Transportationlaw cases

8/12/2019 Transportationlaw cases

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!or all $ho "a. desire his or its services, undertaes, by special agreement in

a particular instance only, to transport &oods or persons !ro" one place to

another either &ratuitousl. or !or hire#11The provisions on ordinar. contracts

o! the +ivil +ode &overn the contract o! private carria&e#The dili&ence

re3uired o! a private carrier is onl. ordinar., that is, the dili&ence o! a &ood

!ather o! the !a"il.# In contrast, a co""on carrier is a person, corporation,

!ir" or association en&a&ed in the %usiness o! carr.in& or transportin&

passen&ers or &oods or %oth, %. land, $ater, or air, !or co"pensation, offeringsuch services to the public#1*+ontracts o! co""on carria&e are &overned %.

the provisions on co""on carriers o! the +ivil +ode, the Pu%lic Service

ct,1B and other special la$s relatin& to transportation# co""on carrier is

re3uired to o%serve e?traordinar. dili&ence, and is presu"ed to %e at !ault or to

have acted ne&li&entl. in case o! the loss o! the e!!ects o! passen&ers, or the

death or in;uries to passen&ers#1

In relation to co""on carriers, the +ourt de!ined pu%lic use in the !ollo$in&

ter"s in United States v. Tan Piaco,1viC'

DPu%lic useE is the sa"e as Duse %. the pu%licE# The essential !eature o! thepu%lic use is not con!ined to privile&ed individuals, %ut is open to the

inde!inite pu%lic# It is this inde!inite or unrestricted 3ualit. that &ives it its

pu%lic character# In deter"inin& $hether a use is pu%lic, $e "ust loo not onl.

to the character o! the %usiness to %e done, %ut also to the proposed "ode o!

doin& it# I! the use is "erel. optional $ith the o$ners, or the pu%lic %ene!it is

"erel. incidental, it is not a pu%lic use, authoriCin& the e?ercise o! the

;urisdiction o! the pu%lic utilit. co""ission# There "ust %e, in &eneral, a ri&ht

$hich the la$ co"pels the o$ner to &ive to the &eneral pu%lic# It is not enou&h

that the &eneral prosperit. o! the pu%lic is pro"oted# Pu%lic use is not

s.non."ous $ith pu%lic interest# The true criterion %. $hich to ;ud&e thecharacter o! the use is $hether the pu%lic "a. en;o. it %. ri&ht or onl. %.

per"ission#

InDe Guzman v. Court of ppeals!16 the +ourt noted that rticle 1FB* o! the

+ivil +ode avoided an. distinction %et$een a person or an enterprise o!!erin&

transportation on a re&ular or an isolated %asis< and has not distin&uished a

carrier o!!erin& his services to the &eneral pu%lic, that is, the &eneral

co""unit. or population, !ro" one o!!erin& his services onl. to a narro$

se&"ent o! the &eneral population#

Nonetheless, the concept o! a co""on carrier e"%odied in rticle 1FB* o! the+ivil +ode coincides neatl. $ith the notion o! pu%lic service under the Pu%lic

Service ct, $hich supple"ents the la$ on co""on carriers !ound in the

+ivil +ode# Pu%lic service, accordin& to Section 1B, para&raph (%) o! the

Pu%lic Service ct, includes'

? ? ? ever. person that no$ or herea!ter "a. o$n, operate, "ana&e, or

control in the Philippines, !or hire or co"pensation, $ith &eneral or li"ited

client=le, $hether per"anent or occasional, and done !or the &eneral %usiness

purposes, an. co""on carrier, railroad, street rail$a., traction rail$a.,su%$a. "otor vehicle, either !or !rei&ht or passen&er, or %oth, $ith or $ithout

!i?ed route and $hatever "a. %e its classi!ication, !rei&ht or carrier service o!

an. class, e?press service, stea"%oat, or stea"ship line, pontines, !erries and

$ater cra!t, en&a&ed in the transportation o! passen&ers or !rei&ht or %oth,

ship.ard, "arine repair shop, ice2re!ri&eration plant, canal, irri&ation s.ste",

&as, electric li&ht, heat and po$er, $ater suppl. and po$er petroleu",

se$era&e s.ste", $ire or $ireless co""unications s.ste"s, $ire or $ireless

%roadcastin& stations and other si"ilar pu%lic services# ? ? ?#1F

Given the %readth o! the a!ore3uoted characteriCation o! a co""on carrier,

the +ourt has considered as co""on carriers pipeline operators,1H custo"%roers and $arehouse"en,19 and %ar&e operators* even i! the. had li"ited

client=le#

s all the !ore&oin& indicate, the true test !or a co""on carrier is not the

3uantit. or e?tent o! the %usiness actuall. transacted, or the nu"%er and

character o! the conve.ances used in the activit., %ut $hether the undertain&

is a part o! the activit. en&a&ed in %. the carrier that he has held out to the

&eneral pu%lic as his %usiness or occupation# I! the undertain& is a sin&le

transaction, not a part o! the &eneral %usiness or occupation en&a&ed in, as

advertised and held out to the &eneral pu%lic, the individual or the entit.renderin& such service is a private, not a co""on, carrier# The 3uestion "ust

%e deter"ined %. the character o! the %usiness actuall. carried on %. the

carrier, not %. an. secret intention or "ental reservation it "a. entertain or

assert $hen char&ed $ith the duties and o%li&ations that the la$ i"poses

"ard of Damages for aron#s loss of earning capacity despite he being a

high school student at the time of his death

The a$ard is proper# aron $as enrolled in a reputa%le school (0on >osco)#

/e $as o! nor"al health and $as an a%le2%odied person# urther, the %asis o!

the co"putation o! his earnin& capacit. $as not on $hat he $ould have%eco"e# It $as %ased on the current "ini"u" $a&e# The "ini"u" $a&e $as


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validl. used %ecause $ith his circu"stances at the ti"e o! his death, it is "ost

certain that had he lived, he $ould at least %e a "ini"u" $a&e earner %. the

ti"e he starts $orin This is not %ein& speculative at all#

The Teehanee case $as di!!erent %ecause in that case, the reason $h. no

da"a&es $ere a$arded !or loss o! earnin& capacit. $as that the de!endants

there $ere alread. assu"in& that the victi" $ould indeed %eco"e a pilot :

hence, that "ade the assu"ption speculative# >ut in the case o! aron, there$as no speculation as to $hat he "i&ht %e : %ut $hatever hell %eco"e, it is

certain that he $ill at the least %e earnin& "ini"u" $a&e

Iron >ul Shippin& Phils# +o# 8T0# vs -e"in&ton Industrial Sales +orp#(*B)

Iron -e"in&ton Industrial Sales +orp# rdered !ro" 7an&s +o# 19paca&es o! hot steel sheets # Goods $ere loaded on %oard vessel K@ Indian-eliance !ro" Poland upon issuance o! a clean >ill o! 8adin /o$ever, uponarrival in Kanila, the. $ere alread. rust.# -e"in&ton sued Iron >ul

Shippin& and insurer Pioneer sia insurance# The court ruled !or -e"in&tonrel.in& on the >ills o! 8adin& $hich stated that the &oods $ere in &oodcondition $hen loaded# Iron >uls assails the reliance o! the court on the Proor"a >ills o! 8adin& in esta%lishin& the condition o! the car&o# +an a >ill o!ladin& %e relied upon to indicate the car&o condition upon loadin&L/eld' es#There is no "erit to petitionerMs contention that the >ill o! 8adin& coverin& thesu%;ect car&o cannot %e relied upon to indicate the condition o! the car&o uponloadin It is settled that a %ill o! ladin& has a t$o2!old character# In Phoeni?ssurance +o#, 8td# vs# 5nited States 8ines, $e held that' O %ill o! ladin&operates %oth as a receipt and as a contract# It is a receipt !or the &oods shippedand a contract to transport and deliver the sa"e as therein stipulated# s a

receipt, it recites the date and place o! ship"ent, descri%es the &oods as to3uantit., $ei&ht, di"ensions,identi!ication "ars and condition, 3ualit. andvalue# s a contract, it na"es the contractin& parties,$hich include theconsi&nee, !i?es the route, destination, and !rei&ht rate or char&es, andstipulates t he ri&hts and o%li&ations assu"ed %. the parties# 7e !ind no errorin the !indin&s o! the appellate court that the 3uestioned %ill o! ladin& is a clean

