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Transcript of Transpo Set 2 Doctrines
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Concept of Common Carrier
No. L-47822. December 22, 1988.*
PEDRO DE GUZMAN, petitioner, vs.COURT OF APPEALS and
ERNESTO CENDAA, respondents.
Common Carriers; Definition of; Art. 1732 of the Civil Codemakes no distinctions between a person or enterprise offering
transportation service on a regular or scheduled basis and such
service on an occasional, episodic or unscheduled basis.The Civil
Code defines common carriers in the following terms: Article
1732. Common carriers are persons, corporations, firms, or
associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air for
compensation, offering their services to the public. The above
article makes no distinction between one whoseprincipal business
activity is the carrying of persons or goods or both, and one who
does such carrying only as an ancillaryactivity (in local idiom, as a
sideline). Article 1732 also carefully avoids making any distinction
between a person or enterprise offering transportation service on
a regular or scheduledbasis and one offering such service on
an occasional, episodic or unscheduled basis. Neither does Article
1732 distinguish between a carrier offering its services to the
general public, i.e., the general community or population, and
one who offers services or solicits business only from a
narrow segment of the general population. We think that Article
1733 deliberately refrained from making such distinctions.
Same; Same; Same; The concept of common carrier under
Art. 1732 coincides with the notion of Public Service under the
Public Service Act (CA No. 1416).So understood, the concept of
common carrier under Article 1732 may be seen to coincide
neatly with the notion of public service, under the Public Service
Act (Commonwealth Act No. 1416, as amended) which at least
partially supplements the law on common carriers set forth in the
Civil Code. Under Section 13, paragraph (b) of the Public ServiceAct, public service includes: x x x every person that now or
hereafter may own, operate, manage, or control in the Philippines,
for hire or compensation, with general or limited clientele, whether
permanent, occasional or accidental, and done for general business
purposes, any common carrier, railroad, street railway, traction
railway, subway motor vehicle, either for freight or passenger, or
both, with or without fixed route and whatever may be its
classification, freight or carrier service of any class, expressservice, steamboat, or steamship line, pontines, ferries and water
craft, engaged in the transportation of passengers or freight or
both, shipyard, marine repair shop, wharf or dock, ice plant, ice-
refrigeration plant, canal, irrigation system, gas, electric light, heat
and power, water supply and power petroleum, sewerage system,
wire or wireless communications systems, wire or wireless
broadcasting stations and other similar public services. x x x.
Same; Same; Same; Same; A certificate of public convenience
is not a requisite for the incurring of liability under the Civil Code
provisions governing common carriers.The Court of Appeals
referred to the fact that private respondent held no certificate of
public convenience, and concluded he was not a common carrier.
This is palpable error. A certificate of public convenience is not a
requisite for the incurring of liability under the Civil Code provisions
governing common carriers. That liability arises the moment a
person or firm acts as a common carrier, without regard to whether
or not such carrier has also complied with the requirements of the
applicable regulatory statute and implementing regulations and has
been granted a certificate of public convenience or other franchise.
To exempt private respondent from the liabilities of a common
carrier because he has not secured the necessary certificate of
public convenience, would be offensive to sound public policy; that
would be to reward private respondent precisely for failing to
comply with applicable statutory requirements. The business of a
common carrier impinges directly and intimately upon the safety
and well being and property of those members of the general
community who happen to deal with such carrier. The law imposes
duties and liabilities upon common carriers for the safety andprotection of those who utilize their services and the law cannot
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allow a common carrier to render such duties and liabilities merely
facultative by simply failing to obtain the necessary permits and
authorizations.
Same; Same; Same; Liability of common carriers in case of
loss, destruction or deterioration or destruction of goods they
carry; Extraordinary diligence, required; Exceptions.Common
carriers, by the nature of their business and for reasons of publicpolicy, are held to a very high degree of care and diligence
(extraordinary diligence) in the carriage of goods as well as of
passengers. The specific import of extraordinary diligence in the
care of goods transported by a common carrier is, according to
Article 1733, further expressed in Articles 1734, 1735 and 1745,
numbers 5, 6 and 7 of the Civil Code. Article 1734 establishes the
general rule that common carriers are responsible for the loss,
destruction or deterioration of the goods which they carry,
unless the same is due to any of the following causes only: (1)
Flood, storm, earthquake, lightning, or other natural disaster or
calamity; (2) Act of the public enemy in war, whether international
or civil; (3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the
containers; and (5) Order or act of competent public authority. It
is important to point out that the above list of causes of loss,
destruction or deterioration which exempt the common carrier for
responsibility therefor, is a closed list. Causes falling outside the
foregoing list, even if they appear to constitute a species of force
majeure, fall within the scope of Article 1735.
Same; Same; Same; Same; Same; The hijacking of the
carriers truck does not fall within any of the five (5) categories of
exempting causes in Art. 1734.Applying the above-quoted
Articles 1734 and 1735, we note firstly that the specific cause
alleged in the instant casethe hijacking of the carriers truck
does not fall within any of the five (5) categories of exempting
causes listed in Article 1734. It would follow, therefore, that the
hijacking of the carriers vehicle must be dealt with under the
provisions of Article 1735, in other words, that the privaterespondent as common carrier is presumed to have been at fault or
to have acted negligently. This presumption, however, may be
overthrown by proof of extraordinary diligence on the part of
private respondent.
Same; Same; Same; Same; Same; Under Art. 1745(6), a
common carrier is held responsible even for acts of strangers like
thieves or robbers except where such thieves or robbers acted
with grave or irresistible threat, violence or force.As notedearlier, the duty of extraordinary diligence in the vigilance over
goods is, under Article 1733, given additional specification not only
by Articles 1734 and 1735 but also by Article 1745, numbers 4, 5
and 6. Article 1745 provides in relevant part: Any of the following
or similar stipulations shall be considered unreasonable, unjust and
contrary to public policy: xxx xxx xxx (5) that the common carrier
shall not be responsible for the acts or omissions of his or its
employees; (6) that the common carriers liability for acts
committed by thieves, orof robberswho do not act with grave or
irresistible threat, violence or force, is dispensed with or
diminished; and (7) that the common carrier shall not responsible
for the loss, destruction or deterioration of goods on account of the
defective condition of the car, vehicle, ship, airplane or other
equipment used in the contract of carriage. Under Article 1745 (6)
above, a common carrier is held responsible and will not be allowed
to divest or to diminish such responsibilityeven for acts of
strangers like thieves or robbers, except where such thieves or
robbers in fact acted with grave or irresistible threat, violence or
force. We believe and so hold that the limits of the duty of
extraordinary diligence in the vigilance over the goods carried are
reached where the goods are lost as a result of a robbery which is
attended by grave or irresistible threat, violence or force.
Same; Same; Same; Same; Same; Common carriers are not
made absolute insurers against all risks of travel and of transport
of goods and are not liable for fortuitous events; Case at bar.In
these circumstances, we hold that the occurrence of the loss must
reasonably be regarded as quite beyond the control of the common
carrier and properly regarded as a fortuitous event. It is necessaryto recall that even common carriers are not made absolute insurers
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against all risks of travel and of transport of goods, and are not
held liable for acts or events which cannot be foreseen or are
inevitable, provided that they shall have complied with the rigorous
standard of extraordinary diligence. We, therefore, agree with the
result reached by the Court of Appeals that private respondent
Cendaa is not liable for the value of the undelivered merchandise
which was lost because of an event entirely beyond privaterespondents control.
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Characteristics
[No. 8095. November 5, 1914, and March 31, 1915.]
F C. FISHER, plaintiff, vs.YANGCO STEAMSHIP COMPANY, J.
S. STANLEY, as Acting Collector of Customs of the Philippine
Islands, IGNACIO VILLAMOR, as AttorneyGeneral of the
Philippine Islands, and W. H. BISHOP, as prosecutingattorney of the city of Manila, respondents.
1.1.COMMON CARRIERS; PREFERENCES ANDDISCRIMINATIONS.Whatever may have been the rule at
common law, common carriers in this jurisdiction cannot
lawf ully decline to accept a particular class of goods for
carriage to the prejudice of the traffic in those goods
unless it appears that for some sufficient reason the
discrimination against the traffic in such goods is
reasonable and necessary. Mere prejudice or whim will not
suffice. The grounds of the discrimination must be
substantial ones, such as will justify the courts in holding
the discrimination to have been reasonable and necessary
under all the circumstances of the case.
