SPOUSES TEODORO v. SPOUSES NICOLAS G.R. No. 157917; August 29, 2012 BERSAMIN, J.: FACTS: Spouses Teodoro and Nanette Peres (Peres) were engaged in the business of transporting students from their respective residences in Paraque City to Don Bosco in Pasong Tamo, Makati City, and back. They employed Clemente Alfaro (Alfaro) as driver of the van. Spouses Nicolas and Teresita Zarate (Zarates) contracted the Peres to transport their son Aaron to and from Don Bosco. Considering that the students were due at Don Bosco by 7:15 a.m., and that they were already running late because of the heavy vehicular traffic on the South Superhighway, Alfaro took the van to an alternate route at about 6:45 a.m. by traversing the narrow path underneath the Magallanes Interchange. The railroad crossing in the narrow path had no railroad warning signs, or watchmen, or other responsible persons manning the crossing. In fact, the bamboo barandilla was up, leaving the railroad crossing open to traversing motorists. At about the time the van was to traverse the railroad crossing, PNR Commuter No. 302 (train), was in the vicinity of the Magallanes Interchange travelling northbound. As the train neared the railroad crossing, Alfaro drove the van eastward across the railroad tracks, closely tailing a large passenger bus. His view of the oncoming train was blocked because he overtook the passenger bus on its left side. The train blew its horn to warn motorists of its approach. The passenger bus successfully crossed the railroad tracks, but the van driven by Alfaro did not. The impact threw nine of the 12 students in the rear, including Aaron, out of the van. Aaron landed in the path of the train, which dragged his body and severed his head, instantaneously killing him. Thus, the Zarates sued the Peres for breach of contract of carriage and the PNR for quasi-delict. The RTC ruled in favor of the Zarates. On appeal, the CA affirmed the findings of the RTC. ISSUE: Whether or not the Peres are liable for breach of contract of carriage? HELD: The petition has no merit. CIVIL LAW: common carrier; extraordinary diligence A common carrier is a person, corporation, firm or association engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering such services to the public. Contracts of common carriage are governed by the provisions on common carriers of the Civil Code, the Public Service Act, and other special laws relating to transportation. A common carrier is required to observe extraordinary diligence, and is presumed to be at fault or to have acted negligently in case of the loss of the effects of passengers, or the death or injuries to passengers. The true test for a common carrier is not the quantity or extent of the business actually transacted, or the number and character of the conveyances used in the activity, but whether the undertaking is a part of the activity engaged in by the carrier that he has held out to the general public as his business or occupation. Applying these considerations to the case before us, there is no question that the

Peres as the operators of a school bus service were: (a) engaged in transporting passengers generally as a business, not just as a casual occupation; (b) undertaking to carry passengers over established roads by the method by which the business was conducted; and (c) transporting students for a fee. Despite catering to a limited clientele, the Peres operated as a common carrier because they held themselves out as a ready transportation indiscriminately to the students of a particular school living within or near where they operated the service and for a fee. Article 1755 of the Civil Code specifies that the common carrier should "carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances." To successfully fend off liability in an action upon the death or injury to a passenger, the common carrier must prove his or its observance of that extraordinary diligence; otherwise, the legal presumption that he or it was at fault or acted negligently would stand. According to Article 1759 of the Civil Code, their liability as a common carrier did not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employee. The Peres were liable for the death of Aaron despite the fact that their driver might have acted beyond the scope of his authority or even in violation of the orders of the common carrier. DENIED. *** FACTS: In June 1996, Nicolas and Teresita Zarate contracted Teodoro and Nanette Perea to transport their (Zarates) son, Aaron Zarate, to and from school. The Pereas were owners of a van being used for private school transport.

At about 6:45am of August 22, 1996, the driver of the said private van, Clemente Alfaro, while the children were on board including Aaron, decided to take a short cut in order to avoid traffic. The usual short cut was a railroad crossing of the Philippine National Railway (PNR). Alfaro saw that the barandilla (the pole used to block vehicles crossing the railway) was up which means it was okay to cross. He then tried to overtake a bus. However, there was in fact an oncoming train but Alfaro no longer saw the train as his view was already blocked by the bus he was trying to overtake. The bus was able to cross unscathed but the vans rear end was hit. During the collision, Aaron, was thrown off the van. His body hit the railroad tracks and his head was severed. He was only 15 years old. It turns out that Alfaro was not able to hear the train honking from 50 meters away before the collision because the vans stereo was playing loudly. The Zarates sued PNR and the Pereas (Alfaro became at-large). Their cause of action against PNR was based on quasi-delict. Their cause of action against the Pereas was based on breach of contract of common carriage. In their defense, the Pereas invoked that as private carriers they were not negligent in selecting Alfaro as their driver as they made sure that he had a drivers license and that he was not involved in any accident prior to his being hired. In short, they observed the diligence of a good father in selecting their employee.

