governing common carriers.

e ote !ith approval the o*servations o aol Colinva-, the learned *arrister=at=la! 4 H

&s a matter o principle, it is di+iclt to fnd a valid distinction *et!een cases in !hich a ship is sedto convey the goods o one and o several persons. here the ship hersel is let to a charterer, so thathe ta$es over the charge and control o her, the case is di+erentA the shipo!ner is not then a carrier.%t !here her services only are let, the same gronds or imposing a strict responsi*ility e-ist,!hether he is employed *y one or many. 'he master and the cre! are in each case his servants, thereighter in each case is sally !ithot any representative on *oard the shipA the same opportnitiesor rad or collsion occrA and the same di+iclty in discovering the trth as to !hat has ta$en

place arises . . .

4n an action or recovery o damages against a common carrier on the goods shipped, the shipper or consigneeshold frst prove the act o shipment and its conseent loss or damage !hile the same !as in the possession,actal or constrctive, o the carrier. 'hereater, the *rden o proo shits to respondent to prove that he hase-ercised e-traordinary diligence reired *y la! or that the loss, damage or deterioration o the cargo !as de toortitos event, or some other circmstances inconsistent !ith its lia*ility. 1

'o or mind, respondent carrier has s+iciently overcome, *y clear and convincing proo, the prima !aciepresmptiono negligence.

'he master o the carrying vessel, Captain (ee 'ae %o, in his deposition ta$en on 19 &pril 19DD *eore the PhilippineConsl and (egal &ttache in the Philippine 7m*assy in 'o$yo, 2apan, testifed that *eore the ertili)er !as loaded,the or ?>@ hatches o the vessel !ere cleaned, dried and migated. &ter completing the loading o the cargo in*l$ in the ship0s holds, the steel pontoon hatches !ere closed and sealed !ith iron lids, then covered !ith three ?3@layers o servicea*le tarpalins !hich !ere tied !ith steel *onds. 'he hatches remained close and tightly sealed!hile the ship !as in transit as the !eight o the steel covers made it impossi*le or a person to open !ithot the seo the ship0s *oom. 2

4t !as also sho!n dring the trial that the hll o the vessel !as in good condition, oreclosing the possi*ility o spillage o the cargo into the sea or seepage o !ater inside the hll o the vessel.

hen M6 I#n PlmI doc$ed atits *erthing place, representatives o the consignee *oarded, and in the presence o a representative o theshipo!ner, the oreman, the stevedores, and a cargo srveyor representing C#C4, opened the hatches and inspectedthe condition o the hll o the vessel. 'he stevedores nloaded the cargo nder the !atchl eyes o the shipmates!ho !ere overseeing the !hole operation on rotation *asis.

6erily, the presmption o negligence on the part o the respondent carrier has *een e+icaciosly overcome *y thesho!ing o e-traordinary )eal and assidity e-ercised *y the carrier in the care o the cargo. 'his !as confrmed *yrespondent appellate cort ths H

. . . %e that as it may, contrary to the trial cort0s fnding, the record o! the instant case disclosesample evidence showing that de!endant carrier was not negligent in per!orming its obligations.Particlarly, the ollo!ing testimonies o plainti+=appellee0s o!n !itnesses clearly sho! a*sence o negligence *y the deendant carrierA that the hll o the vessel at the time o the discharge o thecargo !as sealed and no*ody cold open the same e-cept in the presence o the o!ner o the cargoand the representatives o the vessel ?'#, "; 2ly 19DD, p. 1>@A that the cover o the hatches !asmade o steel and it !as overlaid !ith tarpalins, three layers o tarpalins and thereore theircontents !ere protected rom the !eather ?'#, 5 &pril 19D8, p. ">@A and, that to open these hatches,the seals !old have to *e *ro$en, all the seals !ere ond to *e intact ?'#, "; 2ly 19DD, pp. 15=1G@?emphasis spplied@.