1.2.ID.; ID.; PENAL PROVISIONS OF ACT No. 98.Thepenalties prescribed for violations of Act No. 98 of the
Philippine Commission are neither excessive nor cruel and
unusual in the sense in which those words are used in the
organic legislation in force in the Islands.
1.3.ID. ; ID. ; ID.There is nothing in that statute whichwould deprive any person of his liberty "by requiring him
to engage in business against his will." The prohibition of
the statute against undue, unnecessary, or unreasonable
preferences and discriminations are merely the reasonable
regulations which the legislator has seen fit to prescribe for
the conduct of the business in which the carrier is engagedof his own free will and accord.
1.4.ID.; CONTROL AND REGULATION OF CARRIERS,Thenature of the business of a common carrier as a public
employment is such that it is clearly within the power of
the state to impose such just and reasonable regulations
thereon in the interest of the public as the legislator may
deem proper. Of course such regulations must not have
the effect of depriving an owner of his property withoutdue course of law, nor of confiscating or appropriating
private property without just compensation, nor of limiting
or prescribing irrevocably vested rights or privileges
lawfully acquired under a charter or franchise. But aside
from such constitutional limitations, the determination of
the nature and extent of the regulations which should be
prescribed rests in the hands of the legislator.
1.5.ID. ; ID.The right to enter the public employment as acommon carrier and to offer one's services to the public for
hire does not carry with it the right to conduct that
business as one pleases, without regard to the interests of
the public, and free from such reasonable and just
regulations as may be prescribed for the protection of the
public from the reckless or careless indifference of the
carrier as to the public welfare and for the prevention of
unjust and unreasonable discriminations of any kind
whatsoever in the performance of the carrier's duties as a
servant of the public.
1.6.ID.; ID.; JUDICIAL INTERFERENCE.The judiciary oughtnot to interfere with such regulations established under
legislative sanction unless they are so plainly and palpably
unreasonable as to make their enforcement equivalent to
the taking of property for public use without such
compensation as under all the circumstances is just both
to the owner and to the public; that is, judicial interference
should never occur unless the case presents, clearly andbeyond all doubt, such a flagrant attack upon the rights of
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property under the guise of regulations as to compel the
court to say that the regulations in question will have the
effect to deny just compensation for private property taken
for the public use.
1.7.ID. ; ID.When one devotes his property to a use inwhich the public has an interest, he, in effect, grants to thepublic an interest in that use and must submit to be
controlled by the public for the common good to the extent
of the interest he has thus created. He may withdraw his
grant by discontinuing the use, but so long as he maintains
the use he must submit to control,
1.8.ID. ; ID. ; EXERCISE OF POWER THROUGH BOARDS OFCOMMISSIONERS.So far beyond question is this right of
regulation that it is -well settled that the power of the
state to exercise legislative control over railroad companies
and other common carriers "in all respects necessary to
protect the public against danger, injustice and
oppression" may be exercised through boards of
commissioners.
1.9.ID.; ID.; ACT No. 98; STATUTORY PROVISIONS.Correctly construed,the provisions of the Philippine statute
(Act No. 98) do not force a common carrier to engage in
any business against his will or to make use of his facilitiesin a manner or for a purpose for which they are not
reasonably adapted. It is only when he offers his facilities
as a common carrier to the public for hire, that the statute
steps in and prescribes that he must treat all alike, that he
may not pick and choose which customer he will serve,
and, specifically, that he shall not make any undue or
unreasonable preferences or discriminations whatsoever to
the prejudice not only of any person or locality, but also of
any particular kind of traffic.
1.10.ID.; PREFERENCES ANDDISCRIMINATIONS;EXPLOSIVES.It cannot be doubted
that the refusal of a "steamship company, the owner of a
large number of vessels" engaged in the coastwise trade of
the Philippine Islands as a common carrier of merchandise,
to accept explosives for carriage on any of its vessels
subjects the traffic in such explosives to a manifestprejudice and discrimination, and in each case it is a
question of fact whether such prejudice or discrimination is
undue, unnecessary or unreasonable.
1.11.ID.; ID.; ID.; CONSIDERATION OF ATTENDANTCIRCUMSTANCES.The making of a finding as to whether
a refusal, by a steamship company engaged in the
coastwise trade in the Philippine Islands as a common
carrier, to carry such products subjects any person,
locality, or the traffic in such products to an unnecessary,
undue or unreasonable prejudice or discrimination,
involves a consideration of the suitability of the vessels of
the company for the transportation of such products; the
reasonable possibility of danger or disaster resulting from
their transportation in the form and under the conditions in
which they are offered for carriage; the general nature of
the business done by the carrier, and, in a word, all the
attendant circumstances which might affect the question of
the reasonable necessity for the refusal by the carrier to
undertake the transportation of this class of merchandise.
1.12.ID.; ID.; ID.; ID.The mere fact that violent anddestructive explosions can be obtained by the use of
dynamite under certain conditions is not sufficient in itself
to justify the refusal of a vessel, duly licensed as a
common carrier of merchandise, to accept it for carriage, if
it can be proven that in the condition in which it is offered
for carriage there is no real danger to the carrier norreasonable ground to fear that his vessel or those on board
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his vessel will be exposed to unnecessary or unreasonable
risks in transporting it, having in mind the nature of his
business as a common carrier engaged in the coastwise
trade in the Philippine Islands, and his duty as a servant of
the public.engaged in a public employment.
1.13.ID.; ID.; ID.; ID.If by the exercise of due diligence,taking all reasonable precautions, the danger of explosions
can be eliminated, the carrier would not be justified in
subjecting the traffic in this commodity to prejudice or
discrimination by proof that there would be a possibility of
danger from explosion when no such precautions are
taken.
1.14.ID. ; ID.; ID.; ID.The traffic in dynamite, gunpowderand other explosives is vitally essential to the material and
general welf are of the inhabitants of these Islands, and if
these products are to continue in general use throughout
the Philippines they must be transported by water from
port to port in the various islands which make up the
Archipelago. It follows that the refusal by a particular
vessel engaged as a common carrier of merchandise in the
coastwise trade in the Philippine Islands to accept such
explosives for carriage constitutes a violation of the
prohibitions against discrimination penalized under the
statute, unless it can be shown that there is so real andsubstantial a danger of disaster necessarily involved in the
carriage of any or all of these articles of merchandise as to
render such ref usal a due or a necessary or a reasonable
exercise of prudence and discretion on the part of the
shipowner.
[No. 8686. July 30, 1915.]
THE UNITED STATES, plaintiff and appellee, vs.PASCUAL
QUINAJON and EUGENIO QUITORIANO, defendants andappellants.
1.1.COMMON CARRIERS; WHO ARE COMMON CARRIERS;ACTNo. 98 CONSTRUED.A common carrier is a person or
corporation whose regular business is to carry passengers
or property for all persons who may choose to employ and
remunerate him. A common carrier is a person or
corporation who undertakes tocarry goods or persons forhire. Act No. 98 of the United States Philippine Commissionis an Act to regulate commerce in the Philippine Islands.
1.2.ID.; PREFERENCES AND DISCRIMINATIONS.Act No. 98provides that no common carrier shall, directly or
indirectly, by any special rate, rebate, drawback, or other
device, charge, demand, collect, or receive from any
person or persons a greater or less compensation for any
services rendered in the transportation of passengers or
property, between points in the Philippine Islands, than he
charges, demands, collects, or receives from any other
person or persons, for doing a like or contemporaneous
service, under substantially similar conditions or
circumstances. A common carrier cannot, under the law,
give any unnecessary or unreasonable preference or
advantage to any particular person, company, firm,
corporation or locality, or any particular kind of traffic, or
subject any particular person, company, firm, or
corporation or locality, or any particular kind of traffic, to
any undue or unreasonable prejudice or discriminationwhatsoever.
1.3.ID. ; ID.Said Act No. 98 does not require that the samecharge shall be made for carrying passengers or property,
unless all the conditions are alike and contemporaneous. It
does not prohibit the charging of a different rate for the
carrying of passengers or property when the actual cost of
handling and transporting the same is different. Common
carriers can not make a different rate to different personsfor carrying persons or merchandise, unless the actual cost
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of handling and shipping is different. It is when the price
charged is for the purpose of favoring persons or localities
or particular kinds of merchandise, that the law intervenes
and prohibits. It is favoritism and discrimination which the
law prohibits. If the services are alike and
contemporaneous, discrimination in the price charged is
prohibited.