%ill o! ladin&, i#e#, it does not indicate an. de!ect in the &oods covered %. it, assho$n %. the notation, +8N N >-0 and Shipped at the Port o!8oadin& in apparent &ood condition on %oard the vessel !or carria&e to Port o!0ischar&e#The !act that the issued %ill o! ladin& is pro !or"a is o! no "o"ent#I! the %ill o! ladin& is not trul.

re!lective o! the true condition o! the car&o at

the ti"e o! loadin& to the e!!ect that the said car&o $as indeed in a da"a&edstate, the carrier could have re!used to accept it, or at the least, "ade a"ar&inal

note in the %ill o! ladin& indicatin& the true condition o! the "erchandise# >utit did not# nthe contrar., it accepted the su%;ect car&o and even a&reed to theissuance o! a clean %ill o! ladin& $ithout tain& an. e?ceptions $ith respect tothe recitals contained therein# Since the carrier !ailed t o annotate in the %ill o!ladin& the alle&ed da"a&ed condition o! the car&o $hen it $as loaded, saidcarrier and the petitioner, as its representative, are %ound %. the descriptionappearin& therein and t he. are no$ estopped !ro" den.in& the contents o!the said %ill#ven &rantin&, !or the sae o! ar&u"ent, that the su%;ect car&o$as alread. in a da"a&ed condition at the ti"e it $as accepted !ortransportation, the carrier is not relieved !ro" its responsi%ilit. to e?ercisedue care in handlin& the "erchandise and in e"plo.in& the necessar.

precautions to prevent the car&o !ro" !urther deterioratin 5nder rticle1F* o! the +ivil +ode, even i! the loss,destruction, or deterioration o! the&oods should %e caused, a"on& others, %. the character o! the &oods, theco""on carrier "ust e?ercise due dili&ence to !orestall or lessen theloss#QT--0IN- -SPNSI>I8IT 8STS -K T/ TIKT/ G0S - 5N+N0ITIN88P8+0 IN ITS PSSSSIN5NTI8 T/ SK - 08I@-0 T T/ +NSIGN# 5N8SSP-@NT /@ >N >S-@0, +KKN +--I- ISP-S5K0 T /@ >N T 58T - T /@+T0

NG8IGNT8#

FGU INSURANCE CORPORATION,Petitioners,vs#THE COURT OF APPEALS, SAN MIGUEL CORPORATION, and

ESTATE OF ANG GUI, represented by LUCIO, JULIAN, and JAIME,

all surnaed ANG, and CO TO,-espondents#

G!R! N"! #$%&%$! Mar'( )#, *%%+

ESTATE OF ANG GUI, Represented by LUCIO, JULIAN and JAIME,all surnaed ANG, and CO TO,Petitioners,vs#THE HONORALE COURT OF APPEALS, SAN MIGUEL CORP!,

and FGU INSURANCE CORP!,-espondents#

0 + I S I N

CHICO-NA.ARIO,$

#'

>e!ore 5s are t$o separate Petitions !or revie$ assailin& the 0ecision1o! the

+ourt o! ppeals in +2G#-# +@ No# 96* entitled, San Ki&uel
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+orporation, Plainti!!2ppellee versus state o! n& Gui, represented %.

8ucio, Julian and Jai"e, all surna"ed n&, and +o To, 0e!endants2

ppellants, Third:Part. Plainti!!s versus G5 Insurance +orporation, Third2

Part. 0e!endant2ppellant, $hich a!!ir"ed in totothe decision*o! the

-e&ional Trial +ourt o! +e%u +it., >ranch **# The dispositive portion o! the

+ourt o! ppeals decision reads'

7/--, !or all the !ore&oin&, ;ud&"ent is here%. rendered as !ollo$s'

1) rderin& de!endants to pa. plainti!! the su" o! P1,B6,19F# and an

interest o! 6R per annu" to %e reconed !ro" the !ilin& o! this case on

cto%er *, 199 8ucio, !or to$a&e %. KAT N+, the

!ollo$in& car&oes'

>ill o! 8adin& No# Ship"ent 0estination

1 *, cases Pale Pilsen stancia, Iloilo

B cases +erveCa Ne&ra stancia, Iloilo

* 1, cases Pale Pilsen San Jose, nti3ue

* cases +erveCa Ne&ra San Jose, nti3ue

The consi&nee !or the car&oes covered %. >ill o! 8adin& No# 1 $as SK+s

>eer Karetin& 0ivision (>K0)2stancia >eer Sales !!ice, stancia, Iloilo,

$hile the consi&nee !or the car&oes covered %. >ill o! 8adin& No# * $as

SK+s >K02San Jose >eer Sales !!ice, San Jose, nti3ue#

The 0A> 8ucio $as to$ed %. the KAT N+ all the $a. !ro" Kandaue +it.

to San Jose, nti3ue# The vessels arrived at San Jose, nti3ue, at a%out one

ocloc in the a!ternoon o! B Septe"%er 19F9# The tu&%oat KAT N+ le!t

the %ar&e i""ediatel. a!ter reachin& San Jose, nti3ue#

7hen the %ar&e and tu&%oat arrived at San Jose, nti3ue, in the a!ternoon o!

B Septe"%er 19F9, the clouds over the area $ere dar and the $aves $ere

alread. %i The arrastre $orers unloadin& the car&oes o! SK+ on %oard the

0A> 8ucio %e&an to co"plain a%out their di!!icult. in unloadin& the car&oes#

SK+s 0istrict Sales Supervisor, ernando Kaca%ua&, re3uested N+s

representative to trans!er the %ar&e to a sa!er place %ecause the vessel "i&ht

not %e a%le to $ithstand the %i& $aves#

N+s representative did not heed the re3uest %ecause he $as con!identthat the %ar&e could $ithstand the $aves# This, not$ithstandin& the !act that

at that ti"e, onl. the KAT N+ $as le!t at the $har! o! San Jose, nti3ue,

as all other vessels alread. le!t the $har! to see shelter# 7ith the $aves

&ro$in& %i&&er and %i&&er, onl. Ten Thousand Seven /undred Ninet.

(1,F9) cases o! %eer $ere dischar&ed into the custod. o! the arrastre

operator#

t a%out ten to eleven ocloc in the evenin& o! 1 cto%er 19F9, the cre$ o!

0A> 8ucio a%andoned the vessel %ecause the %ar&es rope attached to the

$har! $as cut o!! %. the %i& $aves# t around "idni&ht, the %ar&e run
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a&round and $as %roen and the car&oes o! %eer in the %ar&e $ere s$ept a$a.#

s a result, N+ !ailed to deliver to SK+s consi&nee T$ent.2Nine

Thousand T$o /undred Ten (*9,*1) cases o! Pale Pilsen and ive /undred

i!t. () cases o! +erveCa Ne&ra# The value per case o! Pale Pilsen $as

ort.2ive Pesos and T$ent. +entavos (P#*)# The value o! a case o!

+erveCa Ne&ra $as ort.2Seven Pesos and Ten +entavos (PF#1), hence,

SK+s clai" a&ainst N+ a"ounted to ne Killion Three /undred ort.2

Si? Thousand ne /undred Ninet.2Seven Pesos (P1,B6,19F#)#

s a conse3uence o! the incident, SK+ !iled a co"plaint !or >reach o!

+ontract o! +arria&e and 0a"a&es a&ainst N+ !or the a"ount o! ne

Killion Three /undred ort.2Si? Thousand ne /undred Ninet.2Seven Pesos

(P1,B6,19F#) plus interest, liti&ation e?penses and T$ent.2ive Percent

(*R) o! the total clai" as attorne.s !ees#

5pon n& Guis death, N+, as a partnership, $as dissolved hence, on *6Januar. 199B, SK+ !iled a second a"ended co"plaint $hich $as ad"itted %.

the +ourt i"pleadin& the survivin& partner, +o To and the state o! n& Gui

represented %. 8ucio, Julian and Jai"e, all surna"ed n The su%stituted

de!endants adopted the ori&inal ans$er $ith counterclai" o! N+ since the

su%stantial alle&ations o! the ori&inal co"plaint and the a"ended co"plaint

are practicall. the sa"e#

N+ ad"itted that the cases o! %eer Pale Pilsen and +erveCa Ne&ra

"entioned in the co"plaint $ere indeed loaded on the vessel %elon&in& to

N+# It clai"ed ho$ever that it had an a&ree"ent $ith SK+ that N+$ould not %e lia%le !or an. losses or da"a&es resultin& to the car&oes %.

reason o! !ortuitous event# Since the cases o! %eer Pale Pilsen and +erveCa

Ne&ra $ere lost %. reason o! a stor", a !ortuitous event $hich %attered and

sun the vessel in $hich the. $ere loaded, the. should not %e held lia%le#

N+ !urther asserted that there $as an a&ree"ent %et$een the" and SK+ to

insure the car&oes in order to recover inde"nit. in case o! loss# Pursuant to

that a&ree"ent, the car&oes to the e?tent o! T$ent. Thousand (*,) cases

$as insured $ith G5 Insurance +orporation (G5) !or the total a"ount o!

i&ht /undred i!t.2i&ht Thousand ive /undred Pesos (PHH,#) per

Karine Insurance Polic. No# *991#

Su%se3uentl., N+, $ith leave o! court, !iled a Third2Part. +o"plaint

a&ainst G5, alle&in& that %e!ore the vessel o! N+ le!t !or San Jose,

nti3ue $ith the car&oes o$ned %. SK+, the car&oes, to the e?tent o!