PNR also disclaimed liability as they insist that the railroad crossing they placed there was not meant for railroad crossing (really, thats their defense!). The RTC ruled in favor of the Zarates. The Court of Appeals affirmed the RTC. In the decision of the RTC and the CA, they awarded damages in favor of the Zarates for the loss of earning capacity of their dead son.

The Pereas appealed. They argued that the award was improper as Aaron was merely a high school student; hence, the award of such damages was merely speculative. They cited the case of People vs Teehankee where the Supreme Court did not award damages for the loss of earning capacity despite the fact that the victim there was enrolled in a pilot school. ISSUES: (1) Whether or not the defense of due diligence of a good father by the Pereas is untenable. (2) Whether or not the award of damages for loss of income is proper. HELD: Yes, in both issues. The Defense of Due Diligence of a Good Father of a Family is not tenable in this case. The Pereas are common carriers. They are not merely private carriers. (Prior to this case, the status of private transport for school services or school buses is not well settled as to whether or not they are private or common carriers but they were generally regarded as private carriers). Private transports for schools are common carriers. The Pereas, as the operators of a school bus service were: (a) engaged in transporting passengers generally as a business, not just as a casual occupation; (b) undertaking to carry passengers over established roads by the method by which the business was conducted; and (c) transporting students for a fee. Despite catering to a limited clientele, the Pereas operated as a common carrier because they held themselves out as a ready transportation indiscriminately to the students of a particular school living within or near where they operated the service and for a fee. Being a common carrier, what is required of the Pereas is not mere diligence of a good father. What is specifically required from them by law is extraordinary diligence a fact which they failed to prove in court. Verily, their obligation as common carriers did not cease upon their exercise of diligently choosing Alfaro as their employee. On the Award of Damages for Aarons loss of earning capacity despite him being a high school student at the time of his death, the award is proper. Aaron was enrolled in a reputable school (Don Bosco). He was of normal health and was an able-bodied person. Further, the basis of the computation of his earning capacity was not on what he would have become. It was based on the current minimum wage. The minimum wage was validly used because with his circumstances at the time of his death, it is most certain that had he lived, he would at least be a minimum wage earner by the time he starts working. This is not being speculative at all.

The Teehankee case was different because in that case, the reason why no damages were awarded for loss of earning capacity was that the defendants there were already assuming that the victim would indeed become a pilot hence, that made the assumption speculative. But in the case of Aaron, there was no speculation as to what he might be but whatever hell become, it is certain that he will at the least be earning minimum wage.

De Guzman v. CA G.R. No. L-47822; December 22, 1988 Feliciano, J. Facts: Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings those that he gathered to Manila for resale using 2 six-wheeler trucks. On the return trip to Pangasinan, respondent would load his vehicle with cargo which various merchants wanted delivered, charging fee lower than the commercial rates. Sometime in November 1970, petitioner Pedro de Guzman contracted with respondent for the delivery of 750 cartons of Liberty Milk. On December 1, 1970, respondent loaded the cargo. Only 150 boxes were delivered to petitioner because the truck carrying the boxes was hijacked along the way. Petitioner commenced an action claiming the value of the lost merchandise. Petitioner argues that respondent, being a common carrier, is bound to exercise extraordinary diligence, which it failed to do. Private respondent denied that he was a common carrier, and so he could not be held liable for force majeure. The trial court ruled against the respondent, but such was reversed by the Court of Appeals. Issues: (1) Whether or not private respondent is a common carrier (2) Whether private respondent is liable for the loss of the goods Held: (1) Article 1732 makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity. Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the general community or population, and one who offers services or solicits business only from a narrow segment of the general population. It appears to the Court that private respondent is properly characterized as a common carrier even though he merely "back-hauled" goods for other merchants from Manila to Pangasinan, although such backhauling was done on a periodic or occasional rather than regular or scheduled manner, and even though private respondent's principal occupation was not the carriage of goods for others. There is no dispute that private respondent charged his customers a fee for hauling their goods; that fee frequently fell below commercial freight rates is not relevant here. A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers. (2) 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: a. Flood, storm, earthquake, lightning, or other natural disaster or calamity; b. Act of the public enemy in war, whether international or civil; c. Act or omission of the shipper or owner of the goods; d. The character of the goods or defects in the packing or in the containers; and e. Order or act of competent public authority."