G.R. No. 131621. September 28, 1999.*
LOADSTAR SHIPPING CO., INC., petitioner, vs. COURT OF
APPEALS and THE MANILA INSURANCE CO., INC.,
respondents.
Contracts; Common Carriers; Damages; The law imposes
duties and liabilities upon common carriers for the safety and
protection of those who utilize their services and the law cannot
allow a common carrier to render such duties and liabilities merely
facultative by simply failing to obtain the necessary permits and
authorizations.The Court of Appeals referred to the fact that
private respondent held no certificate of public convenience, and
concluded he was not a common carrier. This is palpable error. A
certificate of public convenience is not a requisite for the incurring
of liability under the Civil Code provisions governing common
carriers. That liability arises the moment a person or firm acts as a
common carrier, without regard to whether or not such carrier has
also complied with the requirements of the applicable regulatory
statute and implementing regulations and has been granted a
certificate of public convenience or other franchise. To exempt
private respondent from the liabilities of a common carrier because
he has not secured the necessary certificate of public convenience,
would be offensive to sound public policy; that would be to reward
private respondent precisely for failing to comply with applicable
statutory requirements. The business of a common carrier
impinges directly and intimately upon the safety and well being and
property of those members of the general community who happento deal with such carrier. The law imposes duties and liabilities
upon common carriers for the safety and protection of those who
utilize their services and the law cannot allow a common carrier to
render such duties and liabilities merely facultative by simply
failing to obtain the necessary permits and authorizations.
Same; Same; Same; For a vessel to be seaworthy, it must be
adequately equipped for the voyage and manned with a sufficient
number of competent officers and crew.Moving on to the secondassigned error, we find that the M/V Cherokee was not seaworthy
when it embarked on its voyage on 19 November 1984. The vessel
was not even sufficiently manned at the time. For a vessel to be
seaworthy, it must be adequately equipped for the voyage and
manned with a sufficient number of competent officers and crew.
The failure of a common carrier to maintain in seaworthy condition
its vessel involved in a contract of carriage is a clear breach of its
duty prescribed in Article 1755 of the Civil Code.
Same; Same; Same; Since it was remiss in the performance
of its duties, LOADSTAR cannot hide behind the limited liability
doctrine to escape responsibility for the loss of the vessel and its
cargo.Neither do we agree with LOADSTARs argument that the
limited l iability theory should be applied in this case. The doctrine
of limited liability does not apply where there was negligence on
the part of the vessel owner or agent. LOADSTAR was at fault or
negligent in not maintaining a seaworthy vessel and in having
allowed its vessel to sail despite knowledge of an approaching
typhoon. In any event, it did not sink because of any storm that
may be deemed as force majeure, inasmuch as the wind condition
in the area where it sank was determined to be moderate. Since it
was remiss in the performance of its duties, LOADSTAR cannot hide
behind the limited liability doctrine to escape responsibility for
the loss of the vessel and its cargo.
Same; Same; Same; A stipulation reducing the one-year
period for filing the action for recovery is null and void and must be
struck down.Neither is there merit to the contention that the
claim in this case was barred by prescription. MICs cause of action
had not yet prescribed at the time it was concerned. Inasmuch asneither the Civil Code nor the Code of Commerce states a specific
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prescriptive period on the matter, the Carriage of Goods by Sea Act
(COGSA)which provides for a one-year period of limitation on
claims for loss of, or damage to, cargoes sustained during transit
may be applied suppletorily to the case at bar. This one-year
prescriptive period also applies to the insurer of the goods. In this
case, the period for filing the action for recovery has not yet
elapsed. Moreover, a stipulation reducing the one-year period isnull and void; it must, accordingly, be struck down.
G.R. No. 125948. December 29, 1998.*
FIRST PHILIPPINE INDUSTRIAL CORPORATION,
petitioner, vs. COURT OF APPEALS, HONORABLE PATERNO V.
TAC-AN, BATANGAS CITY and ADORACION C. ARELLANO, in
her official capacity as City Treasurer of Batangas,
respondents.
Contracts; Common Carriers; A common carrier is one who
holds himself out to the public as engaged in the business of
transporting persons or property from place to place, for
compensation, offering his services to the public generally.There
is merit in the petition. A common carrier may be defined,
broadly, as one who holds himself out to the public as engaged in
the business of transporting persons or property from place to
place, for compensation, offering his services to the public
generally. Article 1732 of the Civil Code defines a common carrier
as any person, corporation, firm or association engaged in thebusiness of carrying or transporting passengers or goods or both,
by land, water, or air, for compensation, offering their services to
the public.
Same; Same; Test for determining whether a party is a
common carrier of goods.The test for determining whether a
party is a common carrier of goods is: 1. He must be engaged in
the business of carrying goods for others as a public employment,
and must hold himself out as ready to engage in the transportation
of goods for person generally as a business and not as a casualoccupation; 2. He must undertake to carry goods of the kind to
which his business is confined; 3. He must undertake to carry by
the method by which his business is conducted and over his
established roads; and 4. The transportation must be for hire.
Same; Same; The fact that petitioner has a limited clientele
does not exclude it from the definition of a common carrier.Based
on the above definitions and requirements, there is no doubt that
petitioner is a common carrier. It is engaged in the business oftransporting or carrying goods, i.e.petroleum products, for hire as
a public employment. It undertakes to carry for all persons
indifferently, that is, to all persons who choose to employ its
services, and transports the goods by land and for compensation.
The fact that petitioner has a limited clientele does not exclude it
from the definition of a common carrier.
Same; Same; Words and Phrases; The definition of common
carriers in the Civil Code makes no distinction as to the means of
transporting, as long as it is by land, water or air.As correctly
pointed out by petitioner, the definition of common carriers in the
Civil Code makes no distinction as to the means of transporting, as
long as it is by land, water or air. It does not provide that the
transportation of the passengers or goods should be by motor
vehicle. In fact, in the United States, oil pipe line operators are
considered common carriers.
Same; Same; Taxation; Legislative intent in excluding from
the taxing power of the local government unit the imposition of
business tax against common carriers is to prevent a duplication of
the so-called common carriers tax.It is clear that the legislative
intent in excluding from the taxing power of the local government
unit the imposition of business tax against common carriers is to
prevent a duplication of the so-called common carriers tax.
Petitioner is already paying three (3%) percent common carriers
tax on its gross sales/earnings under the National Internal Revenue
Code. To tax petitioner again on its gross receipts in its
transportation of petroleum business would defeat the purpose of
the Local Government Code.
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G.R. No. 148496. March 19, 2002.*
VIRGINES CALVO doing business under the name and style
TRANSORIENT CONTAINER TERMINAL SERVICES, INC.,
petitioner, vs. UCPB GENERAL INSURANCE CO., INC.
(formerly Allied Guarantee Ins. Co, Inc.), respondent.
Common Carriers; Customs Brokers; A customs broker is a
common carrierthe concept of common carrier under Article
1732 of the Civil Code may be seen to coincide nearly with the
notion of public service, under the Public Service Act
(Commonwealth Act No. 1416) which at least partially supplements
the law on common carriers set forth in the Civil Code .Petitioner
contends that contrary to the findings of the trial court and the
Court of Appeals, she is not a common carrier but a private carrier
because, as a customs broker and warehouseman, she does not
indiscriminately hold her services out to the public but only offers
the same to select parties with whom she may contract in the
conduct of her business. The contention has no merit. InDe
Guzman v. Court of Appeals, the Court dismissed a similar
contention and held the party to be a common carrier, thusThe
Civil Code defines common carriers in the following terms:
Article 1732. Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air for
compensation, offering their services to the public. The above
article makes no distinction between one whoseprincipalbusinessactivity is the carrying of persons or goods or both, and one who
does such carrying only as an ancillary activity . . . Article 1732
also carefully avoids making any distinction between a person or
enterprise offering transportation service on a regular or scheduled
basis and one offering such service on an occasional, episodic or
unscheduled basis.Neither does Article 1732 distinguish between a
carrier offering its services to the general public, i.e., the general
community or population, and one who offers services or solicits
business only from a narrow segmentof the general population.We think that Article 1732 deliberately refrained from making such
distinctions. So understood, the concept of common carrier under
Article 1732 may be seen to coincide neatly with the notion of
public service, under the Public Service Act (Commonwealth Act
No. 1416, as amended) which at least partially supplements the
law on common carriers set forth in the Civil Code.
