DEGUZMAN VS. CA

I. Definition of common carrier as provided for in the civil code

Article 1732:

a. common carriers are persons, corporations, firms or associationsb. engaged in the business of carrying or transporting passengers or

goods or bothc. by land, water, or air for compensationd. Offering their services to the public.

II. RULES:

The code does not distinguish between one whose PRINCIPAL BUSINESS ACTIVITY in the carrying of persons or goods or both and one who does such carrying as an ANCILLARY ACTIVITY (SIDELINE)

The code also avoids making any distinction between a person or enterprise offering transportation on a REGULAR OR SCHEDULED BASIS and one offering such service on OCCASSIONAL, OR UNSCHEDULED BASIS

Neither the code distinguish between carrier offering business to the GENERAL PUBLIC and one who offers services to a NARROW SEGMENT OF GENERAL POPULATION

III. A certificate of public convenience is not a requisite for incurring liability under the civil code. Liability arises the moment a person or firm acts as a common carrier, without regard as to whether or not such carrier has also complied with the requirements of applicable regulatory statutes

To exempt from liabilities persons or entities without CPCN would be offensive to public policy

IV. Common carriers, by the nature of their business requires the exercise of extraordinary diligence

ARTICLE 1734

GR: common carriers are responsible for the loss, destruction or deterioration of the goods which they carry

XPN: when the cause is an exempting cause

1. Floods, storm, earthquake, lighting, or other natural disasters2. Acts or omission of public enemy in war3. Acts or omission of the shipper or owner of the goods4. Character of the goods or defects in the packing or in the

containers5. Order or act of competent public authority

The above list 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 art. 1734

ARTICLE 1734

In all cases other than those mentioned in art. 1734, if the goods are lost, destroyed or deteriorated, common carriers are PRESUMED to have been at FAULT or to have acted negligently, unless they proved that they observed EXTRAORDINARY DILIGENCE.

V. ARTICLE 1745: Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy(1) That the goods are transported at the risk of the owner or shipper;

(2) That the common carrier will not be liable for any loss, destruction, or deterioration of the goods;

(3) That the common carrier need not observe any diligence in the custody of the goods;

(4) That the common carrier shall exercise a degree of diligence less than that of a good father of a family, or of a man of ordinary prudence in the vigilance over the movables transported;

(5) That the common carrier shall not be responsible for the acts or omission of his or its employees;

(6) That the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violence or force, is dispensed with or diminished;

(7) That the common carrier is 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.

In paragraph 6, a common carrier is held responsible and will not be allowed to divest to diminish such liability even for acts of strangers like thieves or robbers EXCEPT where such thieves or robbers acted with grave or irresistible force

- The court believe that the limits of extraordinary diligence in the vigilance of goods re lost as a result of robbery which is attended by grave or irresistible threat, violence or force

In the case at bar, hijacking is beyond the limits of extraordinary diligence thus, the concurrence of loss is regarded as beyond the control of the common carrier and properly regarded as fortuitous event. Common carriers are not made insurers against all risks of travel and transport of goods and are not held liable for acts or events which cannot be foreseen or are inevitable.

FABRE VS. CA

The finding that Cabil drove his bus negligently, while his employer, the Fabres, who owned the bus, failed to exercise the diligence of a good father of the family in the selection and supervision of their employee. Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence gave rise to the presumption that his employers, the Fabres, were themselves negligent in the selection and supervision of their employee.The employer should also examine the applicant for his qualifications, experience and record of service.

Due diligence in supervision, on the other hand, requires the formulation of rules and regulations for the guidance of employees and the issuance of proper instructions as well as actual implementation and monitoring of consistent compliance with the rules

[A] person who hires a public automobile and gives the driver directions as to the place to which he wishes to be conveyed, but exercises no other control over the conduct of the driver, is not responsible for acts of negligence of the latter or prevented from recovering for injuries suffered from a collision between the automobile and a train, caused by the negligence either of the locomotive engineer or the automobile driver.[9]

“As already stated, this case actually involves a contract of carriage. Petitioners, the Fabres, did not have to be engaged in the business of public transportation for the provisions of the Civil Code on common carriers to apply to them.”

As common carriers, the Fabres were bound to exercise extraordinary diligence for the safe transportation of the passengers to their destination. This duty of care is not excused by proof that they exercised the diligence of a good father of the family in the selection and supervision of their employee. As Art. 1759 of the Code provides:

Common carriers are liable for the death of or injuries to passengers through the negligence or wilful acts of the formers employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers.