'he period dring !hich private respondent !as to o*serve the degree o diligence reired o it as a p*lic carrier*egan rom the time the cargo !as nconditionally placed in its charge ater the vessel0s holds !ere dly inspectedand passed scrtiny *y the shipper, p to and ntil the vessel reached its destination and its hll !as ree-amined *ythe consignee, *t prior to nloading. 'his is clear rom the limitation clase agreed pon *y the parties in the &ddendm to the standard I:7COI time charter=party !hich provided or an /.4.O.#., meaning, that the loading,sto!ing, trimming and discharge o the cargo !as to *e done *y the charterer, ree rom all ris$ and e-pense to thecarrier. 5 Moreover, a shipo!ner is lia*le or damage to the cargo reslting rom improper sto!age only !hen thesto!ing is done *y stevedores employed *y him, and thereore nder his control and spervision, not !hen the sameis done *y the consignee or stevedores nder the employ o the latter. 3

&rticle 1D3> o the e! Civil Code provides that common carriers are not responsi*le or the loss, destrction ordeterioration o the goods i cased *y the charterer o the goods or deects in the pac$aging or in the containers.'he Code o Commerce also provides that all losses and deterioration !hich the goods may s+er dring the


13/74

transportation *y reason o ortitos event, !orce ma)eure, or the inherent deect o the goods, shall *e or theaccont and ris$ o the shipper, and that proo o these accidents is incm*ent pon the carrier. 7 'he carrier,nonetheless, shall *e lia*le or the loss and damage reslting rom the preceding cases i it is proved, as againsthim, that they arose throgh his negligence or *y reason o his having ailed to ta$e the precations !hich sage hasesta*lished among carel persons. 8

espondent carrier presented a !itness !ho testifed on the characteristics o the ertili)er shipped and the e-pectedris$s o *l$ shipping. Mr. 7stanislao Chpngco, a chemical engineer !or$ing !ith &tlas /ertili)er, descri*ed reaas a chemical compond consisting mostly o ammonia and car*on mono-ide componds !hich are sed as ertili)er.rea also contains >GN nitrogen and is highly sol*le in !ater. o!ever, dring storage, nitrogen and ammonia do

not normally evaporate even on a long voyage, provided that the temperatre inside the hll does not e-ceed eighty?8;@ degrees centigrade. Mr. Chpngco rther added that in nloading ertili)er in *l$ !ith the se o a clampedshell, losses de to spillage dring sch operation amonting to one percent ?1N@ against the *ill o lading is deemedInormalI or Itolera*le.I 'he primary case o these spillages is the clamped shell !hich does not seal very tightly. &lso, the !ind tends to *lo! a!ay some o the materials dring the nloading process.

'he dissipation o antities o ertili)er, or its daterioration in vale, is cased either *y an e-tremely hightemperatre in its place o storage, or !hen it comes in contact !ith !ater. hen rea is drenched in !ater, eitherresh or saline, some o its particles dissolve. %t the salvaged portion !hich is in liid orm still remains potent andsa*le althogh no longer salea*le in its original mar$et vale.

'he pro*a*ility o the cargo *eing damaged or getting mi-ed or contaminated !ith oreign particles !as madegreater *y the act that the ertili)er !as transported in I*l$,I there*y e-posing it to the inimical e+ects o theelements and the grimy condition o the varios pieces o eipment sed in transporting and haling it.

'he evidence o respondent carrier also sho!ed that it !as highly impro*a*le or sea !ater to seep into the vessel0sholds dring the voyage since the hll o the vessel !as in good condition and her hatches !ere tightly closed andfrmly sealed, ma$ing the M6 I#n PlmI in all respects sea!orthy to carry the cargo she !as chartered or. 4 there!as loss or contamination o the cargo, it !as more li$ely to have occrred !hile the same !as *eing transportedrom the ship to the dmp trc$s and fnally to the consignee0s !arehose. 'his may *e gleaned rom the testimonyo the marine and cargo srveyor o C#C4 !ho spervised the nloading. e e-plained that the 18 M' o allegedI*ar order cargoI as contained in their report to PP4 !as st an appro-imation or estimate made *y them a!ter theertili)er !as discharged rom the vessel and segregated rom the rest o the cargo.

'he Cort notes that it !as in the month o 2ly !hen the vessel arrived port and nloaded her cargo. 4t rained romtime to time at the har*or area !hile the cargo !as *eing discharged according to the spply o+icer o PP4, !ho alsotestifed that it !as !indy at the !aterront and along the shoreline !here the dmp trc$s passed enrote to theconsignee0s !arehose.