Same; Same; There is greater reason for holding a person
who is a customs broker to be a common carrier because thetransportation of goods is an integral part of her business.There
is greater reason for holding petitioner to be a common carrier
because the transportation of goods is an integral part of her
business. To uphold petitioners contention would be to deprive
those with whom she contracts the protection which the law affords
them notwithstanding the fact that the obligation to carry goods for
her customers, as already noted, is part and parcel of petitioners
business.
Same; Same; Words and Phrases; Extraordinary Diligence,
Explained; Common carriers, from the nature of their business and
for reasons of public policy, are bound to observe extraordinary
diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances
of such case.As to petitioners liability, Art. 1733 of the Civil Code
provides: Common carriers, from the nature of their business and
for reasons of public policy, are bound to observe extraordinary
diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances
of each case. . . . In Compania Maritima v. Court of Appeals, the
meaning of extraordinary diligence in the vigilance over goods
was explained thus: The extraordinary diligence in the vigilance
over the goods tendered for shipment requires the common carrier
to know and to follow the required precaution for avoiding damage
to, or destruction of the goods entrusted to it for sale, carriage and
delivery. It requires common carriers to render service with the
greatest skill and foresight and to use all reasonable means to
ascertain the nature and characteristic of goods tendered for
shipment, and to exercise due care in the handling and stowage,including such methods as their nature requires.
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Same; Same; To prove the exercise of extraordinary
diligence, a customs broker must do more than merely show the
possibility that some other party could be responsible for the
damage.Anent petitioners insistence that the cargo could not
have been damaged while in her custody as she immediately
delivered the containers to SMCs compound, suffice it to say that
to prove the exercise of extraordinary diligence, petitioner must domore than merely show the possibility that some other party could
be responsible for the damage. It must prove that it used all
reasonable means to ascertain the nature and characteristic of
goods tendered for [transport] and that [it] exercise[d] due care in
the handling [thereof]. Petitioner failed to do this.
Same; Same; If the improper packing or the defects in the
container are known to the carrier or his employees or apparent
upon ordinary observation, but he nevertheless accepts the same
without protest or exception notwithstanding such condition, he is
not relieved of liability for damage resulting therefrom.The rule is
that if the improper packing or, in this case, the defect/s in the
container, is/are known to the carrier or his employees or apparent
upon ordinary observation, but he nevertheless accepts the same
without protest or exception notwithstanding such condition, he is
not relieved of liability for damage resulting therefrom. In this
case, petitioner accepted the cargo without exception despite the
apparent defects in some of the container vans. Hence, for failure
of petitioner to prove that she exercised extraordinary diligence in
the carriage of goods in this case or that she is exempt from
liability, the presumption of negligence as provided under Art. 1735
holds
G.R. No. 149038. April 9, 2003.*
PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY,
petitioner, vs.PKS SHIPPING COMPANY, respondent.
Common Carriers; Actions; Appeals; Questions of
Fact;Questions of Law; Words and Phrases; Conclusions derived
from factual findings are not necessarily just matters of fact as
when they are so linked to, or inextricably intertwined with, a
requisite appreciation of the applicable law, in which instance, the
conclusions made could well be raised as being appropriate issues
in a petition for review before the Supreme Court; An issue
whether a carrier is private or common on the basis of the facts
found by a trial court or the appellate court can be a valid and
reviewable question of law.The findings of fact made by the Courtof Appeals, particularly when such findings are consistent with
those of the trial court, may not at liberty be reviewed by this
Court in a petition for review under Rule 45 of the Rules of Court.
The conclusions derived from those factual findings, however, are
not necessarily just matters of fact as when they are so linked to,
or inextricably intertwined with, a requisite appreciation of the
applicable law. In such instances, the conclusions made could well
be raised as being appropriate issues in a petition for review before
this Court. Thus, an issue whether a carrier is private or common
on the basis of the facts found by a trial court or the appellate
court can be a valid and reviewable question of law.
Same; Article 1732 of the Civil Code carefully avoids making
any distinction between a person or enterprise offering
transportation service on a regular or scheduled basis and one
offering such service on an occasional, episodic or unscheduled
basis, and neither does it distinguish between a carrier offering its
services to the general public, i.e., the general community or
population, and one who offers services or solicits business only
from a narrow segment of the general population.The prevailing
doctrine on the question is that enunciated in the leading case
of De Guzman vs. Court of Appeals Applying Article 1732 of the
Code, in conjunction with Section 13(b) of the Public Service Act,
this Court has held: The above article makes no distinction
between one whoseprincipalbusiness activity is the carrying of
persons or goods orboth, and one who does such carrying only as
an ancillary activity (in local idiom, as a sideline). Article 1732
also carefully avoids making any distinction between a person or
enterprise offering transportation service on a regular or scheduledbasis and one offering such service on an occasional, episodic or
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unscheduled basis.Neither does Article 1732 distinguish between a
carrier offering its services to the general public, i.e.,the general
community or population, and one who offers services or solicits
business only from a narrow segmentof the general population.
We think that Article 1732 deliberately refrained from making such
distinctions. So understood, the concept of common carrier under
Article 1732 may be seen to coincide neatly with the notion ofpublic service, under the Public Service Act (Commonwealth Act
No. 1416, as amended) which at least partially supplements the
law on common carriers set forth in the Civil Code.
Same; Words and Phrases; Much of the distinction between a
common or public carrier and a private or special carrier lies in
the character of the business, such that if the undertaking is an
isolated transaction, not a part of the business or occupation, and
the carrier does not hold itself out to carry the goods for the
general public or to a limited clientele, although involving the
carriage of goods for a fee, the person or corporation providing
such service could very well be just a private carrier; The concept
of a common carrier does not change merely because individual
contracts are executed or entered into with patrons of the carrier
such restrictive interpretation would make it easy for a common
carrier to escape liability by the simple expedient of entering into
those distinct agreements with clients.Much of the distinction
between a common or public carrier and a private or special
carrier lies in the character of the business, such that if the
undertaking is an isolated transaction, not a part of the business or
occupation, and the carrier does not hold itself out to carry the
goods for the general public or to a limited clientele, although
involving the carriage of goods for a fee, the person or corporation
providing such service could very well be just a private carrier. A
typical case is that of a charter party which includes both the
vessel and its crew, such as in a bareboat or demise, where the
charterer obtains the use and service of all or some part of a ship
for a period of time or a voyage or voyages and gets the control of
the vessel and its crew. Contrary to the conclusion made by theappellate court, its factual findings indicate that PKS Shipping has
engaged itself in the business of carrying goods for others,
although for a limited clientele, undertaking to carry such goods for
a fee. The regularity of its activities in this area indicates more
than just a casual activity on its part. Neither can the concept of a
common carrier change merely because individual contracts are
executed or entered into with patrons of the carrier. Such
restrictive interpretation would make it easy for a common carrierto escape liability by the simple expedient of entering into those
distinct agreements with clients.
Same; Extraordinary Diligence; Article 1733 of the Civil Code
requires common carriers to observe extraordinary diligence in the
vigilance over the goods they carry.Addressing now the issue of
whether or not PKS Shipping has exercised the proper diligence
demanded of common carriers, Article 1733 of the Civil Code
requires common carriers to observe extraordinary diligence in the
vigilance over the goods they carry. In case of loss, destruction or
deterioration of goods, common carriers are presumed to have
been at fault or to have acted negligently, and the burden of
proving otherwise rests on them. The provisions of Article 1733,
notwithstanding, common carriers are exempt from liability for
loss, destruction, or deterioration of the goods due to any of the
following causes: (1) Flood, storm, earthquake, lightning, or other
natural disaster or calamity; (2) Act of the public enemy in war,
whether international or civil; (3) Act or omission of the shipper or
owner of the goods; (4) The character of the goods or defects in
the packing or in the containers; and (5) Order or act of competent
public authority.