This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees.

The same circumstances detailed above, supporting the finding of the trial court and of the appellate court that petitioners are liable under Arts. 2176 and 2180 for quasi delict, fully justify finding them guilty of breach of contract of carriage under Arts. 1733, 1755 and 1759 of the Civil Code.

PHILIPPINE AMERCIAN GENERAL INSURANCE COMP. VS. PKS SHIPPING

1. Whether PKS shipping is a common carrier

Cite the definition of common carrier under art. 1732 of the civil code and in section 13 of the public service act

Cited the prevailing doctrine in Deguzman case

DICTINCTION BETWEEN COMON OR PUBLIC CARRIER AND PRIVATE CARRIER lies in the character of the business

PRIVATE CARRIER: If the undertaking is an isolated transaction, not a part of the business or occupation, and the carrier does not hold himself 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

Ex. A charter party which both includes 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 for a particular voyage and gets the control of the vessel and its crew.

- PKS has engaged itself in the business of carrying goods for a fee although for a limited clientele

- The regularity of its business indicates more than just a casual activity on its part

2. Whether PKS exercise EXERCISED THE PROPER DILIGENCE (extraordinary if a common carrier; ordinary if a private carrier)

Article 1733: The common carrier by reason of public policy is bound to exercise extraordinary diligence in the vigilance over the goods they carry and for the safety of the passengers transported by them

ARTICLE 1734:

GR: common carriers are responsible for the loss, destruction or deterioration of the goods which they carry

XPN: when the cause is an exempting cause

6. Floods, storm, earthquake, lighting, or other natural disasters7. Acts or omission of public enemy in war8. Acts or omission of the shipper or owner of the goods9. Character of the goods or defects in the packing or in the

containers10. Order or act of competent public authority

The cause of loss: the vessel was suddenly tossed by waves of extraordinary height of 6-8 feet and buffeted by strong winds of 1.5 knots. Thus there was no way by which the barge or the tugbat crew could have prevented the sinking of the barge. (NATURAL DISASTER)

ASIA LIGHTERAGE AND SHIPPING INC. CA

1. WHETHER THE PETITIONER IS A COMMON CARRIER

Article 1732 of the Civil Code defines common carriers 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.

Petitioner contends that it is not a common carrier but a private carrier. Allegedly, it has no fixed and publicly known route, maintains no terminals, and issues no tickets. It points out that it is not obliged to carry indiscriminately for any person. It is not bound to carry goods unless it consents. In short, it does not hold out its services to the general public.

In De Guzman vs. Court of Appeals, we held that the definition of common carriers in 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 an occasional, 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.

In the case at bar, the principal business of the petitioner is that of lighterage and drayage22 and it offers its barges to the public for carrying or transporting goods by water for compensation. Petitioner is clearly a common carrier. In De Guzman, supra,23 we considered private respondent Ernesto Cendaña to be a common carrier even if his principal occupation was not the carriage of goods for others, but that of buying used bottles and scrap metal in Pangasinan and selling these items in Manila.

We therefore hold that petitioner is a common carrier whether its carrying of goods is done on an irregular rather than scheduled manner, and with an only limited clientele. A common carrier need not have fixed and publicly known routes. Neither does it have to maintain terminals or issue tickets.

THE TEST TO DETERMINE A COMMON CARRIER (as laid down in Bascos vs. Court of Appeals ) is "whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business transacted."

- In the case at bar, the petitioner admitted that it is engaged in the business of shipping and lighterage,26 offering its barges to the public, despite its limited clientele for carrying or transporting goods by water for compensation.27

2. ASSUMING THAT THE PETITIONER OIS A COMMON CARRIER, WHETHER IS EXERCISED EXTRAORDINARY DILIGENCE.

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.29 To overcome the presumption 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:

Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, 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;(5) Order or act of competent public authority.

In the case at bar, the barge completely sank after its towing bits broke, resulting in the total loss of its cargo. Petitioner claims that this was caused by a typhoon, hence, it should not be held liable for the loss of the cargo. However, petitioner failed to prove that the typhoon is the proximate and only cause of the loss of the goods, and that it has exercised due diligence before, during and after the occurrence of the typhoon to prevent or minimize the loss. The evidence show that, even before the towing bits of the barge broke, it had already previously sustained damage when it hit a sunken object while docked at the Engineering Island. It even suffered a hole. Clearly, this could not be solely attributed to the typhoon. The partly-submerged vessel was refloated but its hole was patched with only clay and cement. The patch work was merely a provisional remedy, not enough for the barge to sail safely. Thus, when petitioner persisted to proceed with the voyage, it recklessly exposed the cargo to further damage.