4ndeed, !e agree !ith respondent carrier that *l$ shipment o highly sol*le goods li$e ertili)er carries !ith it theris$ o loss or damage. More so, !ith a varia*le !eather condition prevalent dring its nloading, as !as the case at*ar. 'his is a ris$ the shipper or the o!ner o the goods has to ace. Clearly, respondent carrier has s+icientlyproved the inherent character o the goods !hich ma$es it highly vlnera*le to deteriorationA as !ell as theinadeacy o its pac$aging !hich rther contri*ted to the loss. On the other hand, no proo !as addced *y thepetitioner sho!ing that the carrier !as remise in the e-ercise o de diligence in order to minimi)e the loss ordamage to the goods it carried.

77/O7, the petition is &I8'I888, !hich ordered petitioner to pay respondent, as s*rogee, theamont o P93,11".;; !ith legal interest, representing the vale o damaged cargo handled *y petitioner, "5Nthereo as attorney0s ees, and the cost o the sit.+=wphi+.n>t

'he acts are as ollo!s

Petitioner 6irgines Calvo is the o!ner o 'ransorient Container 'erminal #ervices, 4nc. ?'C'#4@, a sole proprietorshipcstoms *ro$er. &t the time material to this case, petitioner entered into a contract !ith #an Migel Corporation?#MC@ or the transer o 11> reels o semi=chemical Bting paper and 1"> reels o $rat liner *oard rom the Port &rea in Manila to #MC0s !arehose at the 'a*acalera Compond, omalde) #t., 7rmita, Manila. 'he cargo !asinsred *y respondent CP% :eneral 4nsrance Co., 4nc.


14/74

On 2ly 1>, 199;, the shipment in estion, contained in 3; metal vans, arrived in Manila on *oard IM6 aya$a!aMarI and, ater "> hors, !ere nloaded rom the vessel to the cstody o the arrastre operator, Manila Port#ervices, 4nc. /rom 2ly "3 to 2ly "5, 199;, petitioner, prsant to her contract !ith #MC, !ithdre! the cargo romthe arrastre operator and delivered it to #MC0s !arehose in 7rmita, Manila. On 2ly "5, 199;, the goods !ereinspected *y Marine Cargo #rveyors, !ho ond that 15 reels o the semi=chemical Bting paper !ereI!etstainedtornI and 3 reels o $rat liner *oard !ere li$e!ise torn. 'he damage !as placed at P93,11".;;.

#MC collected payment rom respondent CP% nder its insrance contract or the aorementioned amont. 4n trn,respondent, as s*rogee o #MC, *roght sit against petitioner in the egional 'rial Cort, %ranch 1>8, Ma$ati City,!hich, on

'he decision !as a+irmed *y the Cort o &ppeals on appeal. ence this petition or revie! on certiorari.

Petitioner contends that

4. '7 CO' O/ &PP7&(# COMM4''7< #74O# &< 767#4%(7 7O L4


15/74

ordinary diligence in the vigilance over the goods transported *y her, !old reire.G Conseently, any damage tothe cargo she agrees to transport cannot *e presmed to have *een de to her alt or negligence.

Petitioner contends that contrary to the fndings o the trial cort and the Cort o &ppeals, she is not a commoncarrier *t a private carrier *ecase, as a cstoms *ro$er and !arehoseman, she does not indiscriminately hold herservices ot to the p*lic *t only o+ers the same to select parties !ith !hom she may contract in the condct o her*siness.

'he contention has no merit. 4n &e 0u1man v. ourt o! $ppeals,D the Cort dismissed a similar contention and heldthe party to *e a common carrier, ths =

'he Civil Code defnes Icommon carriersI in the ollo!ing terms

I&rticle 1D3". Common carriers are persons, corporations, frms or associations engaged in the *siness ocarrying or transporting passengers or goods or *oth, *y land, !ater, or air or compensation, o+ering theirservices to the p*lic.I

'he a*ove article ma$es no distinction *et!een one !hose principal *siness activity is the carrying opersons or goods or *oth, and one !ho does sch carrying only as an ancillary activity . . . &rticle 1D3" alsocarelly avoids ma$ing any distinction *et!een a person or enterprise o+ering transportation service onaregular or scheduled basis and one o+ering sch service on an occasional, episodic or unscheduledbasis.either does &rticle 1D3" distingish *et!een a carrier o+ering its services to the Igeneral public,I i.e.,the general commnity or poplation, and one !ho o+ers services or solicits *siness only rom anarro!segment o the general poplation. e thin$ that &rticle 1D3" deli*erately rerained rom ma$ingsch distinctions.