Evidence; Appeals; Findings of fact of the Court of Appeals
generally conclude the Supreme Court; Exceptions.Findings of
fact of the Court of Appeals generally conclude this Court; none of
the recognized exceptions from the rule(1) when the factual
findings of the Court of Appeals and the trial court are
contradictory; (2) when the conclusion is a finding grounded
entirely on speculation, surmises, or conjectures; (3) when the
inference made by the Court of Appeals from its findings of fact ismanifestly mistaken, absurd, or impossible; (4) when there is a
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grave abuse of discretion in the appreciation of facts; (5) when the
appellate court, in making its findings, went beyond the issues of
the case and such findings are contrary to the admissions of both
appellant and appellee; (6) when the judgment of the Court of
Appeals is premised on a misapprehension of facts; (7) when the
Court of Appeals failed to notice certain relevant facts which, if
properly considered, would justify a different conclusion; (8) whenthe findings of fact are themselves conflicting; (9) when the
findings of fact are conclusions without citation of the specific
evidence on which they are based; and (10) when the findings of
fact of the Court of Appeals are premised on the absence of
evidence but such findings are contradicted by the evidence on
recordwould appear to be clearly extant in this instance.
G.R. No. 147246. August 19, 2003.*
ASIA LIGHTERAGE AND SHIPPING, INC.,
petitioner, vs.COURT OF APPEALS and PRUDENTIALGUARANTEE AND ASSURANCE, INC., respondents.
Civil Law; Contracts; Common Carriers; Definition.The
definition of common carriersin Article 1732 of the Civil Code
makes no distinction between one whose principal business activity
is the carrying of persons or goods or both, and one who does such
carrying only as an ancillary activity. We also did not distinguish
between a person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on anoccasional, episodic or unscheduled basis. Further, we ruled that
Article 1732 does not distinguish between a carrier offering its
services to the general public, and one who offers services or
solicits business only from a narrow segment of the general
population.
Same; Same; Same; Determination of a common carrier.
The test to determine a common carrier is whether the given
undertaking is a part of the business engaged in by the carrier
which he has held out to the general public as his occupation rather
than the quantity or extent of the business transacted.
Same; Same; Same; Presumption of Negligence; Common
carriers are presumed to have been at fault or to have acted
negligently if the goods are lost, destroyed or deteriorated.
Common carriers are bound to observe extraordinary diligence in
the vigilance over the goods transported by them. They are
presumed to have been at fault or to have acted negligently if the
goods are lost, destroyed or deteriorated. To overcome thepresumption of negligence in the case of loss, destruction or
deterioration of the goods, the common carrier must prove that it
exercised extraordinary diligence. There are, however, exceptions
to this rule. Article 1734 of the Civil Code enumerates the instances
when the presumption of negligence does not attach.
G.R. No. 186312. June 29, 2010.*SPOUSES DANTE CRUZ and LEONORA CRUZ, petitioners, vs.
SUN HOLIDAYS, INC., respondent.
Civil Law; Common Carriers; Definition of Common Carriers.
As De Guzman instructs, Article 1732 of the Civil Code defining
common carriers has deliberately refrained from making
distinctions on whether the carrying of persons or goods is the
carriers principal business, whether it is offered on a regular basis,
or whether it is offered to the general public. The intent of the law
is thus to not consider such distinctions. Otherwise, there is no
telling how many other distinctions may be concocted by
unscrupulous businessmen engaged in the carrying of persons or
goods in order to avoid the legal obligations and liabilities ofcommon carriers.
Same; Same; Degree of Diligence Required; From the
nature of their business and for reasons of public policy, common
carriers are bound to observe extraordinary diligence for the safety
of the passengers transported by them, according to all the
circumstances of each case.Under the Civil Code, common
carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence for the safety
of the passengers transported by them, according to all the
circumstances of each case. They are bound to carry thepassengers safely as far as human care and foresight can provide,
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Distinguished from Private Carrier
No. L-25599. April 4, 1968.
HOME INSURANCE COMPANY, plaintiff-
appellee, vs.AMERICAN STEAMSHIP AGENCIES, INC. and
LUZON STEVEDORING CORPORATION, defendants,
AMERICAN STEAMSHIP AGENCIES, INC., defendant-
appellant.
Code of Commerce; Charter party; Civil Code on common
carriers does not apply to charter party.The Civil Code provisions
on common carriers should not apply where the common carrier is
not acting as such but as a private carrier. Under American
jurisprudence, a common carrier undertaking to carry a special
cargo or chartered to a special person only, becomes a private
carrier. As a private carrier, a stipulation exempting the owner
from liability for the negligence of its agent is valid.
Same; Same, Stipulation on absolving owner from liability for
loss due to negligence of its agent is valid.The stipulation in the
charter party absolving the owner from liability for loss due to the
negligence of its agent would be void only if the strict public policy
governing common carriers is applied. Such policy has no force
where the public at large is not involved, as in the case of a ship
totally chartered for the use of a single party. The stipulation
exempting the owner from liability for the negligence of its agent is
not against public policy and is deemed valid.
Civil Code; Common carriers; Origin of provisions.Theprovisions of our Civil Code on common carriers were taken from
Anglo-American law.
Code of Commerce; Bill of lading; Nature; Not the contract in
a charter party.In a charter of the entire vessel, the bill of lading
issued by the master to the charterer, as shipper, is in fact and
legal contemplation merely a receipt and a document of title, not a
contract, for the contract is the charter party.
Nos. L-61461 & 61501. August 21, 1987.*
EPITACIO SAN PABLO, (Substituted by Heirs of E. San
Pablo), petitioners, vs.PANTRANCO SOUTH EXPRESS, INC.,
respondent.
CARDINAL SHIPPING CORPORATION,
petitioner, vs.HONORABLE BOARD OF TRANSPORTATION
AND PANTRANCO SOUTH EXPRESS, INC., respondents.
Transportation; Public Utilities; Matnog and Allen are
separated by an open sea it cannot be considered as a continuation
of highway.Considering the environmental circumstances of the
case, the conveyance of passengers, trucks and cargo from Matnog
to Allen is certainly not a ferryboat service but a coastwise or
interisland shipping service. Under no circumstance can the sea
between Matnog and Allen be considered a continuation of the
highway. While a ferryboat service has been considered as a
continuation of the highway when crossing rivers or even lakes,
which are small body of waters separating the land, however, when
as in this case the two terminals, Matnog and Allen are separated
by an open sea it can not be considered as a continuation of the
highway. Respondent PANTRANCO should secure a separate CPC
for the operation of an interisland or coastwise shipping service in
accordance with the provisions of law. Its CPC as a bus
transportation cannot be merely amended to include this water
service under the guise that it is a mere private ferry service.
Same; Same; Considering that the authority granted to
Pantranco is to operate a private ferry, it can assert that it cannotbe held to account as a common carrier which situation will
jeopardize the safety and interest of its passengers and cargo
owners.The contention of private respondent PANTRANCO that its
ferry service operation is as a private carrier, not as a common
carrier for its exclusive use in the ferrying of its passenger buses
and cargo trucks is absurd. PANTRANCO does not deny that it
charges its passengers separately from the charges for the bus
trips and issues separate tickets whenever they board the M/V
"Black Double" that crosses Matnog to Allen, PANTRANCO cannotpretend that in issuing tickets to its passengers it did so as a
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private carrier and not as a common carrier. The Court does not
see any reason why inspite of its amended franchise to operate a
private ferryboat service it cannot accept walk-in passengers just
for the purpose of crossing the sea between Matnog and Allen.
Indeed evidence to this effect has been submitted. What is even
more difficult to comprehend is that while in one breath respondent
PANTRANCO claims that it is a private carrier insofar as theferryboat service is concerned, in another breath it states that it
does not thereby abdicate from its obligation as a common carrier
to observe extraordinary diligence and vigilance in the
transportation of its passengers and goods. Nevertheless,
considering that the authority granted to PANTRANCO is to operate
a private ferry, it can still assert that it cannot be held to account
as a common carrier towards its passengers and cargo. Such an
anomalous situation that will jeopardize the safety and interests of
its passengers and the cargo owners cannot be allowed.
