Transportation Cases

Iron Bulk Shipping Phils. Co. LTD. vs Remington Industrial Sales Corp. (2003)

Iron Remington Industrial Sales Corp. Ordered from Wangs Co. 194 packages of hot steel sheets . Goods were loaded on board vessel MV Indian Reliance from Poland upon issuance of a clean Bill of Lading. However, upon arrival in Manila, they were already rusty. Remington sued Iron Bulk Shipping and insurer Pioneer Asia insurance. The court ruled for Remington relying on the Bills of Lading which stated that the goods were in good condition when loaded. Iron Bulks assails the reliance of the court on the Pro Forma Bills of Lading in establishing the condition of the cargo. Can a Bill of lading be relied upon to indicate the cargo condition upon loading?

Held: Yes. There is no merit to petitioner's contention that the Bill of Lading covering the subject cargo cannot be relied upon to indicate the condition of the cargo upon loading. It is settled that a bill of lading has a two-fold character. In Phoenix Assurance Co., Ltd. vs. United States Lines, we held that: [A] bill of lading operates both as a receipt and as a contract. It is a receipt for the goods shipped and a contract to transport and deliver the same as therein stipulated. As a receipt, it recites the date and place of shipment, describes the goods as to quantity, weight, dimensions, identification marks and condition, quality and value. As a contract, it names the contracting parties, which include the consignee, fixes the route, destination, and freight rate or charges, and stipulates the rights and obligations assumed by the parties. We find no error in the findings of the appellate court that the questioned bill of lading is a clean bill of lading, i.e., it does not indicate any defect in the goods covered by it, as shown by the notation, "CLEAN ON BOARD" and "Shipped at the Port of Loading in apparent good condition on board the vessel for carriage to Port of Discharge".

The fact that the issued bill of lading is pro forma is of no moment. If the bill of lading is not truly reflective of the true condition of the cargo at the time of loading to the effect that the said cargo was indeed in a damaged state, the carrier could have refused to accept it, or at the least, made a marginal note in the bill of lading indicating the true condition of the merchandise. But it did not. On the contrary, it accepted the subject cargo and even agreed to the issuance of a clean bill of lading without taking any exceptions with respect to the recitals contained therein. Since the carrier failed to annotate in the bill of lading the alleged damaged condition of the cargo when it was loaded, said carrier and the petitioner, as its representative, are bound by the description appearing therein and they are now estopped from denying the contents of the said bill.

Even granting, for the sake of argument, that the subject cargo was already in a damaged condition at the time it was accepted for transportation, the carrier is not relieved from its responsibility to exercise due care in handling the merchandise and in employing the necessary precautions to prevent the cargo from further deteriorating. Under Article 1742 of the Civil Code, even if the loss, destruction, or deterioration of the goods should be caused, among others, by the character of the goods, the common carrier must exercise due diligence to forestall or lessen the loss. EXTRAORDINARY RESPONSIBILITY LASTS FROM THE TIME THE GOODS ARE UNCONDITIONALLY PLACED IN ITS POSSESSION UNTIL THE SAME ARE DELIVERED TO THE CONSIGNEE. UNLESS PROVEN TO HAVE BEEN OBSERVED, COMMON CARRIER IS PRESUMED TO HAVE BEEN AT FAULT OR TO HAVE ACTED NEGLIGENTLY.

2) Sps Marcelo Landingin vs PANTRANCO (1970)

Petitioners two spouses’ respective daughters were among the passengers who rode the Pantranco Bus field trip travel from Dagupan City to Baguio City. When the Bus was travelling uphill the Kennon Road, the Bus stalled for a few moments with the motor ceasing to function causing the bus to slide back unchecked. When the driver suddenly swerved and steered the bus toward the mountain side causing petitioner’s daughters among others to panick and jump out from the open side of the bus resulting to their injuries that caused their death. The malfunctioning resulted from the breakage of the cross joint which the defendants claim to have inspected as in order the day before. The court a quo concluded the accident was caused by a fortuitous event or an act of God brought about by some extra-ordinary circumstances independent of the will of the Pantranco or its employees. Does the mere fact that the bus was inspected only recently and found to be in order would exempt the carrier from liability?

Held: No. When a passenger dies or is injured, the presumption is that the common carrier is at fault or that it acted negligently. This presumption is only rebutted by proof on the carrier's part that it observed the "extraordinary diligence" required in Article 1733 and the "utmost diligence required of a very cautious person." In the instant case it appears that although the day before the broken joint was duly inspected and found to be in order, due regard for all the circumstances like the bus was heavily laden with passengers; that it would traverse mountainous, circuitous and ascending roads were not considered in connection with the said inspection. Unless it is shown that the particular circumstances under which the bus would travel were also considered, the mere inspection would not exempt the carrier from liability.

FABRE VS COURT OF APPEALS

Spouses Fabre owned a minibus which they operated as school service for children in Manila. They hired a driver who took the school children to and from St. Scholastica’s college in Manila On a certain date , it was engaged by World For the World Christian Fellowship to transport its 33 members for Young Adults Ministry to La union. En route to La Union , the Bus passed over speeding through Lingayen Pangasinan where it encountered a sharp curve that caused it to turn turtle after hitting a traffic brace and ramming a fence. Petitioners deny liaibility for the death or injuries through the negligence of their driver because they used due diligence in employing the driver a; that they are not a Common Carrier because their bus was merely hired and that the World for the World had the control of the driver. Are spouses liable for being engaged in contract of carriage?

Held: YES. Common carriers are liable for the death of or injuries to passengers through the negligence or wilful acts of the former's 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. 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: 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

DUTY OF COMMON CARRIER, ARTICLE 1755 NEW CIVIL CODE. — As a common carrier defendant-appellant was duty bound to carry its passengers "safely as far as human care and foresight can provide using the utmost diligence of a very cautious person, with due regard for all the circumstances."