#o nderstood, the concept o Icommon carrierI nder &rticle 1D3" may *e seen to coincide neatly !ith thenotion o Ip*lic service,I nder the P*lic #ervice &ct ?Common!ealth &ct o. 1>1G, as amended@ !hich atleast partially spplements the la! on common carriers set orth in the Civil Code. nder #ection 13,paragraph ?*@ o the P*lic #ervice &ct, Ip*lic serviceI incldes

I - - - every person that no! or hereater may o!n, operate, manage, or control in the Philippines,or hire or compensation, with general or limited clientele, whether permanent, occasional oraccidental, and done !or general business purposes, any common carrier, railroad, street rail!ay,traction rail!ay, s*!ay motor vehicle, either or reight or passenger, or *oth, !ith or !ithot f-edrote and !hatever may *e its classifcation, reight or carrier service o any class, e-press service,steam*oat, or steamship line, pontines, erries and !ater crat, engaged in the transportation o

passengers or reight or *oth, shipyard, marine repair shop, !har or doc$, ice plant, ice=rerigerationplant, canal, irrigation system, gas, electric light, heat and po!er, !ater spply and po!er petrolem,se!erage system, !ire or !ireless commnications systems, !ire or !ireless *roadcasting stationsand other similar p*lic services. - - -I 8

'here is greater reason or holding petitioner to *e a common carrier *ecase the transportation o goods is anintegral part o her *siness. 'o phold petitioner0s contention !old *e to deprive those !ith !hom she contractsthe protection !hich the la! a+ords them not!ithstanding the act that the o*ligation to carry goods or hercstomers, as already noted, is part and parcel o petitioner0s *siness.

o!, as to petitioner0s lia*ility, &rt. 1D33 o the Civil Code provides

Common carriers, rom the natre o their *siness and or reasons o p*lic policy, are *ond to o*servee-traordinary diligence in the vigilance over the goods and or the saety o the passengers transported *y

them, according to all the circmstances o each case. . . .

4n ompania 'aritima v. ourt o! $ppeals,9 the meaning o Ie-traordinary diligence in the vigilance over goodsI !ase-plained ths

'he e-traordinary diligence in the vigilance over the goods tendered or shipment reires the commoncarrier to $no! and to ollo! the reired precation or avoiding damage to, or destrction o the goodsentrsted to it or sale, carriage and delivery. 4t reires common carriers to render service !ith the greatests$ill and oresight and Ito se all reasona*le means to ascertain the natre and characteristic o goodstendered or shipment, and to e-ercise de care in the handling and sto!age, inclding sch methods astheir natre reires.I

4n the case at *ar, petitioner denies lia*ility or the damage to the cargo. #he claims that the Ispoilage or !ettageItoo$ place !hile the goods !ere in the cstody o either the carrying vessel IM6 aya$a!a Mar,I !hichtransported the cargo to Manila, or the arrastre operator, to !hom the goods !ere nloaded and !ho allegedly $eptthem in open air or nine days rom 2ly 1> to 2ly "3, 1998 not!ithstanding the act that some o the containers!ere deormed, crac$ed, or other!ise damaged, as noted in the Marine #rvey eport ?7-h. @, to !it

M&Q=";G"88; = rain gtter deormedcrac$ed

4C#=3G3>G1=3 = let side r**er gas$et on door distortedpartly loose

P7=";>";9=> = !ith pinholes on roo panel right portion

'O(="13GD>=3 = !ood Booring !eLt andor !ith signs o !ater soa$ed


16/74

M&Q=";1>;G=; = !ith dentcrac$ on roo panel

4C#=>1"1;5=; = r**er gas$et on let sidedoor panel partly detached loosened.1;