Same; Same.Thus the Court holds that the water transport
service between Matnog and Allen is not a ferryboat service but a
coastwise or interisland shipping service. Before private respondent
may be issued a franchise or CPC for the operation of the said
service as a common carrier, it must comply with the usual
requirements of filing an application, payment of the fees,
publication, adducing evidence at a hearing and afffording the
oppositors the opportunity to be heard, among others, as provided
by law.
G.R. No. 112287. December 12, 1997.*NATIONAL STEEL CORPORATION, petitioner, vs.COURT OF
APPEALS AND VLASONS SHIPPING, INC., respondents.G.R. No. 112350. December 12, 1997.*
VLASONS SHIPPING, INC., petitioner, vs.COURT OF
APPEALS AND NATIONAL STEEL CORPORATION,
respondents.
Common Carriers; Private Carriers; Ships and Shipping; It has
been held that the true test of a common carrier is the carriage ofpassengers or goods, provided it has space, for all who opt to avail
themselves of its transportation service for a fee.Article 1732 of
the Civil Code defines a common carrier as persons, corporations,
firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air,
for compensation, offering their services to the public. It has been
held that the true test of a common carrier is the carriage of
passengers or goods, provided it has space, for allwho opt to availthemselves of its transportation service for a fee. A carrier which
does not qualify under the above test is deemed a private carrier.
Generally, private carriage is undertaken by special agreement
and the carrier does not hold himself out to carry goods for the
general public. The most typical, although not the only form of
private carriage, is the charter party, a maritime contract by which
the charterer, a party other than the shipowner, obtains the use
and service of all or some part of a ship for a period of time or a
voyage or voyages.
Same; Same; Same; The rights and obligations of a private
carrier and a shipper, including their respective liability for damage
to the cargo, are determined primarily by stipulations in their
contract of private carriage or charter party.In the instant case, it
is undisputed that VSI did not offer its services to the general
public. As found by the Regional Trial Court, it carried passengers
or goods only for those it chose under a special contract of charter
party. As correctly concluded by the Court of Appeals, the MV
Vlasons Iwas not a common but a private carrier. Consequently,
the rights and obligations of VSI and NSC, including their
respective liability for damage to the cargo, are determined
primarily by stipulations in their contract of private carriage or
charter party.
Same; Same; Same; Evidence; Burden of Proof; Code of
Commerce; In an action against a private carrier for loss of, or
injury to, cargo, the burden is on the plaintiff to prove that the
carrier was negligent or unseaworthy, and the fact that the goods
were lost or damaged while in the carriers custody does not put
the burden of proof on the carrier.This view finds further supportin the Code of Commerce which pertinently provides: Art.
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361.Merchandise shall be transported at the risk and venture of the
shipper, if the contrary has not been expressly
stipulated.Therefore, the damage and impairment suffered by the
goods during the transportation, due to fortuitous event, force
majeure, or the nature and inherent defect of the things, shall be
for the account and risk of the shipper. The burden of proof of
these accidents is on the carrier. Art. 362. The carrier, however,shall be liable for damages arising from the cause mentioned in the
preceding article if proofs against him show that they occurred on
account of his negligence or his omission to take the precautions
usually adopted by careful persons, unless the shipper committed
fraud in the bill of lading, making him to believe that the goods
were of a class or quality different from what they really were.
Because the MV Vlasons Iwas a private carrier, the shipowners
obligations are governed by the foregoing provisions of the Code of
Commerce and not by the Civil Code which, as a general rule,
places theprima faciepresumption of negligence on a common
carrier. It is a hornbook doctrine that: In an action against a
private carrier for loss of, or injury to, cargo, the burden is on the
plaintiff to prove that the carrier was negligent or unseaworthy,
and the fact that the goods were lost or damaged while in the
carriers custody does not put the burden of proof on the carrier.
Same; Same; Same; Where the factual findings of both the
trial court and the Court of Appeals coincide, the same are binding
on the Supreme Court.These questions of fact were threshed out
and decided by the trial court, which had the firsthand opportunityto hear the parties conflicting claims and to carefully weigh their
respective evidence. The findings of the trial court were
subsequently affirmed by the Court of Appeals. Where the factual
findings of both the trial court and the Court of Appeals coincide,
the same are binding on this Court. We stress that, subject to
some exceptional instances, only questions of lawnot questions of
factmay be raised before this Court in a petition for review under
Rule 45 of the Rules of Court.
Same; Same; Same; Only questions of lawnot questions offactmay be raised before the Supreme Court in a petition for
review under Rule 45 of the Rules of Court; Exceptions.Fuentes
v. Court of Appeals,G.R. No. 109849, pp. 6-8, February 26, 1997,
per Panganiban,J.,enumerated the following instances: (1) When
the factual findings of the Court of Appeals and the trial court are
contradicttory; (2) When the conclusion is a finding grounded
entirely on speculation, surmises, or conjectures; (3) When the
inference made by the Court of Appeals from its findings of fact ismanifestly mistaken, absurd, or impossible; (4) When there is a
grave abuse of discretion in the appreciation of facts; (5) When the
appellate court, in making its findings, went beyond the issues of
the case, and such findings are contrary to the admissions of both
appellant and appellee; (6) When the judgment of the Court of
Appeals is premised on a misapprehension of facts; (7) When the
Court of Appeals failed to notice certain relevant facts which, if
properly considered, would justify a different conclusion; (8) When
the findings of fact are themselves conflicting; (9) When the
findings of fact are conclusions without citation of the specific
evidence on which they are based; and (10) When the findings of
fact of the Court of Appeals are premised on the absence of
evidence but such findings are contradicted by the evidence on
record.
Same; Same; Same; Stevedoring Service; A Stevedore
company engaged in discharging cargo has the duty to load the
cargo in a prudent manner, and it is liable for injury to, or loss of,
cargo caused by its negligence and where the officers and
members and crew of the vessel do nothing and have noresponsibility in the discharge of cargo by stevedores the vessel is
not liable for loss of, or damage to, the cargo caused by the
negligence of the stevedores.The fact that NSC actually accepted
and proceeded to remove the cargo from the ship during
unfavorable weather will not make VSI liable for any damage
caused thereby. In passing, it may be noted that the NSC may
seek indemnification, subject to the laws on prescription, from the
stevedoring company at fault in the discharge operations. A
stevedore company engaged in discharging cargo x x x has theduty to load the cargo x x x in a prudent manner, and it is liable for
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injury to, or loss of, cargo caused by its negligence x x x and where
the officers and members and crew of the vessel do nothing and
have no responsibility in the discharge of cargo by stevedores x x x
the vessel is not liable for loss of, or damage to, the cargo caused
by the negligence of the stevedores x x x as in the instant case.
Evidence; Hearsay Rule; Entries in official records made in the
performance of a duty by a public officer of the Philippines, or by a
person in the performance of a duty specially enjoined by law, are
prima facie evidence of the facts therein stated.We find,
however, that Exhibit 11 is admissible under a well-settled
exception to the hearsay rule per Section 44 of Rule 130 of the
Rules of Court, which provides that (e)ntries in official records
made in the performance of a duty by a public officer of the
Philippines, or by a person in the performance of a duty specially
enjoined by law, areprima facieevidence of the facts therein
stated. Exhibit 11 is an original certificate of the Philippine Coast
Guard in Cebu issued by Lieutenant Junior Grade Noli C. Flores to
the effect that the vessel VLASONS I was drylocked x x x and
PCG Inspectors were sent on board for inspection x x x. After
completion of drydocking and duly inspected by PCG Inspectors,
the vessel VLASONS I, a cargo vessel, is in seaworthy condition,
meets all requirements, fitted and equipped for trading as a cargo
vessel, was cleared by the Philippine Coast Guard and sailed for
Cebu Port on July 10, 1974. (sic) NSCs claim, therefore, is
obviously misleading and erroneous.
Ships and Shipping; Words and Phrases; Demurrage andLaytime, Explained.The Court defined demurrage in its strict
sense as the compensation provided for in the contract of
affreightment for the detention of the vessel beyond the laytime or
that period of time agreed on for loading and unloading of cargo. It
is given to compensate the shipowner for the nonuse of the vessel.
On the other hand, the following is well-settled: Laytime runs
according to the particular clause of the charter party. x x x If
laytime is expressed in running days, this means days when the
ship would be run continuously, and holidays are not expected. A
qualification of weather permitting excepts only those days when
bad weather reasonably prevents the work contemplated.