T$ent. Thousand (*,) cases, $ere insured $ith G5 !or a total a"ount

o! i&ht /undred i!t.2i&ht Thousand ive /undred Pesos (PHH,#)

under Karine Insurance Polic. No# *991# N+ !urther alle&ed that on or

a%out * cto%er 19F9, %. reason o! ver. stron& $inds and heav. $aves

%rou&ht a%out %. a passin& t.phoon, the vessel run a&round near the vicinit.

o! San Jose, nti3ue, as a result o! $hich, the vessel $as totall. $reced and

its car&oes o$ned %. SK+ $ere lost andAor destro.ed# ccordin& to N+,

the loss o! said car&oes occurred as a result o! riss insured a&ainst in the

insurance polic. and durin& the e?istence and li!eti"e o! said insurance

polic.# N+ $ent on to assert that in the re"ote possi%ilit. that the court

$ill order N+ to pa. SK+s clai", the third2part. de!endant corporation

should %e held lia%le to inde"ni!. or rei"%urse N+ $hatever a"ounts, or

da"a&es, it "a. %e re3uired to pa. to SK+#

In its ans$er to the Third2Part. co"plaint, third2part. de!endant G5

ad"itted the e?istence o! the Insurance Polic. under Karine +over Note No#

*991 %ut "aintained that the alle&ed loss o! the car&oes covered %. the said

insurance polic. cannot %e attri%uted directl. or indirectl. to an. o! the riss

insured a&ainst in the said insurance polic.# ccordin& to G5, it is onl.

lia%le under the polic. to Third2part. Plainti!! N+ andAor Plainti!! SK+ in

case o! an. o! the !ollo$in&'

a) total loss o! the entire ship"ent

8ucio $as the pro?i"ate cause o! the loss o! the car&oes< and *) The

respondent court acted $ith &rave a%use o! discretion $hen it ruled that the

appeal $as $ithout "erit despite the !act that said court had accepted the

decision in +ivil +ase No# -219B1, as a!!ir"ed %. the +ourt o! ppeals and

the Supre"e +ourt, as res udicata#

-ulin& o! the +ourt

irst, $e shall endeavor to dispose o! the co""on issue raised %. %oth

petitioners in their respective petitions !or revie$, that is, $hether or not the

doctrine o! res udicataapplies in the instant case#

It is N+s contention that the decision in +ivil +ase No# -219B1,$hich

$as decided in its !avor, constitutes res udicata$ith respect to the issues

raised in the case at %ar#

The contention is $ithout "erit# There can %e no res udicataas %et$een

+ivil +ase No# -219B1 and the case at %ar# In order !or res udicatato %e

"ade applica%le in a case, the !ollo$in& essential re3uisites "ust %e present'

1) the !or"er ;ud&"ent "ust %e !inal< *) the !or"er ;ud&"ent "ust have %eenrendered %. a court havin& ;urisdiction over the su%;ect "atter and the parties 8ucio, $hile in the instant case, the su%;ect "atter o! liti&ation is the loss

o! the car&oes o! SK+, as shipper, loaded in the 0A> 8ucio and the resultin&

!ailure o! N+ to deliver to SK+s consi&nees the lost car&o# ther$ise

stated, the controvers. in the !irst case involved the ri&hts and lia%ilities o! the

shipo$ner vis'/'visthat o! the insurer, $hile the present case involves the

ri&hts and lia%ilities o! the shippervis'/'visthat o! the shipo$ner# Speci!icall.,

+ivil +ase No# -219B1 $as an action !or Speci!ic Per!or"ance and 0a"a&es

%ased on G5 Karine /ull Insurance Polic. No# @K2K/21B19 coverin&

the vessel 0A> 8ucio, $hile the instant case is an action !or >reach o! +ontract

o! +arria&e and 0a"a&es !iled %. SK+ a&ainst N+ %ased on >ill o!8adin& No# 1 and No# *, $ith de!endant N+ seein& rei"%urse"ent !ro"

G5 under Insurance Polic. No# K2HH6, should the !or"er %e held lia%le

to pa. SK+#

Koreover, the su%;ect "atter o! the third2part. co"plaint a&ainst G5 in this

case is di!!erent !ro" that in +ivil +ase No# -219B1# In the latter, N+ $as

suin& G5 !or the insurance contract over the vessel $hile in the !or"er, the

third2part. co"plaint arose !ro" the insurance contract coverin& the car&oes

on %oard the 0A> 8ucio#

The doctrine o! res udicataprecludes the re2liti&ation o! a particular !act or

issue alread. passed upon %. a court o! co"petent ;urisdiction in a !or"er

;ud&"ent, in another action %et$een the sa"e parties %ased on a di!!erent

clai" or cause o! action# The ;ud&"ent in the prior action operates as estoppel

onl. as to those "atters in issue or points controverted, upon the deter"ination

o! $hich the !indin& or ;ud&"ent $as rendered#FI! a particular point or

3uestion is in issue in the second action, and the ;ud&"ent $ill depend on the

deter"ination o! that particular point or 3uestion, a !or"er ;ud&"ent %et$een

the sa"e parties or their privies $ill %e !inal and conclusive in the second i!

that sa"e point or 3uestion $as in issue and ad;udicated in the !irst suit# H

Since the case at %ar arose !ro" the sa"e incident as that involved in +ivil

+ase No# -219B1, onl. !indin&s $ith respect to "atters passed upon %. the

court in the !or"er ;ud&"ent are conclusive in the disposition o! the instant

case# care!ul perusal o! the decision in +ivil +ase No# -219B1 $ill reveal

that the pivotal issues resolved %. the lo$er court, as a!!ir"ed %. %oth the

+ourt o! ppeals and the Supre"e +ourt, can %e su""ariCed into three le&al

conclusions' 1) that the 0A> 8ucio %e!ore and durin& the vo.a&e $as

sea$orth.< *) that there $as proper notice o! loss "ade %. N+ $ithin the

re&le"entar. period< and B) that the vessel 0A> 8ucio $as a constructive total

loss#

Said decision, ho$ever, did not pass upon the issues raised in the instant case#

%sent therein $as an. discussion re&ardin& the lia%ilit. o! N+ !or the

loss o! the car&oes# Neither did the lo$er court pass upon the issue o! the

alle&ed ne&li&ence o! the cre$"e"%ers o! the 0A> 8ucio %ein& the cause o!

the loss o! the car&oes o$ned %. SK+#

There!ore, %ased on the !ore&oin& discussion, $e are reversin& the !indin&s o!

the +ourt o! ppeals that there isres udicata#

nent N+s !irst assi&n"ent o! error, i.e#, the appellate court co""itted

error in concludin& that the ne&li&ence o! N+s representatives $as the

pro?i"ate cause o! the loss, said issue is a 3uestion o! !act assailin& the lo$er

courts appreciation o! evidence on the ne&li&ence or lac thereo! o! the

cre$"e"%ers o! the 0A> 8ucio# s a rule, !indin&s o! !act o! lo$er courts,

particularl. $hen a!!ir"ed %. the appellate court, are dee"ed !inal and

conclusive# The Supre"e +ourt cannot revie$ such !indin&s on appeal,especiall. $hen the. are %orne out %. the records or are %ased on su%stantial

evidence#9s held in the case o!Donato v. Court of ppeals,1in this

;urisdiction, it is a !unda"ental and settled rule that !indin&s o! !act %. the

trial court are entitled to &reat $ei&ht on appeal and should not %e distur%ed

unless !or stron& and co&ent reasons %ecause the trial court is in a %etter

position to e?a"ine real evidence, as $ell as to o%serve the de"eanor o! the

$itnesses $hile testi!.in& in the case#11

It is not the !unction o! this +ourt to anal.Ce or $ei&h evidence all over a&ain,

unless there is a sho$in& that the !indin&s o! the lo$er court are totall.
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devoid o! support or are &larin&l. erroneous as to constitute palpa%le error or