The hijacking of the carrier's truck - does not fall within any of the five (5) categories of exempting causes listed in Article 1734. Private respondent 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. 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." 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 necessary to recall that even common carriers are not made absolute insurers 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. *** FACTS: Ernesto Cendana was engaged in buying up used bottles and scrap metal in Pangasinan. Upon gathering sufficient quantities of such scrap material, respondent would bring such material to Manila for resale. He utilized (2) two six-wheeler trucks which he owned for the purpose. Upon returning to Pangasinan, he would load his vehicle with cargo belonging to different merchants to different establishments in Pangasisnan which respondents charged a freight fee for. Sometime in November 1970, herein petitioner Pedro de Guzman, a merchant and dealer of General Milk Company Inc. in Pangasinan contracted with respondent for hauling 750 cartons of milk. Unfortunately, only 150 cartons made it, as the other 600 cartons were intercepted by hijackers along Marcos Highway. Hence, petitioners commenced an action against private respondent. In his defense, respondent argued that he cannot be held liable due to force majuere, and that he is not a common carrier and hence is not required to exercise extraordinary diligence. On appeal before the Court of Appeals, Cendana urged that the trial court had erred in considering him a common carrier; in finding that he had habitually offered trucking services to the public; in not exempting him from liability on the ground of force majeure; and in ordering him to pay damages and attorneys fees. The Court of Appeals reversed the judgment of the trial court and held that Cendana had been engaged in transporting return loads of freight as a casual occupation a sideline to his scrap iron business and not as a common carrier. De Guzman came to the Supreme Court by way of a Petition for Review. ISSUES: 1. Is respondent a common carrier? 2. Is the respondent liable for the loss of the cartons of milk due to force majeure? ARGUMENTS: 1. Herein respondent is considered as a common carrier. Article 1732 of the New Civil Code avoids any distinction between one whose principal business activity is the carrying of persons or goods or both and one who does such carrying only as an ancillary activity. It also avoids a distinction between a person or enterprise offering transportation services on a regular or scheduled basis and one offering such services on an occasional, episodic, and unscheduled basis.

2. Respondent is not liable for the value of the undelivered merchandise . Article 1734 of the Civil Code- The general rule is established by the article 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: a. Flood, storm, earthquake, lightning or other natural disasters; b. Act of the public enemy, whether international or civil; c. Act or omission of the shipper or owner of the goods; d. Character of the goods or defects in the packing; e. Order or act of competent public authority. Applying the above article, we note firstly that the specific cause alleged in the instant case the hijacking of the carrier's 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 carrier's vehicle must be dealt with under the provisions of Article 1735, in other words, the private respondent 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.

Article 1745: 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 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; 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. (Emphasis supplied)

Under Article 1745 (6) above, a common carrier is held responsible and will not be allowed to divest or to diminish such responsibility even 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."

The decision of the trial court shows that the armed men who held up the second truck owned by private respondent acted with grave, if not irresistible, threat, violence or force, which is an exception of the general rule of Article 1745 (6).

RULING: The Petition for Review on certiorari is hereby DENIED and the Decision of the Court of Appeals dated 3 August 1977 is AFFIRMED.

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 necessary to recall that even common carriers are not made absolute insurers 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 Cendana is not liable for the value of the undelivered merchandise which was lost because of an event entirely beyond private respondent's control. FABRE, JR. vs. COURT OF APPEALS G.R. no. 111127, July 26, 1996 Mendoza, J. FACTS: Petitioner Fabre and his wife were the owners of 1982 model Mazda minibus. They were using the said vehicle as a school bus service for children in Manila. They hired Cabil as their driver. On November 2, 1982, private respondent Word for the World Christian Fellowship (WWCF) arranged with petitioners for the transportation of members of young adult ministry from Manila to La Union and back. While travelling, they met an accident. The bus hit a fence and a coconut tree that caused passengers to be injured including respondent Antonio. The WWCF and Antonio then filed a criminal complaint against the driver, the trial court decided in favor of respondents. All evidence presented showed the negligence of the defendants ultimately resulted to the accident. The Court of Appeals affirmed the decision of the Trial Court. Hence this petition. ISSUE: Whether or not the petitioners are liable for the injuries suffered by the respondents based on culpa contractual and/or culpa aquiliana. RULING: The Court ruled that damages should be awarded based on the theory that petitioners are liable for breach of contract of carriage or culpa contractual or on the theory of quasi delict or culpa aquiliana holding that the relation of passenger and carrier is contractual both in origin and nature, nevertheless the act that breaks the contract may be also a tort. In both sources of obligation, the existence of negligence of petitioners must be determined. In this case, 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 is fully supported by the evidence on record. 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. Thus, the finding of the Court that petitioners are liable under Arts. 2176 and 2180 for quasi delict fully justify that they are guilty of breach of contract of carriage under Arts. 1733, 1755 and 1759 of the Civil Code. ***