AF SANCHEZ BROKERAGE VS. CA

Article 1732 does not distinguish between one whose principal business activity is the carrying of goods and one who does such carrying only as an ancillary activity.

 The contention, therefore, of petitioner that it is not a common carrier but a customs broker whose principal function is to prepare the correct customs declaration and proper shipping documents as required by law is bereft of merit. It suffices that petitioner undertakes to deliver the goods for pecuniary consideration. Anacleto F. Sanchez, Jr., the Manager and Principal Broker of Sanchez Brokerage, himself testified that the services the firm offers include the delivery of goods to the warehouse of the consignee or importer

In this light, petitioner as a common carrier is mandated to observe, under Article 1733  of the Civil Code, extraordinary diligence in the vigilance over the goods it transports according to all the circumstances of each case. In the event that the goods are lost, destroyed or deteriorated, it is presumed to have been at fault or to have acted negligently, unless it proves that it observed extraordinary diligence.

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 characteristics of goods tendered for shipment, and to exercise due care in the handling and stowage, including such methods as their nature requires."

In an attempt to free itself from responsibility for the damage to the goods, petitioner posits that they were damaged due to the fault or negligence of the shipper for failing to properly pack them and to the inherent characteristics of the goods; and that it should not be faulted for following the instructions of Calicdan of Wyeth-Suaco to proceed with the delivery despite information conveyed to the latter that some of the cartons, on examination outside the PSI warehouse, were found to be wet.

While paragraph No. 4 of Article 1734 of the Civil Code exempts a common carrier from liability if the loss or damage is due to the character of the goods or defects in the packing or in the

containers, the rule is that if the improper packing is known to the carrier or his employees or is apparent upon ordinary observation, but he nevertheless accepts the same without protest or exception notwithstanding such condition, he is not relieved of liability for the resulting damage. If the claim of petitioner that some of the cartons were already damaged upon delivery to it were true, then it should naturally have received the cargo under protest or with reservations duly noted on the receipt issued by PSI. But it made no such protest or reservation

CALTEX VS. SULPICIO LINE

Is the charterer of a sea vessel liable for damages resulting from a collision between the chartered vessel and a passenger ship

First: The charterer has no liability for damages under Philippine Maritime laws.

The respective rights and duties of a shipper and the carrier depends not on whether the carrier is public or private, but on whether the contract of carriage is a bill of lading or equivalent shipping documents on the one hand, or a charter party or similar contract on the other. 9

Petitioner and Vector entered into a contract of affreightment, also known as a voyage charter.

A charter party is 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 is one by which the owner of a ship or other vessel lets the whole or 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.

A. time charter: wherein the leased vessel is leased to the charterer for a fixed period of time,

B. 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 ship owner to supply the ship's store, pay for the wages of the master of the crew, and defray the expenses for the maintenance of the ship. 

Under a demise or bareboat charter on the other hand, the charterer mans the vessel with his own people and becomes, in effect, the owner for the voyage or service stipulated, subject to liability for damages caused by negligence.

Second : MT Vector is a common carrier

Charter parties fall into three main categories: (1) Demise or bareboat, (2) time charter, (3) voyage charter.

THUS, If the parties entered into a time or voyage charter, the owner of the ship retains ownership and possession of the ship. The charterer only provides for the lease of the vessel but the owner of the ship supplies the crews and masters, pay the wages and defray expenses and is responsible for liability for damages. In other words, If the charter is a contract of affreightment, which leaves the general owner in possession of the ship as owner for the voyage, the rights and the responsibilities of ownership rest on the owner. The charterer is free from liability to third persons in respect of the ship. 

If the parties entered into a demise charter, charterer mans the vessel with his own people and becomes, in effect, the owner for the voyage or service stipulated, subject to liability for damages caused by negligence

In the case at bar, the parties entered into voyage charter

Does a charter party agreement turn the common carrier into a private one?

It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter of the whole portion of a vessel of one or more persons, provided the charter is limited to the ship only, as in the case of a time-charter or the 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 ship-owner 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.

Later, we ruled in Coastwise Lighterage Corporation vs. Court of Appeals: 15

Although a charter party may transform a common carrier into a private one, the same however is not true in a contract of affreightment . . .