&rave a%use o! discretion#1*

care!ul stud. o! the records sho$s no co&ent reason to !ault the !indin&s o!

the lo$er court, as sustained %. the appellate court, that N+s

representatives !ailed to e?ercise the e?traordinar. de&ree o! dili&ence re3uired

%. the la$ to e?culpate the" !ro" lia%ilit. !or the loss o! the car&oes#

First, N+ ad"itted that the. !ailed to deliver to the desi&nated consi&nee

the T$ent. Nine Thousand T$o /undred Ten (*9,*1) cases o! Pale Pilsen

and ive /undred i!t. () cases o! +erveCa Ne&ra#

Second, it is %orne out in the testi"on. o! the $itnesses on record that the

%ar&e 0A> 8ucio had no en&ine o! its o$n and could not "aneuver %. itsel!#

et, the patron o! N+s tu&%oat KAT N+ le!t it to !end !or itsel!

not$ithstandin& the !act that as the t$o vessels arrived at the port o! San Jose,

nti3ue, si&ns o! the i"pendin& stor" $ere alread. "ani!est# s stated %. the

lo$er court, $itness Kr# nastacio Kanila& testi!ied that the captain or patron

o! the tu&%oat KAT N+ le!t the %ar&e 0A> 8ucio i""ediatel. a!ter it

reached San Jose, nti3ue, despite the !act that there $ere alread. %i& $aves

and the area $as alread. dar# This is corro%orated %. de!endants o$n

$itness, Kr# ernando Kaca%ueB

The trial court continued'

t that precise "o"ent, since it is the dut. o! the de!endant to e?ercise and

o%serve e?traordinar. dili&ence in the vi&ilance over the car&o o! the plainti!!,the patron or captain o! KAT N+, representin& the de!endant could have

placed 0A> 8ucio in a ver. sa!e location %e!ore the. le!t no$in& or sensin& at

that ti"e the co"in& o! a t.phoon# The presence o! %i& $aves and dar clouds

could have $arned the patron or captain o! KAT N+ to insure the sa!et. o!

0A> 8ucio includin& its car&o# 0A> 8ucio %ein& a %ar&e, $ithout its en&ine, as

the patron or captain o! KAT N+ ne$, could not possi%l. "aneuver %.

itsel!# /ad the patron or captain o! KAT N+, the representative o! the

de!endants o%served e?traordinar. dili&ence in placin& the 0A> 8ucio in a sa!e

place, the loss to the car&o o! the plainti!! could not have occurred# In short,

there!ore, de!endants throu&h their representatives, !ailed to o%serve the de&ree

o! dili&ence re3uired o! the" under the provision o! rt# 1FBB o! the +ivil

+ode o! the Philippines#1

Petitioners state o! n& Gui and +o To, in their 0emorandum, asserted that

the contention o! respondents SK+ and G5 that the cre$ "e"%ers o! 0A>

8ucio should have le!t port at the onset o! the t.phoon is lie advisin& the !ish

to ;u"p !ro" the !r.in& pan into the !ire and an advice that %orders on

"adness#1

The ar&u"ent does not persuade# The records sho$ that the 0A> 8ucio $as

the onl. vessel le!t at San Jose, nti3ue, durin& the ti"e in 3uestion# The

other vessels $ere trans!erred and te"poraril. "oved to Kalandon&,

ilo"eters !ro" $har! $here the %ar&e re"ained#16+learl., the trans!erred

vessels $ere de!initel. sa!er in Kalandon& than at the port o! San Jose,

nti3ue, at that particular ti"e, a !act $hich petitioners !ailed to dispute

N+s ar&u"ents %oil do$n to the clai" that the loss o! the car&oes $as

caused %. the t.phoon Sisang, a !ortuitous event (caso fortuito), and there

$as no !ault or ne&li&ence on their part# In !act, N+ clai"s that their

cre$"e"%ers e?ercised due dili&ence to prevent or "ini"iCe the loss o! the

car&oes %ut their e!!orts proved no "atch to the !orces unleashed %. the

t.phoon $hich, in petitioners o$n $ords $as, %. an. .ardstic, a natural

cala"it., a !ortuitous event, an act o! God, the conse3uences o! $hich

petitioners could not %e held lia%le !or#1F

The +ivil +ode provides'

Art! #&))# +o""on carriers, !ro" the nature o! their %usiness and !or reasons

o! pu%lic polic. are %ound to o%serve e?traordinar. dili&ence in the vi&ilance

over the &oods and !or the sa!et. o! the passen&ers transported %. the",

accordin& to all the circu"stances o! each case#

Such e?traordinar. dili&ence in vi&ilance over the &oods is !urther e?pressed

in rticles 1FB, 1FB, and 1F Nos# , 6, and F # # #

Art! #&)$# +o""on carriers are responsi%le !or the loss, destruction, or

deterioration o! the &oods, unless the sa"e is due to an. o! the !ollo$in&
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causes onl.'

(1) lood, stor", earth3uae, li&htnin&, or other natural disaster or cala"it. 8ucio %e

lie$ise trans!erred, %ut to no avail# The 0A> 8ucio had no en&ine and could

not "aneuver %. itsel!# ven i! N+s representatives $anted to trans!er it,

the. no lon&er had an. "eans to do so as the tu&%oat KAT N+ had alread.

departed, leavin& the %ar&e to its o$n devices# The captain o! the tu&%oatshould have had the !oresi&ht not to leave the %ar&e alone considerin& the

pendin& stor"#

7hile the loss o! the car&oes $as ad"ittedl. caused %. the t.phoon Sisang, a

natural disaster, N+ could not escape lia%ilit. to respondent SK+# The

records clearl. sho$ the !ailure o! petitioners representatives to e?ercise the

e?traordinar. de&ree o! dili&ence "andated %. la$# To %e e?e"pted !ro"

responsi%ilit., the natural disaster should have %een the pro?i"ate and onl.

cause o! the loss#*There "ust have %een no contri%utor. ne&li&ence on the

part o! the co""on carrier# s held in the case o!1impangco Sons v. 2angco

Steamship Co#'*1

# # # To %e e?e"pt !ro" lia%ilit. %ecause o! an act o! God, the tu& "ust %e !ree

!ro" an. previous ne&li&ence or "isconduct %. $hich that loss or da"a&e

"a. have %een occasioned# or, althou&h the i""ediate or pro?i"ate cause

o! the loss in an. &iven instance "a. have %een $hat is ter"ed an act o! God,

.et, i! the tu& unnecessaril. e?posed the t$o to such accident %. an. culpa%le

act or o"ission o! its o$n, it is not e?cused#**

There!ore, as correctl. pointed out %. the appellate court, there $as %latant

ne&li&ence on the part o! KAT N+s cre$"e"%ers, !irst in leavin& the

en&ine2less %ar&e 0A> 8ucio at the "erc. o! the stor" $ithout the assistance

o! the tu&%oat, and a&ain in !ailin& to heed the re3uest o! SK+s

representatives to have the %ar&e trans!erred to a sa!er place, as $as done %.

the other vessels in the port< thus, "ain& said %latant ne&li&ence the

pro?i"ate cause o! the loss o! the car&oes#

7e no$ co"e to the issue o! $hether or not G5 can %e held lia%le under the

insurance polic. to rei"%urse N+ !or the loss o! the car&oes despite the

!indin&s o! the respondent court that such loss $as occasioned %. the %latant

ne&li&ence o! the latters e"plo.ees#

ne o! the purposes !or tain& out insurance is to protect the insured a&ainst

the conse3uences o! his o$n ne&li&ence and that o! his a&ents# Thus, it is a

%asic rule in insurance that the carelessness and ne&li&ence o! the insured or

his a&ents constitute no de!ense on the part o! the insurer#*BThis rule ho$ever

presupposes that the loss has occurred due to causes $hich could not have%een prevented %. the insured, despite the e?ercise o! due dili&ence#

The 3uestion no$ is $hether there is a certain de&ree o! ne&li&ence on the

part o! the insured or his a&ents that $ill deprive hi" the ri&ht to recover

under the insurance contract# 7e sa. there is# /o$ever, to $hat e?tent such

ne&li&ence "ust &o in order to e?onerate the insurer !ro" lia%ilit. "ust %e

evaluated in li&ht o! the circu"stances surroundin& each case# 7hen evidence

sho$ that the insureds ne&li&ence or reclessness is so &ross as to %e

su!!icient to constitute a $ill!ul act, the insurer "ust %e e?onerated#
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In the case o! Standard 0arine %ns. Co. v. 3ome 4each 1. 5 T. Co#,*the

5nited States Supre"e +ourt held that'

The ordinar. ne&li&ence o! the insured and his a&ents has lon& %een held as a

part o! the ris $hich the insurer taes upon hi"sel!, and the e?istence o!