Same; Same; Same; Where laytime is qualified as
WWDSHINC or weather, working days Sundays and holidays, the
running of laytime is made subject to the weather, and would
cease to run in the event unfavorable weather interferes with the
unloading of cargo.In this case, the contract of voyage charter
hire provided for a four-day laytime; it also qualified laytime as
WWDSHINC or weather, working days Sundays and holidays
included. The running of laytime was thus made subject to the
weather, and would cease to run in the event unfavorable weather
interfered with the unloading of cargo. Consequently, NSC may not
be held liable for demurrage as the four-day laytime allowed it did
not lapse, having been tolled by unfavorable weather condition in
view of the WWDSHINC qualification agreed upon by the parties.
Clearly, it was error for the trial court and the Court of Appeals to
have found and affirmed respectively that NSC incurred eleven
days of delay in unloading the cargo. The trial court arrived at this
erroneous finding by subtracting from the twelve days, specifically
August 13, 1974 to August 24, 1974, the only day of unloading
unhampered by unfavorable weather or rain, which was August 22,
1974. Based on our previous discussion, such finding is a reversible
error. As mentioned, the respondent appellate court also erred in
ruling that NSC was liable to VSI for demurrage, even if it reduced
the amount by half.
Attorneys Fees; The mere fact that a party was compelled tolitigate to protect its rights will not justify an award of attorneys
fees under Article 2208 of the Civil Code when no sufficient
showing of bad faith would be reflected in the other partys
persistence in a case other than an erroneous conviction of the
righteousness of his cause.VSI assigns as error of law the Court
of Appeals deletion of the award of attorneys fees. We disagree.
While VSI was compelled to litigate to protect its rights, such fact
by itself will not justify an award of attorneys fees under Article
2208 of the Civil Code when x x x no sufficient showing of badfaith would be reflected in a partys persistence in a case other
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than an erroneous conviction of the righteousness of his cause x x
x. Moreover, attorneys fees may not be awarded to a party for
the reason alone that the judgment rendered was favorable to the
latter, as this is tantamount to imposing a premium on ones right
to litigate or seek judicial redress of legitimate grievances.
G.R. No. 101503. September 15, 1993.*
PLANTERS PRODUCTS, INC., petitioner, vs.COURT OF
APPEALS, SORIAMONT STEAMSHIP AGENCIES AND KYOSEI
KISEN KABUSHIKI KAISHA, respondents.
Words and Phrases; Shipping; Charter Party defined.A
charter-party is defined as a contract by which an entire ship, or
some principal part thereof, is let by the owner to another person
for a specified time or use; a contract of affreightment by which
the owner of a ship or other vessel lets the whole or a part of her
to a merchant or other person for the conveyance of goods, on a
particular voyage, in consideration of the payment of freight;
Charter parties are of two types: (a) contract of affreightment
which involves the use of shipping space on vessels leased by the
owner in part or as a whole, to carry goods for others; and, (b)
charter by demise or bareboat charter, by the terms of which the
whole vessel is let to the charterer with a transfer to him of its
entire command and possession and consequent control over its
navigation, including the master and the crew, who are his
servants. Contract of affreightment may either be time charter,
wherein the vessel is leased to the charterer for a fixed period oftime, or voyage charter, wherein the ship is leased for a single
voyage. In both cases, the charter-party provides for the hire of
the vessel only, either for a determinate period of time or for a
single or consecutive voyage, the shipowner to supply the ships
stores, pay for the wages of the master and the crew, and defray
the expenses for the maintenance of the ship.
Same; Same; Common Carrier defined.Upon the other
hand, the term common or public carrier is defined in Art. 1732
of the Civil Code. The definition extends to carriers either by land,air or water which hold themselves out as ready to engage in
carrying goods or transporting passengers or both for
compensation as a public employment and not as a casual
occupation. The distinction between a common or public carrier
and a private or special carrier lies in the character of the
business, such that if the undertaking is a single transaction, not a
part of the general business or occupation, although involving the
carriage of goods for a fee, the person or corporation offering such
service is a private carrier.
Shipping; Transportation; Evidence; Common carriers required
to observe extraordinary diligence and presumed at fault; no such
presumption applies to private carriers.Article 1733 of the New
Civil Code mandates that common carriers, by reason of the nature
of their business, should observe extraordinary diligence in the
vigilance over the goods they carry. In the case of private carriers,
however, the exercise of ordinary diligence in the carriage of goods
will suffice. Moreover, in case of loss, destruction or deterioration
of the goods, common carriers are presumed to have been at fault
or to have acted negligently, and the burden of proving otherwise
rests on them. On the contrary, no such presumption applies to
private carriers, for whosoever alleges damage to or deterioration
of the goods carried has the onus of proving that the cause was the
negligence of the carrier.
Same; Same; Same; In a time or voyage charter, in contrast
to a bareboat charter, the ship remains a common or public
carrier.It is therefore imperative that a public carrier shall remain
as such, notwithstanding the charter of the whole or portion of avessel by one or more persons, provided the charter is limited to
the ship only, as in the case of a time-charter or voyage-charter. It
is only when the charter includes both the vessel and its crew, as in
a bareboat or demise that a common carrier becomes private, at
least insofar as the particular voyage covering the charter-party is
concerned. Indubitably, a shipowner in a time or voyage charter
retains possession and control of the ship, although her holds may,
for the moment, be the property of the charterer.
Same; Same; Same; In the common carriage of highly solublegoods, like fertilizer, it is the shipper or owner of the goods that
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commonly face risk of loss or damage.Indeed, we agree with
respondent carrier that bulk shipment of highly soluble goods like
fertilizer carries with it the risk of loss or damage. More so, with a
variable weather condition prevalent during its unloading, as was
the case at bar. This is a risk the shipper or the owner of the goods
has to face. Clearly, respondent carrier has sufficiently proved the
inherent character of the goods which makes it highly vulnerable to
deterioration; as well as the inadequacy of its packaging which
further contributed to the loss. On the other hand, no proof was
adduced by the petitioner showing that the carrier was remiss in
the exercise of due diligence in order to minimize the loss or
damage to the goods it carried.
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Government Regulation of CommonCarriers Business
G.R. No. 115381. December 23, 1994.*
KILUSANG MAYO UNO LABOR CENTER, petitioner, vs.HON.
JESUS B. GARCIA, JR., the LAND TRANSPORTATION
FRANCHISING AND REGULATORY BOARD, and the
PROVINCIAL BUS OPERATORS ASSOCIATION OF THE
PHILIPPINES, respondents.
Public Utilities; Common Carriers; Words and Phrases; When
one devotes his property to a use in which the public has an
interest, he, in effect grants to the public an interest in that use,
and must submit to the control by the public for the common good,
to the extent of the interest he has thus created.Public utilities
are privately owned and operated businesses whose services are
essential to the general public. They are enterprises which specially
cater to the needs of the public and conduce to their comfort and
convenience. As such, public utility services are impressed with
public interest and concern. The same is true with respect to the
business of common carrier which holds such a peculiar relation to
the public interest that there is superinduced upon it the right of
public regulation when private properties are affected with public
interest, hence, they cease to bejuris privationly. When,
therefore, one devotes his property to a use in which the public has
an interest, he, in effect grants to the public an interest in that use,and must submit to the control by the public for the common good,
to the extent of the interest he has thus created.
Same; Same; Judicial Review; Parties; Words and
Phrases;Judicial Power, Defined.The requirement of locus
standiinheres from the definition of judicial power. In Lamb v.
Phipps, we ruled that judicial power is the power to hear and
decide causes pending between parties who have the right to sue
in the courts of law and equity. Corollary to this provision is the
principle of locus standiof a party litigant. One who is directly
affected by, and whose interest is immediate and substantial in the
controversy has the standing to sue. The rule therefore requires
that a party must show a personal stake in the outcome of the case
or an injury to himself that can be redressed by a favorable
decision so as to warrant an invocation of the courts jurisdiction
and to justify the exercise of the courts remedial powers in his
behalf.