4n addition, petitioner claims that Marine Cargo #rveyor 7rnesto 'olentino testifed that he has no personal$no!ledge on !hether the container vans !ere frst stored in petitioner0s !arehose prior to their delivery to theconsignee. #he li$e!ise claims that ater !ithdra!ing the container vans rom the arrastre operator, her driver,icardo a)arro, immediately delivered the cargo to #MC0s !arehose in 7rmita, Manila, !hich is a mere thirty=minte drive rom the Port &rea !here the cargo came rom. 'hs, the damage to the cargo cold not have ta$enplace !hile these !ere in her cstody.11

Contrary to petitioner0s assertion, the #rvey eport ?7-h. @ o the Marine Cargo #rveyors indicates that !hen theshipper transerred the cargo in estion to the arrastre operator, these !ere covered *y clean 7ipment4nterchange eport ?74@ and, !hen petitioner0s employees !ithdre! the cargo rom the arrastre operator, they didso !ithot e-ception or protest either !ith regard to the condition o container vans or their contents. 'he #rveyeport pertinently reads ==

?>@, !hich provides ==

Common carriers are responsi*le or the loss, destrction, or deterioration o the goods, nless the same isde to any o the ollo!ing cases only

. . . .

?>@ 'he character o the goods or deects in the pac$ing or in the containers.

. . . .

/or this provision to apply, the rle is that i the improper pac$ing or, in this case, the deects in the container, isare$no!n to the carrier or his employees or apparent pon ordinary o*servation, *t he nevertheless accepts the same!ithot protest or e-ception not!ithstanding sch condition, he is not relieved o lia*ility or damage resltingthererom.1> 4n this case, petitioner accepted the cargo !ithot e-ception despite the apparent deects in some o thecontainer vans. ence, or ailre o petitioner to prove that she e-ercised e-traordinary diligence in the carriage ogoods in this case or that she is e-empt rom lia*ility, the presmption o negligence as provided nder &rt.1D3515 holds.


17/74

77/O7, the decision o the Cort o &ppeals, dated May 31, ";;1, is &//4M7 private respondent ord or the orld Christian /ello!ship 4nc. ?C/@ arranged !ithpetitioners or the transportation o 33 mem*ers o its Kong &dlts Ministry rom Manila to (a nion and *ac$ inconsideration o !hich private respondent paid petitioners the amont o P3,;;;.;;.

'he grop !as schedled to leave on ovem*er ", 198>, at 5;; ocloc$ in the aternoon. o!ever, as severalmem*ers o the party !ere late, the *s did not leave the 'ropical t at the corner o Ortigas &vene and 7. On the *asis o their fnding theyfled a criminal complaint against the driver, Porfrio Ca*il. 'he case !as later fled !ith the (ingayen egional 'rialCort. Petitioners /a*re paid 2ess 7scano P1,5;;.;; or the damage to the latters ence. On the *asis o 7scanosa+idavit o desistance the case against petitioners /a*re !as dismissed.

&myline &ntonio, !ho !as seriosly inred, *roght this case in the 'C o Ma$ati, Metro Manila. &s a reslt o the accident, she is no! s+ering rom paraplegia and is permanently paraly)ed rom the !aist do!n. @ P";,;;;.;; as e-emplary damagesA and

http://sc.judiciary.gov.ph/jurisprudence/1996/jul1996/111127.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/1996/jul1996/111127.htm#_edn2


18/74

5@ "5N o the recovera*le amont as attorneys eesA

G@ Costs o sit.

#O O that the vehicles passing on

that portion o the road shold only *e rnning "; $ilometers per hor, so that at 5; $ilometers per hor, Ca*il !asrnning at a very high speed.

Considering the oregoing the act that it !as raining and the road !as slippery, that it !as dar$, that he drovehis *s at 5; $ilometers an hor !hen even on a good day the normal speed !as only "; $ilometers an hor, and thathe !as namiliar !ith the terrain, Ca*il !as grossly negligent and shold *e held lia*le or the inries s+ered *yprivate respondent &myline &ntonio.

Prsant to &rts. "1DG and "18; o the Civil Code his negligence gave rise to the presmption that hisemployers, the /a*res, !ere themselves negligent in the selection and spervision o their employee.