$hich, $here it is the pro?i"ate cause o! the loss, does not a%solve the insurer

!ro" lia%ilit.#4ut "illful e(posure! gross negligence! negligence amounting to

misconduct! etc.! have often been held to release the insurer from suchliability#*"phasis oursO

In the case o! 7illia"s v# Ne$ n&land Insurance +o#, B +li!!# *, ed# +as#

No# 1F,FB1, the o$ners o! an insured vessel atte"pted to put her across the %ar

at /atteras Inlet# She struc on the %ar and $as $reced# The "aster ne$ that

the depth o! $ater on the %ar $as such as to "ae the atte"pted passa&e

dan&erous# Jud&e +li!!ord held that, under the circu"stances, the loss $as not

$ithin the protection o! the polic., sa.in&'

uthorities to prove that persons insured cannot recover !or a loss occasioned

%. their o$n $ron&!ul acts are hardl. necessar., as the proposition involves an

ele"entar. principle o! universal application# 8osses "a. %e recovered %. the

insured, thou&h re"otel. occasioned %. the ne&li&ence or "isconduct o! the

"aster or cre$, i! pro?i"atel. caused %. the perils insured a&ainst, %ecause

such "istaes and ne&li&ence are incident to navi&ation and constitute a part

o! the perils $hich those $ho en&a&e in such adventures are o%li&ed to incurerde Plants correspondin& to

the a"ount o! the insurance !or the car&o# In turn, >erde Plants e?ecuted in its

!avor a DSu%ro&ation -eceipt#E

ederal Phoeni? de"andin& pa."ent on the %asis o! the su%ro&ation receipt#

+#!# Sharp denied an. lia%ilit. that such lia%ilit. $as e?tin&uished $hen the

vessel carr.in& the car&o $as &utted %. !ire# Thus, ederal Phoeni? !iled aco"plaint !or da"a&es a&ainst 0S-2Senator 8ines and +#, Sharp#

Issue5 7hether or not there $as a %reach o! contract o! carria&e#

Held5ire is not one o! those enu"erated under rticle 1FB o! the +ivil

+ode to $it,

rt# 1FB, +o""on carriers are responsi%le !or the loss, destruction, or

deterioration o! the &oods, unless the sa"e is due to an. o! the !ollo$in&

causes onl.' lood, stor", earth3uae, li&htnin&, or other natural disaster or

cala"it.< ct o! the pu%lic ene". in $ar, $hether international civil< ct or

o"ission o! the shipper or the o$ner o! the &oods< The character o! the &oods

or de!ects in the pacin& or in the containers< rder or act o! co"petent

pu%lic authorit.#

+o""on carriers are o%li&ed to o%serve e?traordinar. dili&ence in the

vi&ilance over the &oods transported %. the"# ccordin&l., the. are

presu"ed to have %een at !ault or to have acted ne&li&entl. o! the &oods arelost, destro.ed or deteriorated# In those cases $here the presu"ption is

applied, the co""on carrier "ust prove that it e?ercised e?traordinar.

dili&ence in order to overco"e the presu"ption#

8oadstar Shippin& vs# +ourt o! ppeals

(G- 1B16*1, *H Septe"%er 1999)

+TS '

8oadstar Shippin& +o# Inc# received on %oard its KA@ D+heroeeE &oods,

a"ountin& to P6,6F,1FH, $hich $ere insured !or the sa"e a"ount $ith the

respondent Kanila Insurance +o# (KI+) a&ainst various riss includin& Dtotal

loss %. total loss o! the vessel#E The vessel, in turn, $as insured %. Prudential

Guarantee U ssurance, Inc# (PGI) !or P "illion# n its $a. to Kanila

!ro" the port o! Nasipit, &usan del Norte, the vessel, alon& $ith its car&o,

san o!! 8i"asa$a Island# s a result o! the total loss o! its ship"ent, the

consi&nee "ade a clai" $ith 8oadstar $hich, ho$ever, i&nored the sa"e# sthe insurer, KI+ paid P6,F, to the insured in !ull settle"ent o! its clai",

and the latter e?ecuted a su%ro&ation receipt there!or#

KI+ !iled a co"plaint a&ainst 8oadstar and PGI, alle&in& that the sinin& o!

the vessel $as due to the !ault and ne&li&ence o! 8oadstar and its e"plo.ees#

PGI $as later dropped as a part. de!endant a!ter it paid the insurance

proceeds to 8oadstar# 8oadstar su%"its that the vessel $as a private carrier

%ecause it $as not issued a certi!icate o! pu%lic convenience, it did not have a

re&ular trip or schedule nor a !i?ed route, and there $as onl. one shipper,


13/24

one consi&nee !or a special car&o# The trial court rendered ;ud&"ent in !avor

o! KI+# 8oadstar elevated the "atter to the +ourt o! ppeals, $hich a!!ir"ed

the -T+s decision in toto#

ISS5'

7hether or not 8oadstar is a co""on carrier#

/80'

es#

? ? ? 7Oe hold that 80ST- is a co""on carrier# It is not necessar. that

the carrier %e issued a certi!icate o! pu%lic convenience, and this pu%lic

character is not altered %. the !act that the carria&e o! the &oods in 3uestion

$as periodic, occasional, episodic or unscheduled#

In support o! its position, 80ST- relied on the 196H case o! /o"e

Insurance +o# v# "erican Stea"ship &encies, Inc#, $here this +ourt held

that a co""on carrier transportin& special car&o or charterin& the vessel to a

special person %eco"es a private carrier that is not su%;ect to the provisions o!

the +ivil +ode# n. stipulation in the charter part. a%solvin& the o$ner !ro"

lia%ilit. !or loss due to the ne&li&ence o! its a&ent is void onl. i! the strict

polic. &overnin& co""on carriers is upheld# Such polic. has no !orce $here

the pu%lic at lar&e is not involved, as in the case o! a ship totall. chartered !or

the use o! a sin&le part.# 80ST- also cited @alenCuela /ard$ood and

Industrial Suppl., Inc# v# +ourt o! ppeals and National Steel +orp# v# +ourto! ppeals, %oth o! $hich upheld the /o"e Insurance doctrine#

These cases invoed %. 80ST- are not applica%le in the case at %ar !or

si"ple reason that the !actual settin&s are di!!erent# The records do not disclose

that the KA@ +heroee, on the date in 3uestion, undertoo to carr. a special

car&o or $as chartered to a special person onl.# There $as no charter part.#

The %ills o! ladin& !ailed to sho$ an. special arran&e"ent, %ut onl. a &eneral

provision to the e!!ect that the KA@ +heroee $as a &eneral car&o

carrier#1 &eneral ship carr.in& &oods !or hire, $hether e"plo.ed in

internal, in coastin&, or in !orei&n co""erce is a co""on carrier# (>aer,

Senior U +o#s Successors v# 8a +o"pania Kariti"a, 6 Phil# *1, *1F2*1H,

3uotin& 8iverpool Stea"ship +o# v# Phoeni? Ins# +o#, 1*9 5#S# B9F, BF),

cited in B T0-I+ +# K-TIN, P/I8IPPIN +KK-+I8 87S

11H (-ev# d# 19H9)#O urther, the %are !act that the vessel $as carr.in& a

particular t.pe o! car&o !or one shipper, $hich appears to %e purel.

coincidental, is not reason enou&h to convert the vessel !ro" a co""on to a

private carrier, especiall. $here, as in this case, it $as sho$n that the vessel

$as also carr.in& passen&ers#

PAL 3s! SA6ILLO

FACTS

Savillo $as a ;ud&e o! the -T+ o! Iloilo

/e $as invited to participate in the 199B SN Seniors nnual Gol!