Facts: Petitioners Engracio Fabre, Jr. and his wife were owners of a Mazda minibus. They used the bus principally in connection with a bus service for school children which they operated in Manila. It was driven by Porfirio Cabil. On November 2, 1984 private respondent Word for the World Christian Fellowship Inc. (WWCF) arranged with the petitioners for the transportation of 33 members of its Young Adults Ministry from Manila to La Union and back in consideration of which private respondent paid petitioners the amount of P3,000.00. The usual route to Caba, La Union was through Carmen, Pangasinan. However, the bridge at Carmen was under repair, so that petitioner Cabil, who was unfamiliar with the area (it being his first trip to La Union), was forced to take a detour through the town of Ba-ay in Lingayen, Pangasinan. At 11:30 that night, petitioner Cabil came upon a sharp curve on the highway. The road was slippery because it was raining, causing the bus, which was running at the speed of 50 kilometers per hour, to skid to the left road shoulder. The bus hit the left traffic steel brace and sign along the road and rammed the fence of one Jesus Escano, then turned over and landed on its left side, coming to a full stop only after a series of impacts. The bus came to rest off the road. A coconut tree which it had hit fell on it and smashed its front portion. Because of the mishap, several passengers were injured particularly Amyline Antonio. Criminal complaint was filed against the driver and the spouses were also made jointly liable. Spouses Fabre on the other hand contended that they are not liable since they are not a common carrier. The RTC of Makati ruled in favor of the plaintiff and the defendants were ordered to pay jointly and severally to the plaintiffs. The Court of Appeals affirmed the decision of the trial court. Issue: Whether the spouses Fabre are common carriers? Held: Petition was denied. Spouses Fabre are common carriers. The Supreme Court held that 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 this Court has held: 10 Art. 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 whose principal business activity is the carrying of persons or goods or both, 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 scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the general community or population, and one who offers services or solicits business only from a narrow segment of the general population. We think that Article 1732 deliberately refrained from making such distinctions.

FGU Insurance Corporation vs. G.P. Sarmiento Trucking Corporation Posted G.R. No. 141910; August 6, 2002 Vitug, J. FACTS: G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on June 18, 1994, 30 units of Condura S.D. white refrigerators aboard its Isuzu truck driven by Lambert Eroles, to the Central Luzon Appliances in Dagupan City. While traversing the North Diversion Road along McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes. FGU, an insurer of the shipment, paid the value of the covered cargoes (P204,450.00) to Concepcion Industries, Inc.,. Being subrogee of CIIs rights & interests, FGU, in turn, sought reimbursement from GPS. Since GPS failed to heed the claim, FGU filed a complaint for damages & breach of contract of carriage against GPS and Eroles with the RTC. In its answer, respondents asserted that GPS was only the exclusive hauler of CII since 1988, and it was not so engaged in business as a common carrier. Respondents further claimed that the cause of damage was purely accidental. GPS filed a motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed to prove that it was a common carrier. The RTC granted the motion to dismiss on April 30, 1996. It subsequently dismissed the complaint holding that GPS was not a common carrier defined under the law & existing jurisprudence. The subsequent motion for reconsideration having been denied, FGU interposed an appeal to the CA. The CA rejected the FGUs appeal & ruled in favor of GPS. It also denied petitioners motion for reconsideration. ISSUES: 1. WON GPS may be considered a common carrier as defined under the law & existing jurisprudence. 2. WON GPS, either as a common carrier or a private carrier, may be presumed to have been negligent when the goods it undertook to transport safely were subsequently damaged while in its protective custody & possession. 3. Whether the doctrine of Res ipsa loquitur is applicable in the instant case. HELD: 1. The SC finds the conclusion of the RTC and the CA to be amply justified. GPS, being an exclusive contractor & hauler of Concepcion Industries, Inc., rendering/offering its services to no other individual or entity, cannot be considered a common carrier. 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 hire or compensation, offering their services to the public, whether to the public in general or to a limited clientele in particular, but never on an exclusive basis. The true test of a common carrier is the carriage of passengers/goods, providing space for those who opt to avail themselves of its transportation service for a fee. Given accepted standards, GPS scarcely falls within the term common carrier. 2. GPS cannot escape from liability. In culpa contractual, the mere proof of the existence of the contract & the failure of its compliance justify, prima facie, a