19/74

f-ed. 7ven i it had *een, the delay did not *ear directly on the case o the accident. ith respect to the secondcontention, it !as held in an early case that

L& person !ho hires a p*lic atomo*ile and gives the driver directions as to the place to !hich he !ishes to *econveyed, *t e-ercises no other control over the condct o the driver, is not responsi*le or acts o negligence othe latter or prevented rom recovering or inries s+ered rom a collision *et!een the atomo*ile and a train,cased *y the negligence either o the locomotive engineer or the atomo*ile driver. L9

&s already stated, this case actally involves a contract o carriage. Petitioners, the /a*res, did not have to *eengaged in the *siness o p*lic transportation or the provisions o the Civil Code on common carriers to apply to

them. &s this Cort has heldL1;

&rt. 1D3". Common carriers are persons, corporations, frms or associations engaged in the *siness o carrying ortransporting passengers or goods or *oth, *y land, !ater, or air or compensation, o+ering their services to thep*lic.

'he a*ove article ma$es no distinction *et!een one !hose principal *siness activity is the carrying o personsor goods or *oth, and one !ho does sch carrying only as an ancillary activity ?in local idiom, as a sideline@. &rticle1D3" also carelly avoids ma$ing any distinction *et!een a person or enterprise o+ering transportation service on areglar or schedled *asis and one o+ering sch service on an occasional, episodic or nschedled *asis. eitherdoes &rticle 1D3" distingish *et!een a carrier o+ering its services to the general p*lic, i.e., the general commnityor poplation, and one !ho o+ers services or solicits *siness only rom a narro! segment o the generalpoplation. e thin$ that &rticle 1D3" deli*erately rerained rom ma$ing sch distinctions.

&s common carriers, the /a*res !ere *ond to e-ercise e-traordinary diligence or the sae transportation o thepassengers to their destination. 'his dty o care is not e-csed *y proo that they e-ercised the diligence o a goodather o the amily in the selection and spervision o their employee. &s &rt. 1D59 o the Code provides

Common carriers are lia*le or the death o or inries to passengers throgh the negligence or !ill acts o theormers employees, althogh sch employees may have acted *eyond the scope o their athority or in violation o the orders o the common carriers.

'his lia*ility o the common carriers does not cease pon proo that they e-ercised all the diligence o a goodather o a amily in the selection and spervision o their employees.

'he same circmstances detailed a*ove, spporting the fnding o the trial cort and o the appellate cort thatpetitioners are lia*le nder &rts. "1DG and "18; or 6uasi delict, lly stiy fnding them gilty o *reach o contracto carriage nder &rts. 1D33, 1D55 and 1D59 o the Civil Code.

#econdly, !e sstain the a!ard o damages in avor o &myline &ntonio. o!ever, !e thin$ the Cort o &ppeals

erred in increasing the amont o compensatory damages *ecase private respondents did not estion this a!ard asinadeate.L11 'o the contrary, the a!ard o P5;;,;;;.;; or compensatory damages !hich the egional 'rial Cortmade is reasona*le considering the contingent natre o her income as a casal employee o a company and asdistri*tor o *eaty prodcts and the act that the possi*ility that she might *e a*le to !or$ again has not *eenoreclosed. 4n act she testifed that one o her previos employers had e-pressed !illingness to employ her again.

ith respect to the other a!ards, !hile the decisions o the trial cort and the Cort o &ppeals do nots+iciently indicate the actal and legal *asis or them, !e fnd that they are nevertheless spported *y evidence inthe records o this case. 6ie!ed as an action or 6uasi delict, this case alls sarely !ithin the prvie! o &rt.""19?"@ providing or the payment o moral damages in cases o 6uasi delict. On the theory that petitioners are lia*leor *reach o contract o carriage, the a!ard o moral damages is athori)ed *y &rt. 1DG>, in relation to &rt. """;,since Ca*ils gross negligence amonted to *ad aith. L1" &myline &ntonios testimony, as !ell as the testimonies o herather and co=passengers, lly esta*lish the physical s+ering and mental angish she endred as a reslt o theinries cased *y petitioners negligence.