Tourna"ent in Jaarta Indonesia#

So, in order to tae part in such event, he purchased a ticet !ro" P8

$ith the !ollo$in& itinerar.' Kanila2Sin&apore2Jaarta2Sin&apore2Kanila#

P8 $ould tae the" !ro" Kanila to Si&napore, $hile Sin&aporeirlines $ould tae the" !ro" Sin&apore to Jaarta#

7hen the. arrived in Sin&apore, Sin&apore irlines re;ected the ticets

o! Savillo %ecause the. $ere not endorsed %. P8# It $as e?plained that i!Sin&apore irlines honoured the ticets $ithout P8S endorse"ent, P8$ould not pa. Sin&apore irlines !or their passa&e#

Savillo de"anded co"pensation !ro" %oth P8 and Sin&apore irlines,

%ut his e!!orts $ere !utile# /e then sued P8 a!ter B .ears, de"andin& "oralda"a&es#

P8 , in its KT0, clai"ed that the cause o! action has alread. prescri%ed

invoin& the 7arsa$ +onvention (providin& !or a * .ear prescriptive period)#>oth -T+ and + ruled a&ainst P8#

ISSUE7hat is the applica%le la$, the +ivil +ode or the 7arsa$ +onventionL /asthe action prescri%edL

RULING

The +ivil +ode is applica%le# There!ore the action has not .et prescri%ed !orthe prescription period is .ears#

I7 'ause "7 a't2"n 'la2s "ral daa8es, n"t '"3ered by 0arsa9C"n3ent2"n! rticle 19 o! the 7arsa$ +onvention provides !or lia%ilit. on


14/24

the part o! a carrier !or Dda"a&es occasioned %. dela. in the transportation %.air o! passen&ers, %a&&a&e or &oods# rticle * e?cludes other re"edies %.!urther providin& that D(1) in the cases covered %. articles 1H and 19, an.action !or da"a&es, ho$ever !ounded, can onl. %e %rou&ht su%;ect to theconditions and li"its set out in this convention#E There!ore, a clai" covered %.the 7arsa$ +onvention can no lon&er %e recovered under local la$, i! thestatue o! li"itations o! t$o .ears has elapsed#

Nevertheless, this +ourt notes that ;urisprudence in the Philippines and the5nited States also reco&niCes that the 7arsa$ +onvention does notDe?clusivel. re&ulateE the relationship %et$een passen&er and carrier on aninternational !li&ht#

In 5#S# v# 5., this +ourt distin&uished %et$een the (1) da"a&e to thepassen&ers %a&&a&e and (*) hu"iliation he su!!ered at the hands o! theairlines e"plo.ees# The irst cause o! action $as covered %. the 7arsa$+onvention $hich prescri%es in t$o .ears, $hile the second $as covered %.the provisions o! the +ivil +ode on torts, $hich prescri%es in !our .ears#

In Kahane. v# ir rance (5S case), the court therein ruled that i! the plainti!!$ere to clai" da"a&es %ased solel. on the dela. she e?perienced2 !or instance,the costs o! rentin& a van, $hich she had to arran&e on her o$n as aconse3uence o! the dela. the co"plaint $ould %e %arred %. the t$o:.earstatute o! li"itations# /o$ever, $here the plainti!! alle&ed that the airlinessu%;ected her to un;ust discri"ination or undue or unreasona%le pre!erence ordisadvanta&e, an act punisha%le under the 5S la$, then the plainti!! "a. clai"

purel. no"inal co"pensator. da"a&es !or hu"iliation and hurt !eelin&s,$hich are not provided !or %. the 7arsa$ +onvention#

In the Petition at %ar, Savillos +o"plaint alle&ed that %oth P8 and

Sin&apore irlines $ere &uilt. o! &ross ne&li&ence, $hich resulted in his %ein&su%;ected to Dhu"iliation, e"%arrass"ent, "ental an&uish, serious an?iet.,!ear and distressE there!ore this case is not covered %. the 7arsa$+onvention#

0(en t(e ne8l28en'e (appened be7"re t(e per7"ran'e "7 t(e '"ntra't "7

'arr2a8e, n"t '"3ered by t(e 0arsa9 C"n3ent2"n! lso, this case isco"para%le to 8athi&ra v# >ritish ir$a.s# In that case, it $as held that theairlines ne&li&ent act o! recon!ir"in& the passen&ers reservation da.s %e!oredeparture and !ailin& to in!or" the latter that the !li&ht had alread. %eendiscontinued is not a"on& the acts covered %. the 7arsa$ +onvention, since

the alle&ed ne&li&ence did not occur durin& the per!or"ance o! the contract o!

carria&e %ut, rather, da.s %e!ore the scheduled !li&ht#

In the case at hand, Sin&apore irlines %arred Savillo !ro" %oardin& theSin&apore irlines !li&ht %ecause P8 alle&edl. !ailed to endorse the ticetso! private respondent and his co"panions, despite P8s assurances toSavillo that Sin&apore irlines had alread. con!ir"ed their passa&e# 7hilethis !act still needs to heard and esta%lished %. ade3uate proo! %e!ore the-T+, an action %ased on these alle&ations $ill not !all under the 7arsa$

+onvention, since the purported ne&li&ence on the part. o! P8 did not occurdurin& the per!or"ance o! the contract o! carria&e %ut da.s %e!ore thescheduled !li&ht# Thus, the present action cannot %e dis"issed %ased on theStatue o! 8i"itations provided under rticle *9 o! the 7arsa$ +onvention#

8i" vs +

K T/ -GIST-0 7N- T/ @/I+8 > 8870 TP-@ T/T T/- IS 8-0 T-NS- 7N-S/IP T

NT/- P-SN 5N0- T/ >IT SSTKLNo# ne o! the pri"ar. !actors considered in the &rantin& o! a certi!icate o!pu%lic convenience !or the %usiness o! pu%lic transportation is the !inancialcapacit. o! the holder o! the license, so that lia%ilities arisin& !ro" accidents"a. %e dul. co"pensated# The a%it s.ste" renders illusor. such purposeand, $orse, "a. still %e availed o! %. the &rantee to escape civil lia%ilit.caused %. a ne&li&ent use o! a vehicle o$ned %. another and operated underhis license# I! a re&istered o$ner is allo$ed to escape lia%ilit. %. provin& $hothe supposed o$ner o! the vehicle is, it $ould %e eas. !or hi" to trans!er thesu%;ect vehicle to another $ho possesses no propert. $ith $hich to respond!inanciall. !or the da"a&e done# (L2 3! CA, G!R! N"! #*+:#&, Jan! #;,

*%%*)

S$eet 8ines vs Teves

+TS'

tt.# 8eovi&ildo Tando& and -o&elio Tiro %ou&ht ticets !or Ta&%ilaran +it.

via the port o! +e%u Since "an. passen&ers $ere %ound !or Suri&ao, KAS

S$eet /ope $ould not %e proceedin& to >ohol The. $ent to the proper

%ranc& o!!ice and $as relocated to KAS S$eet To$n $here the. $ere


15/24

!orced to a&ree to hide at the car&o section to avoid inspection o! the o!!icers

o! the Philippine +oast&uard# and the. $ere e?posed to the scorchin& heat o!

the sun and the dust co"in& !ro" the shipMs car&o o! corn &rits and theirticets

$ere not honored so the. had to purchase a ne$ one The. sued S$eet 8ines

!or da"a&es and !or %reach o! contract o! carria&e %e!ore the +ourt o! irst

Instance o! Kisa"is riental $ho dis"issed the co"palitn !or i"proper venue

"otion $as pre"ised on the condition printed at the %ac o! theticets

2dis"issed instant petition !or prohi%ition !or preli"inar. in;unction

ISS5' 7AN a co""on carrier en&a&ed in inter2island shippin& stipulate thru

condition printed at the %ac o! passa&e ticets to its vessels that an. and all

actions arisin& out o! the contract o! carria&e should %e !iled onl. in a

particular province or cit.