corresponding right of relief. The law will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost/suffered. The remedy serves to preserve the interests of the promisee that may include his: 1. Expectation interest interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed; 2. Reliance interest interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made; 3. Restitution interest interest in having restored to him any benefit that he has conferred on the other party. Agreements can accomplish little unless they are made the basis for action. The effect of every infraction is to create a new duty, or to make recompense to the one who has been injured by the failure of another to observe his contractual obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence (normally that of the diligence of a good father of a family or, exceptionally by stipulation or by law such as in the case of common carriers, that of extraordinary diligence) or of the attendance of fortuitous event, to excuse him from his ensuing liability. A default on, or failure of compliance with, the obligation gives rise to a presumption of lack of care & corresponding liability on the part of the contractual obligor the burden being on him to establish otherwise. GPS has failed to do so. Eroles, on the other hand, may not be ordered to pay petitioner without concrete proof of his negligence/fault. The driver, not being a party to the contract of carriage between petitioners principal and defendant, may not be held liable under the agreement. A contract can only bind the parties who have entered into it or their successors who have assumed their personality/juridical position. Consonantly with the axiom res inter alios acta aliis neque nocet prodest, such contract can neither favor nor prejudice a third person. Petitioners civil action against the driver can only be based on culpa aquiliana, which would require the claimant for damages to prove the defendants negligence/fault. 3. Res ipsa loquitur holds a defendant liable where the thing which caused the injury complained of is shown to be under the latters management and the accident is such that, in the ordinary course of things, cannot be expected to happen if those who have its management/control use proper care. In the absence of the defendants explanation, it affords reasonable evidence that the accident arose from want of care. It is not a rule of substantive law and does not create an independent ground of liability. Instead, it is regarded as a mode of proof, or a mere procedural convenience since it furnishes a substitute for, and relieves the plaintiff of, the burden of producing specific proof of negligence. The maxim simply places the burden of going forward with the proof on the defendant. However, resort to the doctrine may only be allowed when: (a) the event is of a kind which does not ordinarily occur in the absence of negligence; (b) other responsible causes are sufficiently eliminated by the evidence (includes the conduct of the plaintiff and third persons); and (c) the indicated negligence is within the scope of the defendants duty to the plaintiff.