'he a!ard o e-emplary damages and attorneys ees !as also properly made. o!ever, or the same reason thatit !as error or the appellate cort to increase the a!ard o compensatory damages, !e hold that it !as also erroror it to increase the a!ard o moral damages and redce the a!ard o attorneys ees, inasmch as privaterespondents, in !hose avor the a!ards !ere made, have not appealed.L13

&s a*ove stated, the decision o the Cort o &ppeals can *e sstained either on the theory o 6uasi delict or onthat o *reach o contract. 'he estion is !hether, as the t!o corts *elo! held, petitioners, !ho are the o!nersand driver o the *s, may *e made to respond ointly and severally to private respondent. e hold that they may*e. 4n &angwa rans. o. Inc. v. ourt o! $ppeals,L1> on acts similar to those in this case, this Cort held the *scompany and the driver ointly and severally lia*le or damages or inries s+ered *y a passenger. &gain,in Bachelor


20/74

4t is tre that in Philippine ;abbit Bus 2ines, Inc. v. ourt o! $ppeals L"1 this Cort e-onerated the eepney driverrom lia*ility to the inred passengers and their amilies !hile holding the o!ners o the eepney ointly andseverally lia*le, *t that is *ecase that case !as e-pressly tried and decided e-clsively on the theory o culpacontractual. &s this Cort there e-plained

'he trial cort !as thereore right in fnding that Manalo Lthe driver and sposes Mangne and Carreon Lthe eepney o!ners !ere negligent. o!ever, its rling that sposes Mangne and Carreon are ointly and severallylia*le !ith Manalo is erroneos. 'he driver cannot *e held ointly and severally lia*le !ith the carrier in case o*reach o the contract o carriage. 'he rationale *ehind this is readily discerni*le. /irstly, the contract o carriage is*et!een the carrier and the passenger, and in the event o contractal lia*ility, the carrier is e-clsively responsi*le

thereore to the passenger, even i sch *reach *e de to the negligence o his driver ?see 6ilan v. 'he Cort o &ppeals, et al., :.. os. (="1>DD=81, &pril "9, 19GG, 1G #C& D>"@ . . .L""

&s in the case o B2B, private respondents in this case and her co=plainti+s did not sta$e ot their claim againstthe carrier and the driver e-clsively on one theory, mch less on that o *reach o contract alone. &ter all, it !aspermitted or them to allege alternative cases o action and oin as many parties as may *e lia*le on sch cases o actionL"3 so long as private respondent and her co=plainti+s do not recover t!ice or the same inry. hat is clearrom the cases is the intent o the plainti+ there to recover rom *oth the carrier and the driver, ths stiying theholding that the carrier and the driver !ere ointly and severally lia*le *ecase their separate and distinct actsconcrred to prodce the same inry.

WHR'OR, the decision o the Cort o &ppeals is &//4M7< !ith MO and 91=>9G, respectively creating thePrealifcation %ids and &!ards Committee ?P%&C@ and the 'echnical Committee.

&ter its constittion, the P%&C issed gidelines or the prealifcation o contractors or the fnancing andimplementation o the proect 'he notice, advertising the prealifcation o *idders, !as p*lished in threene!spapers o general circlation once a !ee$ or three consective !ee$s starting /e*rary "1, 1991.

http://sc.judiciary.gov.ph/jurisprudence/1996/jul1996/111127.htm#_edn22http://sc.judiciary.gov.ph/jurisprudence/1996/jul1996/111127.htm#_edn23http://sc.judiciary.gov.ph/jurisprudence/1996/jul1996/111127.htm#_edn24http://sc.judiciary.gov.ph/jurisprudence/1996/jul1996/111127.htm#_edn22http://sc.judiciary.gov.ph/jurisprudence/1996/jul1996/111127.htm#_edn23http://sc.judiciary.gov.ph/jurisprudence/1996/jul1996/111127.htm#_edn24


21/74

'he deadline set or s*mission o prealifcation docments !as March "1, 1991, later e-tended to &pril 1, 1991./ive grops responded to the invitation namely, &%% 'ra)ione o 4taly, ope!ell oldings (td. o ong$ong,Mansteel 4nternational o Mandae, Ce*, Mitsi S Co., (td. o 2apan, and 7G@. 'he (egal &spects reerred to provided that the %O'%' contractor=applicant meet the reirements specifed in theConstittion and other pertinent la!s ? ;ollo, p. 11>@.