/80' N#petition !or prohi%ition is 0ISKISS0# -estrainin& order 8IT0and ST SI0 contract o! adhesion not that ind o! a contract $here the

parties sit do$n to deli%erate, discuss and a&ree speci!icall. on all its ter"s,

%ut rather, one $hich respondents too no part at all in preparin& ;ust i"posed

upon the" $hen the. paid !or the !are !or the !rei&ht the. $anted to ship 7e

!ind and hold that +ondition No# 1 printed at the %ac o! the passa&e ticets

should %e held as void and unen!orcea%le !or the !ollo$in& reasons

circu"stances o%li&ation in the inter2island ship

1 $ill pre;udice ri&hts and interests o! innu"era%le passen&ers in di!!erent s

o! the countr. $ho, under +ondition No# 1, $ill have to !ile suits a&ainst

petitioner onl. in the +it. o! +e%u su%versive o! pu%lic polic. on trans!ers o!

venue o! actions philosoph. underl.in& the provisions on trans!er o! venue o!

actions is the convenience o! the plainti!!s as $ell as his $itnesses and to

pro"ote *1 the ends o! ;ustice

Ma8b"" 3! ernard"

& SCRA /+*

Fa'ts5 5r%ano and "ilia Ka&%oo are the parents o! +esar Ka&%oo, a childo! H .ears old, $ho lived $ith the" and $as under their custod. until hisdeath on * cto%er 196 $hen he $as illed in a "otor vehicle accident, the!atal vehicle %ein& a passen&er ;eepne. o$ned %. 0el!in >ernardo# t theti"e o! the accident, said passen&er ;eepne. $as driven %. +onrado -o3ue#The contract %et$een -o3ue and >ernardo $as that -o3ue $as to pa. to>ernardo the su" o! PH#, $hich he paid to >ernardo, !or privile&e o!drivin& the ;eepne., it %ein& their a&ree"ent that $hatever earnin&s -o3ue

could "ae out o! the use o! the ;eepne. in transportin& passen&ers !ro" onepoint to another in the +it. o! Kanila $ould %elon& entirel. to -o3ue#

s a conse3uence o! the accident and as a result o! the death o! +esarKa&%oo in said accident, -o3ue $as prosecuted !or ho"icide thru reclessi"prudence %e!ore the +I Kanila# -o3ue $as sentenced to 6 "onths o!arresto "a.or, $ith the accessor. penalties o! the la$< to inde"ni!. the heirso! the deceased in, $ith su%sidiar. i"prison"ent in case o! insolvenc., and to

pa. the costs#

Pursuant to said ;ud&"ent -o3ue served his sentence %ut he $as not a%le to

pa. the inde"nit. %ecause he $as insolvent# n action $as !iled %. thespouses Ka&%oo a&ainst >ernardo is !or en!orce"ent o! his su%sidiar.lia%ilit.# The trial court ordered >ernardo to pa. the# >ernardo appealed to the+ourt o! ppeals, $hich certi!ied the case to the Supre"e +ourt on the&round that onl. 3uestions o! la$ are involved#

Issue5 7hether or not an e"plo.er2e"plo.ee relationship %et$een the;eepne. operator and the driverL

Held5n e"plo.er2e"plo.ee relationship e?ists %et$een a ;eepne. o$nerand a driver under a %oundar. s.ste" arran&e"ent# The !eatures $hichcharacteriCe the %oundar. s.ste" 2 na"el. the !act that the driver does notreceive a !i?ed $a&e %ut &ets onl. the e?cess o! the a"ount o! !ares collected

%. hi" over the a"ount he pa.s to the ;eep2o$ner, and the &asolineconsu"ed %. the ;eep is !or the a"ount o! the driver 2 are not su!!icient to$ithdra$ the relationship %et$een the" !ro" that o! e"plo.ee and e"plo.er#+onse3uentl., the ;eepne. o$ner is su%sidiar. lia%le as e"plo.er inaccordance $ith rt#1B, -evised Penal +ode#

ACE NA6IGATION CO!, INC!,petitioner,

vs#

FGU INSURANCE CORPORATION and PIONEER INSURANCE


16/24

AN1 SURET< CORPORATION, -espondents#

0 + I S I N

PERLAS-ERNAE,J.:

This is an appeal under -ule o! the -ules o! +ourt seein& to reverse the

June **, * 0ecision1

and e%ruar. 1F, *6 -esolution*

o! the +ourt o!ppeals (+) orderin& petitioner ce Navi&ation +o#, Inc#, ;ointl. and

severall. $ith +ardia 8i"ited, to pa. respondents G5 Insurance +orp# and

Pioneer Insurance and Suret. +orp# the su" o! P*1B,1H#* plus interest at the

rate o! si? percentu" (6R) !ro" the !ilin& o! the co"plaint until paid#

The acts

n Jul. 19, 199, +ardia 8i"ited (+-0I) shipped on %oard the vessel KA@

Paarti Ti&a at Shan&hai Port +hina, H,*6 "etric tons or 16,* %a&s o!

Gre. Portland +e"ent to %e dischar&ed at the Port o! Kanila and delivered to

its consi&nee, /eindrich Tradin& +orp# (/IN0-I+/)# The su%;ect ship"ent

$as insured $ith respondents, G5 Insurance +orp# (G5) and Pioneer

Insurance and Suret. +orp# (PIN-), a&ainst all riss under Karine pen

Polic. No# 6*H9*F !or the a"ount o! P1H,H,*1## B

The su%;ect vessel is o$ned %. P#T# Paarti Tata (P-TI) $hich it

chartered to Shin$a aiun aisha 8td# (S/IN7)# -epresentin& itsel! as

o$ner o! the vessel, S/IN7 entered into a charter part. contract $ith S.

International, Inc# (S), an a&ent o! ee eh Kariti"e +o# ( /),

$hich !urther chartered it to -e&enc. ?press 8ines S## (-GN+)# Thus,

it $as -GN+ that directl. dealt $ith consi&nee /IN0-I+/, and

accordin&l., issued +lean >ill o! 8adin& No# SK21# 6

n Jul. *B, 199, the vessel arrived at the Port o! Kanila and the ship"ent

$as dischar&ed# /o$ever, upon inspection o! /IN0-I+/ and petitioner ce

Navi&ation +o#, Inc# (+N@), a&ent o! +-0I, it $as !ound that out o!

the 16,* %a&s o! ce"ent, B,9 %a&s $ere in %ad order and condition#

5na%le to collect the sustained da"a&es in the a"ount o! P1,*B,#6 !ro"

the shipper, +-0I, and the charterer, -GN+, the respondents, as co2

insurers o! the car&o, each paid the consi&nee, /IN0-I+/, the a"ounts o!

P*F,B6# and P*H,69#9, respectivel., Fand conse3uentl. %eca"e

su%ro&ated to all the ri&hts and causes o! action accruin& to /IN0-I+/#

Thus, on u&ust H, 1991, respondents !iled a co"plaint !or da"a&es a&ainst

the !ollo$in& de!endants' -GN+ QP-SS 8INS, S##A 5NN7N

+/-T-- T/ @SS8 MP-TI TIGMA 5NN7N 7N-

andAor 0KI (sic) +/-T-- T/ @SS8 MP-TI TIGM,S INT-NTIN8, IN+# andAor + N@IGTIN +KPN,

IN+# H$hich $as doceted as +ivil +ase No# 92*16#

In their ans$er $ith counterclai" and cross2clai", P-TI and S/IN7

alle&ed that the suits a&ainst the" cannot prosper %ecause the. $ere not

na"ed as parties in the %ill o! ladin 9

Si"ilarl., +N@ clai"ed that, not %ein& priv. to the %ill o! ladin&, it $as

not a real part.2in2interest !ro" $ho" the respondents can de"and

co"pensation# It !urther denied %ein& the local ship a&ent o! the vessel or

-GN+ and clai"ed to %e the a&ent o! the shipper, +-0I# 1

or its part, S denied havin& acted as a&ent o! the charterer, /,

$hich chartered the vessel !ro" S/IN7, $hich ori&inall. chartered the

vessel !ro" P-TI# S also averred that it cannot %e sued as an a&ent

$ithout i"pleadin& its alle&ed principal, /# 11

n Septe"%er B, 1991, /IN0-I+/ !iled a si"ilar co"plaint a&ainst the

sa"e parties and +o""ercial 5nion ssurance +o# (+KK-+I8),doceted as +ivil +ase No# 912*1, $hich $as later consolidated $ith +ivil

+ase No# 912*16# /o$ever, the suit a&ainst +KK-+I8 $as

su%se3uentl. dis"issed on ;oint "otion %. the respondents and

+KK-+I8# 1*

Proceedin&s >e!ore the -T+ and the +

In its Nove"%er *6, *1 0ecision, 1Bthe -T+ dis"issed the co"plaint, the

falloo! $hich reads'
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17/24

7/--, pre"ises considered, plainti!!s co"plaint is 0ISKISS0#

0e!endants counter2clai" a&ainst the plainti!!s are lie$ise dis"issed, it

appearin& that plainti!!sO did not act in evident %ad !aith in !ilin& the present

co"plaint a&ainst the"#

0e!endant Paarti and Shin$as cross2clai"s a&ainst their co2de!endants are

lie$ise dis"issed !or lac o! su!!icient evidence#

No costs#

S -0-0#

0issatis!ied, the respondents appealed to the + $hich, in its assailed June **,

* 0ecision,1!ound P-TI, S/IN7, / and its a&ent, S,

solidaril. lia%le !or FR o! the respondentsM clai", $ith the re"ainin& BR to

%e shouldered solidaril. %. +-0I and its a&ent, +N@, thus'

7/--, pre"ises considered, the 0ecision dated Nove"%er *6, *1

is here%. K0II0 in the sense that'

a) de!endant2appellees P#T# Paarti Tata, Shin$a aiun aisha, 8td#, ee eh

Kariti"e +o#, 8td# and the latters a&ent S. International, Inc# are here%.

declared ;ointl. and severall. lia%le, and are 0I-+T0 to pa. G5

Insurance +orporation the a"ount o! T$o /undred Ninet. i&ht Thousand

Nine /undred T$ent. ive and A1 (P*9H,9*#) Pesos and Pioneer

Insurance and Suret. +orp# the su" o! ne /undred Ninet. Nine Thousand

T$o /undred i&ht. Three and 66A1 (P199,*HB#66) Pesos representin&Sevent. (FR) percentu" o! their respective clai"s as actual da"a&es plus

interest at the rate o! si? (6R) percentu" !ro" the date o! the !ilin& o! the

co"plaint< and

%) de!endant +ardia 8td# and de!endant2appellee ce Navi&ation +o#, Inc# are

0+8-0 ;ointl. and severall. lia%le and are here%. 0I-+T0 to pa.