Thus, it is not applicable when an unexplained accident may be attributable to one of several causes, for some of which the defendant could not be responsible. Res ipsa loquitur generally finds relevance whether or not a contractual relationship exists between the plaintiff and the defendant, for the inference of negligence arises from the circumstances and nature of the occurrence and not from the nature of the relation of the parties. Nevertheless,for the doctrine to apply, the requirement that responsible causes (other than those due to defendants conduct) must first be eliminated should be understood as being confined only to cases of pure (non-contractual) tort since obviously the presumption of negligence in culpa contractual immediately attaches by a failure of the covenant or its tenor. On the other hand, while the truck driver, whose civil liability is predicated on culpa acquiliana, can be said to have been in control & management of the vehicle, it is not equally shown that the accident has been exclusively due to his negligence. If it were so, the negligence could allow res ipsa loquitur to properly work against him. However, clearly this is not the case. REGIONAL CONTAINER LINES (RCL) OF SINGAPORE vs. THE NETHERLANDS INSURANCE CO. (PHILIPPINES), INC. G.R. No. 168151; September 4, 2009 BRION, J.: Facts of the case: On October 20, 1995, 405 cartons of Epoxy Molding Compound were consigned to be shipped from Singapore to Manila for Temic Telefunken Microelectronics Philippines (Temic). U-Freight Singapore PTE Ltd.[3] (U-Freight Singapore), a forwarding agent based in Singapore, contracted the services of Pacific Eagle Lines PTE. Ltd. (Pacific Eagle) to transport the subject cargo. The cargo was packed, stored, and sealed by Pacific Eagle in its Refrigerated Container. As the cargo was highly perishable, the inside of the container had to be kept at a temperature of 0 Celsius. Pacific Eagle then loaded the refrigerated container on board the M/V Piya Bhum, a vessel owned by RCL, with which Pacific Eagle had a slot charter agreement. RCL duly issued its own Bill of Lading in favor of Pacific Eagle. To insure the cargo against loss and damage, Netherlands Insurance issued a Marine Open Policy in favor of Temic, to cover all losses/damages to the shipment. On October 25, 1995, the M/V Piya Bhum docked in Manila. After unloading the refrigerated container, it was plugged to the power terminal of the pier to keep its temperature constant. Fidel Rocha (Rocha), Vice-President for Operations of Marines Adjustment Corporation, accompanied by two surveyors, conducted a protective survey of the cargo. They found that based on the temperature chart, the temperature reading was constant from October 18, 1995 to October 25, 1995 at 0 Celsius. However, at midnight of October 25, 1995 when the cargo had already been unloaded from the ship the temperature fluctuated with a reading of 33 Celsius. Rocha believed the fluctuation was caused by the burnt condenser fan motor of the refrigerated container. On November 9, 1995, Temic received the shipment. It found the cargo completely damaged. Temic filed a claim for cargo loss against Netherlands Insurance, with supporting claims documents. The Netherlands Insurance paid Temic the sum

ofP1,036,497.00 under the terms of the Marine Open Policy. Temic then executed a loss and subrogation receipt in favor of Netherlands Insurance. Seven months from delivery of the cargo, Netherlands Insurance filed a complaint for subrogation of insurance settlement with the Regional Trial Court, against the unknown owner of M/V Piya Bhum and TMS Ship Agencies (TMS), the latter thought to be the local agent of M/V Piya Bhums unknown owner Netherlands Insurance amended the complaint on January 17, 1997 to implead EDSA Shipping, RCL, Eagle Liner Shipping Agencies, U-Freight Singapore, and U-Ocean (Phils.), Inc. (U-Ocean), as additional defendants. A third amended complaint was later made, impleading Pacific Eagle in substitution of Eagle Liner Shipping Agencies. TMS filed its answer to the original complaint. RCL and EDSA Shipping filed their answers with cross-claim and compulsory counterclaim to the second amended complaint. U-Ocean likewise filed an answer with compulsory counterclaim and cross-claim. During the pendency of the case, U-Ocean, jointly with U-Freight Singapore, filed another answer with compulsory counterclaim. Only Pacific Eagle and TMS filed their answers to the third amended complaint. The defendants all disclaimed liability for the damage caused to the cargo, citing several reasons why Netherland Insurances claims must be rejected. Specifically, RCL and EDSA Shipping denied negligence in the transport of the cargo; they attributed any negligence that may have caused the loss of the shipment to their co-defendants. They likewise asserted that no valid subrogation exists, as the payment made by Netherlands Insurance to the consignee was invalid. By way of affirmative defenses, RCL and EDSA Shipping averred that the Netherlands Insurance has no cause of action, and is not the real party-in-interest, and that the claim is barred by laches/prescription. After Netherlands Insurance had made its formal offer of evidence, the defendants including RCL and EDSA Shipping sought leave of court to file their respective motions to dismiss based on demurrer to evidence. RCL and EDSA Shipping, in their motion, insisted that Netherlands Insurance had (1) failed to prove any valid subrogation, and (2) failed to establish that any negligence on their part or that the loss was sustained while the cargo was in their custody. On May 22, 2002, the trial court handed down an Order dismissing Civil Case No. 96-78612 on demurrer to evidence. The trial court ruled that while there was valid subrogation, the defendants could not be held liable for the loss or damage, as their respective liabilities ended at the time of the discharge of the cargo from the ship at the Port of Manila. Netherlands Insurance seasonably appealed the order of dismissal to the CA. On May 26, 2004, the CA disposed of the appeal as follows: WHEREFORE, in view of the foregoing, the dismissal of the complaint against defendants Regional Container Lines and Its local agent, EDSA Shipping Agency, is REVERSED and SET ASIDE. The dismissal of the complaint against the other defendants is AFFIRMED. Pursuant to Section 1, Rule 33 of the