#*seently, #ecretary Or*os !as appointed 7-ective #ecretary to the President o the Philippines and !asreplaced *y #ecretary Pete icomedes Prado. 'he latter sent to President &ino t!o letters dated May 31, 1991 and

2ne 1>, 1991, respectively recommending the a!ard o the 7?*@ o the 4mplementing les and eglations o the %O' (a! ? ;ollo, pp. "98=3;"@.

4n 2ly 1991, 7-ective #ecretary Or*os, acting on instrctions o the President, issed a directive to the o the 4mplementing les and eglations o the %O'(a! !hich athori)ed negotiated a!ard o contract in addition to p*lic *idding !as o do*tl legalityA and ?>@ thatcongressional approval o the list o priority proects nder the %O' or %' #cheme provided in the la! had not yet*een granted at the time the contract !as a!arded ? ;ollo, pp. 1D8=1D9@.

4n vie! o the comments o 7-ective #ecretary .1A ;ollo, p. 58@. 'arget completion date is 1,;8; days orappro-imately three years rom the implementation date o the contract inclsive o mo*ili)ation, site !or$s, initialand fnal testing o the system ?#pplemental &greement, #ec. 5A ;ollo, p. 83@. pon ll or partial completion and via*ility thereo, private respondent shall deliver the se and possession o the completed portion to


22/74

?evised and estated &greement, #ec. 1, p. 5A ;ollo, p. 5>@. &ter "5 years and . 'he la! e-pressly recogni)es%(' scheme and allo!s direct negotiation o %(' contracts.

44

4n their petition, petitioners arged that

?1@ '7 &:77M7' O/ &P4( "", 199", &M7, !hich provides or direct negotiation as a mode o a!ard o inrastrctre proects.

444

espondents claimed that petitioners had no legal standing to initiate the instant action. Petitioners, ho!ever,contered that the action !as fled *y them in their capacity as #enators and as ta-payers.

'he prevailing doctrines in ta-payer0s sits are to allo! ta-payers to estion contracts entered into *y the national

government or government=o!ned or controlled corporations allegedly in contravention o the la! ?ilos*ayan, 4nc. v.:ingona, "3" #C& 11; L199>@ and to disallo! the same !hen only mnicipal contracts are involved ?%gnayConstrction and


23/74

?1@ the 7> Phil. 551, 55D 558 L19"3@.

'he Constittion, in no ncertain terms, reires a ranchise or the operation o a p*lic tility. o!ever, it does notreire a ranchise *eore one can o!n the acilities needed to operate a p*lic tility so long as it does not operatethem to serve the p*lic.

#ection 11 o &rticle Q44 o the Constittion provides

o ranchise, certifcate or any other orm o athori)ation or the operation o! a public utility shall

*e granted e-cept to citi)ens o the Philippines or to corporations or associations organi)ed nder thela!s o the Philippines at least si-ty per centum o !hose capital is o!ned *y sch citi)ens, nor shallsch ranchise, certifcate or athori)ation *e e-clsive character or or a longer period than fty years . . . ?7mphasis spplied@.

4n la!, there is a clear distinction *et!een the IoperationI o a p*lic tility and the o!nership o the acilities andeipment sed to serve the p*lic.

O!nership is defned as a relation in la! *y virte o !hich a thing pertaining to one person is completely s*ectedto his !ill in everything not prohi*ited *y la! or the concrrence !ith the rights o another ?'olentino, 44Commentaries and 2risprdence on the Civil Code o the Philippines >5 L199"@.

'he e-ercise o the rights encompassed in o!nership is limited *y la! so that a property cannot *e operated andsed to serve the p*lic as a p*lic tility nless the operator has a ranchise. 'he operation o a rail system as a

p*lic tility incldes the transportation o passengers rom one point to another point, their loading and nloadingat designated places and the movement o the trains at pre=schedled times ?c!. &ri)ona 7astern .. Co. v. 2.&..Matthe!s, "; &ri) "8", 18; P.159, D &.(.. 11>9 L1919 Anited #tates /ire 4ns. Co. v. orthern P.. Co., 3;

transpo midterms

Documents