Same; Same; Same; Same; The KMU, whose members had
suffered and continue to suffer grave and irreparable injury and
damage from the implementation of certain government
memoranda, circulars and orders affecting common carriers, has
the standing to sue to question the same.At the outset, the
threshold issue of locus standimust be struck. Petitioner KMU has
the standing to sue. In the case at bench, petitioner, whose
members had suffered and continue to suffer grave and irreparable
injury and damage from the implementation of the questioned
memoranda, circulars and/or orders, has shown that it has a clear
legal right that was violated and continues to be violated with the
enforcement of the challenged memoranda, circulars and/or
orders. KMU members, who avail of the use of buses, trains and
jeepneys everyday, are directly affected by the burdensome cost of
arbitrary increase in passenger fares. They are part of the millions
of commuters who comprise the riding public. Certainly, their rights
must be protected, not neglected nor ignored.
Same; Same; Same; Same; The Supreme Court is ready to
brush aside a procedural infirmity when the issues raised are oftranscendental importance.Assuming arguendo that petitioner is
not possessed of the standing to sue, this court is ready to brush
aside this barren procedural infirmity and recognize the legal
standing of the petitioner in view of the transcendental importance
of the issues raised. And this act of liberality is not without judicial
precedent. As early as the Emergency Powers Cases, this Court had
exercised its discretion and waived the requirement of proper
party.
Same; Same; Political Law; Administrative Law; Delegation ofPowers; Power of Subordinate Legislation; The Legislature has
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delegated to the defunct Public Service Commission, and presently
the LTFRB, the power of fixing the rates of public services.Under
the foregoing provision, the Legislature delegated to the defunct
Public Service Commission the power of fixing the rates of public
services. Respondent LTFRB, the existing regulatory body today, is
likewise vested with the same under Executive Order No. 202
dated June 19, 1987. Section 5(c) of the said executive order
authorizes LTFRB to determine, prescribe, approve and
periodically review and adjust, reasonable fares, rates and other
related charges, relative to the operation of public land
transportation services provided by motorized vehicles.
Same; Same; Same; Same; Same; Same; Given the task of
determining sensitive and delicate matters as route-fixing and rate-
making for the transport sector, the responsible regulatory body is
entrusted with the power of subordinate legislation, under which
such administrative body may implement broad policies laid down
in a statute by filling in the details which the Legislature may
neither have
time nor competence to provide.Such delegation of legislative
power to an administrative agency is permitted in order to adapt to
the increasing complexity of modern life. As subjects for
governmental regulation multiply, so does the difficulty of
administering the laws. Hence, specialization even in legislation has
become necessary. Given the task of determining sensitive and
delicate matters as route-fixing and rate-making for the transport
sector, the responsible regulatory body is entrusted with the powerof subordinate legislation. With this authority, an administrative
body and in this case, the LTFRB, may implement broad policies
laid down in a statute by filling in the details which the
Legislature may neither have time nor competence to provide.
However, nowhere under the aforesaid provisions of law are the
regulatory bodies, the PSC and LTFRB alike, authorized to delegate
that power to a common carrier, a transport operator, or other
public service.
Same; Same; Same; Same; Same; The authority given by theLTFRB to the provincial bus operators to set a fare range over and
above the authorized existing fare, is illegal and invalid as it is
tantamount to an undue delegation of legislative authority;
Potestas delegata non delegari potest.In the case at bench, the
authority given by the LTFRB to the provincial bus operators to set
a fare range over and above the authorized existing fare, is illegal
and invalid as it is tanta-mount to an undue delegation of
legislative authority. Potestas delegata non delegari potest. What
has been delegated cannot be delegated. This doctrine is based on
the ethical principle that such a delegated power constitutes not
only a right but a duty to be performed by the delegate through
the instrumentality of his own judgment and not through the
intervening mind of another. A further delegation of such power
would indeed constitute a negation of the duty in violation of the
trust reposed in the delegate mandated to discharge it directly.
Same; Same; Same; Same; Same; Rate Fixing; Rate making
or rate fixing is a delicate and sensitive government function that
requires dexterity of judgment and sound discretion with the
settled goal of arriving at a just and reasonable rate acceptable to
both the public utility and the public.Moreover, rate making or
rate fixing is not an easy task. It is a delicate and sensitive
government function that requires dexterity of judgment and sound
discretion with the settled goal of arriving at a just and reasonable
rate acceptable to both the public utility and the public. Several
factors, in fact, have to be taken into consideration before a
balance could be achieved. A rate should not be confiscatory as
would place an operator in a situation where he will continue tooperate at a loss. Hence, the rate should enable public utilities to
generate revenues sufficient to cover operational costs and provide
reasonable return on the investments. On the other hand, a rate
which is too high becomes discriminatory. It is contrary to public
interest. A rate, therefore, must be reasonable and fair and must
be affordableto the end user who will utilize the services.
Same; Same; Same; Same; Same; Same; Due Process; The
government must not relinquish the important function of rate-
fixing; The people deserve to be given full opportunity to be heardin their opposition to any fare increase.Given the complexity of
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the nature of the function of rate-fixing and its far-reaching effects
on millions of commuters, government must not relinquish this
important function in favor of those who would benefit and profit
from the industry. Neither should the requisite notice and hearing
be done away with. The people, represented by reputable
oppositors, deserve to be given full opportunity to be heard in their
opposition to any fare increase.
Same; Same; Certificates of Public Convenience (CPC); Words
and Phrases; CPC, Explained; Requisites before a CPC may be
granted.A certificate of public convenience (CPC) is an
authorization granted by the LTFRB for the operation of land
transportation services for public use as required by law. Pursuant
to Section 16(a) of the Public Service Act, as amended, the
following requirements must be met before a CPC may be granted,
to wit: (i) the applicant must be a citizen of the Philippines, or a
corporation or co-partnership, association or joint-stock company
constituted and organized under the laws of the Philippines, at
least 60 per centum of its stock or paid-up capital must belong
entirely to citizens of the Philippines; (ii) the applicant must be
financially capable of undertaking the proposed service and
meeting the responsibilities incident to its operation; and (iii) the
applicant must prove that the operation of the public service
proposed and the authorization to do business will promote the
public interest in a proper and suitable manner. It is understood
that there must be proper notice and hearing before the PSC can
exercise its power to issue a CPC.Same; Same; Same; Administrative Law; Statutory
Construction;In case of conflict between a statute and an
administrative order, the former must prevail.The above-quoted
provision is entirely incompatible and inconsistent with Section
16(c)(iii) of the Public Service Act which requires that before a CPC
will be issued, the applicant must prove by proper notice and
hearing that the operation of the public service proposed will
promote public interest in a proper and suitable manner. On the
contrary, the policy guideline states that the presumption of publicneed for a public service shall be deemed in favor of the applicant.
In case of conflict between a statute and an administrative order,
the former must prevail.
Same; Same; Same; Same; Evidence; Presumptions; The
existence or non-existence of public convenience and necessity is a
question of fact that must be established by evidence in a public
hearing conducted for that purpose.By its terms, public
convenience or necessity generally means something fitting or
suited to the public need. As one of the basic requirements for the
grant of a CPC, public convenience and necessity exists when the
proposed facility or service meets a reasonable want of the public
and supply a need, which the existing facilities do not adequately
supply. The existence or non-existence of public convenience and
necessity is therefore a question of fact that must be established
by evidence, real and/or testimonial; empirical data; statistics and
such other means necessary, in a public hearing conducted for that
purpose. The object and purpose of such procedure, among other
things, is to look out for, and protect, the interests of both the
public and the existing transport operators. Verily, the power of a
regulatory body to issue a CPC is founded on the condition that
after full-dress hearing and investigation, it shall find, as a fact,
that the proposed operation is for the convenience of the public.
Same; Same; Same; Same; Same; Same; Separation of
Powers;Supreme Court; The establishment of a presumption of
public need in favor of an applicant for CPC reverses well-settled
and institutionalized judicial, quasi-judicial and administrative
procedures, and would in effect amend the Rules of Court byadding another disputable presumption under Rule 131; Only the
Supreme Court is mandated by law to promulgate rules concerning
pleading, practice and procedure.Other-wise stated, the
establishment of public need in favor of an applicant reverses well-
settled and institutionalized judicial, quasi-judicial and
administrative procedures. It allows the party who initiates the
proceedings to prove, by mere application, his affirmative
allegations. Moreover, the offending provisions of the LTFRB
memorandum circular in question would in effect amend the Rulesof Court by adding another disputable pre