1997 Rules of Civil Procedure, defendants Regional Container Lines and EDSA Shipping Agency are deemed to have waived the right to present evidence. ISSUE: The sole issue for our resolution is whether the CA correctly held RCL and EDSA Shipping liable as common carriers under the theory of presumption of negligence. RULING: The present case is governed by the following provisions of the Civil Code: ART. 1733. 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. Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles1755 and 1756. 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 of 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. ART. 1735. In all cases other that those mentioned in Nos. 1, 2, 3, 4 and 5 of the preceding article, if the goods are lost, destroyed, or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required by article 1733. ART. 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the sane are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of articles 1738. ART. 1738. The extraordinary liability of the common carrier continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place of destination, until the consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them. ART. 1742. Even if the loss, destruction, or deterioration of the goods should be caused by the character of the goods, or the faulty nature of the packing or of the containers, the common carrier must exercise due diligence to forestall or lessen the loss. In the present case, RCL and EDSA Shipping disclaim any responsibility for the loss or damage to the goods in question. They contend that the cause of the damage to

the cargo was the fluctuation of the temperature in the reefer van, which fluctuation occurred after the cargo had already been discharged from the vessel; no fluctuation, they point out, arose when the cargo was still on board M/V Piya Bhum. As the cause of the damage to the cargo occurred after the same was already discharged from the vessel and was under the custody of the arrastre operator (International Container Terminal Services, Inc. or ICTSI), RCL and EDSA Shipping posit that the presumption of negligence provided in Article 1735 of the Civil Code should not apply. What applies in this case is Article 1734, particularly paragraphs 3 and 4 thereof, which exempts the carrier from liability for loss or damage to the cargo when it is caused either by an act or omission of the shipper or by the character of the goods or defects in the packing or in the containers. Thus, RCL and EDSA Shipping seek to lay the blame at the feet of other parties. We do not find the arguments of RCL and EDSA Shipping meritorious. A common carrier is presumed to have been negligent if it fails to prove that it exercised extraordinary vigilance over the goods it transported.[8] When the goods shipped are either lost or arrived in damaged condition, a presumption arises against the carrier of its failure to observe that diligence, and there need not be an express finding of negligence to hold it liable.[9] To overcome the presumption of negligence, the common carrier must establish by adequate proof that it exercised extraordinary diligence over the goods. It must do more than merely show that some other party could be responsible for the damage.[10] In the present case, RCL and EDSA Shipping failed to prove that they did exercise that degree of diligence required by law over the goods they transported. Indeed, there is sufficient evidence showing that the fluctuation of the temperature in the refrigerated container van, as recorded in the temperature chart, occurred after the cargo had been discharged from the vessel and was already under the custody of the arrastre operator, ICTSI. This evidence, however, does not disprove that the condenser fan which caused the fluctuation of the temperature in the refrigerated container was not damaged while the cargo was being unloaded from the ship. It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier;[11] RCL and EDSA Shipping failed to dispute this. RCL and EDSA Shipping could have offered evidence before the trial court to show that the damage to the condenser fan did not occur: (1) while the cargo was in transit; (2) while they were in the act of discharging it from the vessel; or (3) while they were delivering it actually or constructively to the consignee. They could have presented proof to show that they exercised extraordinary care and diligence in the handling of the goods, but they opted to file a demurrer to evidence. As the order granting their demurrer was reversed on appeal, the CA correctly ruled that they are deemed to have waived their right to present evidence,[12] and the presumption of negligence must stand. It is for this reason as well that we find RCL and EDSA Shippings claim that the loss or damage to the cargo was caused by a defect in the packing or in the containers. To exculpate itself from liability for the loss/damage to the cargo under any of the causes, the common carrier is burdened to prove any of the causes in

Article 1734 of the Civil Code claimed by it by a preponderance of evidence. If the carrier succeeds, the burden of evidence is shifted to the shipper to prove that the carrier is negligent.[13] RCL and EDSA Shipping, however, failed to satisfy this standard of evidence and in fact offered no evidence at all on this point; a reversal of a dismissal based on a demurrer to evidence bars the defendant from presenting evidence supporting its allegations. Heirs of Jose Marcial K. Ochoa vs. G & S Transport Corporation G.R. No. 170071, March 9, 2011 Del Castillo, J. FACTS: On the night of March 10, 1995, Jose Marcial K. Ochoa died while on board an Avis taxicab owned and operated by G & S Transport Corporation, a common carrier. The death certificate issued by the Office of the Civil Registrar of Quezon City cited the cause of his death as vehicular accident it was found that the death of Jose Marcial Ochoa was caused by negligence on the part of the taxicab driver employed by G & S Transport Corporation, Bibiano Padilla. However, the taxicab driver, Bibiano Padilla, was acquitted of the crime of reckless imprudence resulting in homicide. Regardless, the petitioners alleged that respondent, as a common carrier, was under legal obligation to observe and exercise extraordinary diligence in transporting its passengers to their destination safely and securely. The contract was entered the moment Ochoa entered the vehicle owned by the respondent. The failure of the respondent, as evidenced by the death of Ochoa, led the petitioners to aver that they, the respondents, are liable for having breached the contract of common carriage. The heirs thus prayed for G & S to pay them actual damages, moral damages, exemplary damages, and attorneys fees and expenses of litigation. ISSUE: Whether or not the petitioner may proceed with the civil action given that there was already an acquittal in the related criminal case. HELD: The Supreme Court declared the ruling of Cancio, Jr., v. Isip, which stated that in the instant case, it must be stressed that the action filed by petitioner is an independent civil action, which remains separate and distinct from any criminal prosecution based on the same act. Not being deemed instituted in the criminal action based on culpa criminal, a ruling on the culpability of the offender will have no bearing on said independent civil action based on an entirely different cause of action, i.e., culpa contractual. Considering Article 31 of the Civil Code, the petitioners claim for damages is valid considering that the civil action, being based on an obligation, proceeded independently of the criminal proceedings and regardless of the result of the latter. Thus, the respondent is liable to pay the petitioners for damages because by not transporting Jose Marcial Ochoa safely to his destination the former breached its contract with the passenger. *** Facts: Jose died while on board an Avis taxicab owned and operated by G&S, which was cruising at high speed when it tried to overtake another vehicle, a ten-wheeler truck, which it failed to do and instead rammed the railing throwing itself off the fly-over. Joses wife and minor children demanded indemnity in the total amount of P15,000,000. Unheeded, Ruby filed a complaint for damages. G&S answered that the cab was bumped by an on-rushing van causing the taxicab to ram the railings and fall

over. They posited that it was a fortuitous event and/or the fault or negligence of the driver of the van that hit the cab. It likewise claimed that it exercised the diligence required of a good father of a family in the selection and supervision of its employees The RTC found the driver of G&S to be negligent and the latter did not prove exercise of diligence of a good father of a family in the selection and supervision of its employees as insufficient. The heirs filed a motion for partial reconsideration asking for moral damages while G&S filed an appeal. The trial court declared them entitled to moral and exemplary damages. Because of this, G & S filed another Notice of Appeal. The CA ruled in favor of the heirs. With respect to the award of P6,537,244.96 for Joses loss of earning capacity, the CA declared the same unwarranted. It found the Certification issued by Joses employer, the USAID, as self-serving, unreliable, and biased. While said certification states that Jose Marcial was earning an annual salary of P450,844.49 at the time of his untimely demise, the CA noted that same is unsupported by competent evidence such as income tax returns or receipts. The CA found the award of P300,000 excessive and thus reduced the same to P200,000 as to make it proportionate to the award of exemplary damages which is P50,000. Hence, the present petition filed by both G&S and the heirs. Issue: Whether G&S is liable for damages Ruling: Both the trial court and the CA found that the accident which led to Jose Marcials death was due to the reckless driving and gross negligence of G & S driver, Padilla, thereby holding G & S liable to the heirs of Jose Marcial for breach of contract of carriage. The action filed by the heirs is primarily for the recovery of damages arising from breach of contract of carriage allegedly committed by G & S. Clearly, it is an independent civil action arising from contract which is separate and distinct from the criminal action for reckless imprudence resulting in homicide filed by the heirs against Padilla by reason of the same incident. Hence, regardless of Padillas acquittal or conviction in said criminal case, same has no bearing in the resolution of the present case. The testimony of Joses wife that he was earning around P450,000 a year was corroborated by a Certification issued by the USAID. It is highly improbable that such an agency will issue a certification containing unreliable information regarding an employees income. Besides, there exists a presumption that official duty has been regularly performed. We thus find as sufficient and "somehow proportional to and in approximation of the suffering inflicted" an award of moral damages in an amount similar to that awarded in Victory which is P100,000.