G5 Insurance +orporation ne /undred T$ent. i&ht Thousand ne

/undred Ten and 9*A1 (P1*H,11#9*) Pesos and Pioneer Insurance and

Suret. +orp# i&ht. ive Thousand our /undred Seven and *HA1

(PH,F#*H) Pesos representin& thirt. (BR) percentu" o! their respective

clai"s as actual da"a&es, plus interest at the rate o! si? (6R) percentu" !ro"

the date o! the !ilin& o! the co"plaint#

S -0-0#

indin& that the parties entered into a ti"e charter part., not a de"ise or

%are%oat charter $here the o$ner co"pletel. and e?clusivel. relin3uishes

possession, co""and and navi&ation to the charterer, the + held P-TI,S/IN7, / and its a&ent, S, solidaril. lia%le !or FR o! the

da"a&es sustained %. the car&o# This solidarit. lia%ilit. $as %orne %. their

!ailure to prove that the. e?ercised e?traordinar. dili&ence in the vi&ilance

over the %a&s o! ce"ent entrusted to the" !or transport# n the other hand,

the + passed on the re"ainin& BR o! the a"ount clai"ed to the shipper,

+-0I, and its a&ent, +N@, upon a !indin& that the da"a&e $as partl.

due to the car&oMs in!erior pacin

7ith respect to -GN+, the + a!!ir"ed the !indin&s o! the -T+ that it

did not ac3uire ;urisdiction over its person !or de!ective service o! su""ons#

P-TIMs, S/IN7Ms, SMs and +N@Ms respective "otions !or

reconsideration $ere su%se3uentl. denied in the +Ms assailed e%ruar. 1F,

*6 -esolution#

Issues >e!ore the +ourt

P-TI, S/IN7, S and +N@ !iled separate petitions !or revie$

on certiorari %e!ore the +ourt, doceted as G#-# Nos# 1F191, 1F161, and1F166B, $hich $ere ordered consolidated in the +ourts -esolution dated

Jul. B1, *6# 1

n pril *1, *6, S "ani!ested 16that it $ill no lon&er pursue its petition

in G#-# No# 1F161 and has pre!erred to a$ait the resolution in G#-# No#

1F166B !iled %. P-TI and S/IN7# ccordin&l., an entr. o! ;ud&"ent1Fa&ainst it $as "ade on u&ust 1H, *6# 8ie$ise, on Nove"%er *9, *F,

P-TI and S/IN7 "oved1H!or the $ithdra$al o! their petitions !or

lac o! interest, $hich the +ourt &ranted in its Januar. *1, *H -esolution# 19

The correspondin& entr. o! ;ud&"ent *a&ainst the" $as "ade on Karch 1F,
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18/24

*H#

Thus, onl. the petition o! +N@ re"ained !or the +ourtMs resolution, $ith

the lone issue o! $hether or not it "a. %e held lia%le to the respondents !or

BR o! their clai"#

Kaintainin& that it $as not a part. to the %ill o! ladin&, +N@ asserts that

it cannot %e held lia%le !or the da"a&es sou&ht to %e collected %. therespondents# It also alle&ed that since its principal, +-0I, $as not

i"pleaded as a part.2de!endantArespondent in the instant suit, no lia%ilit. can

there!ore attach to it as a "ere a&ent# Koreover, there is dearth o! evidence

sho$in& that it $as responsi%le !or the supposed de!ective pacin& o! the

&oods upon $hich the a$ard $as %ased#

The +ourtMs -ulin&

%ill o! ladin& is de!ined as an instru"ent in $ritin&, si&ned %. a carrier or

his a&ent, descri%in& the !rei&ht so as to identi!. it, statin& the na"e o! the

consi&nor, the ter"s o! the contract !or carria&e, and a&reein& or directin& that

the !rei&ht to %e delivered to the order or assi&ns o! a speci!ied person at a

speci!ied place# *1

It operates %oth as a receipt and as a contract# s a receipt, it recites the date

and place o! ship"ent, descri%es the &oods as to 3uantit., $ei&ht, di"ensions,

identi!ication "ars and condition, 3ualit., and value# s a contract, it na"es

the contractin& parties, $hich include the consi&nee, !i?es the route,

destination, and !rei&ht rates or char&es, and stipulates the ri&hts ando%li&ations assu"ed %. the parties# **s such, it shall onl. %e %indin& upon

the parties $ho "ae the", their assi&ns and heirs# *B

In this case, the ori&inal parties to the %ill o! ladin& are' (a) the shipper

+-0I< (%) the carrier P-TI< and (c) the consi&nee /IN0-I+/#

/o$ever, %. virtue o! their relationship $ith P-TI under separate charter

arran&e"ents, S/IN7, / and its a&ent S lie$ise %eca"e

parties to the %ill o! ladin In the sa"e vein, +N@, as ad"itted a&ent o!

+-0I, also %eca"e a part. to the said contract o! carria&e#

The respondents, ho$ever, "aintain*that +N@ is a ship a&ent and not

a "ere a&ent o! +-0I, as !ound %. %oth the + *and the -T+# *6

The +ourt disa&rees#

rticle H6 o! the +ode o! +o""erce provides'

-T# H6# The shipo$ner and the ship a&ent shall %e civill. lia%le !or the actso! the captain and !or the o%li&ations contracted %. the latter to repair, e3uip,

and provision the vessel, provided the creditor proves that the a"ount clai"ed

$as invested therein#

4y ship agent is understood the person entrusted "ith the provisioning of a

vessel! or "ho represents her in the port in "hich she may be found.

("phasis supplied)

-ecords sho$ that the o%li&ation o! +N@ $as li"ited to in!or"in& the

consi&nee /IN0-I+/ o! the arrival o! the vessel in order !or the latter to

i""ediatel. tae possession o! the &oods# No evidence $as o!!ered to

esta%lish that +N@ had a hand in the provisionin& o! the vessel or that it

represented the carrier, its charterers, or the vessel at an. ti"e durin& the

unloadin& o! the &oods# +learl., +N@Ms participation $as si"pl. to

assu"e responsi%ilit. over the car&o $hen the. $ere unloaded !ro" the

vessel# /ence, no reversi%le error $as co""itted %. the courts a 3uo in

holdin& that +N@ $as not a ship a&ent $ithin the "eanin& and conte?t

o! rticle H6 o! the +ode o! +o""erce, %ut a "ere a&ent o! +-0I, the

shipper#

n this score, rticle 1H6H o! the +ivil +ode states'

-T# 1H6H# >. the contract o! a&enc., a person %inds hi"sel! to render so"e

service or to do so"ethin& in representation or on %ehal! o! another, $ith the

consent or authorit. o! the latter#

+orollaril., rticle 1H9F o! the sa"e +ode provides that an a&ent is not

personall. lia%le to the part. $ith $ho" he contracts, unless he e?pressl.

%inds hi"sel! or e?ceeds the li"its o! his authorit. $ithout &ivin& such part.
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su!!icient notice o! his po$ers#

>oth e?ceptions do not o%tain in this case# -ecords are %ere!t o! an. sho$in&

that +N@ e?ceeded its authorit. in the dischar&e o! its duties as a "ere

a&ent o! +-0I# Neither $as it alle&ed, "uch less proved, that +N@Ms

li"ited o%li&ation as a&ent o! the shipper, +-0I, $as not no$n to

/IN0-I+/#

urther"ore, since +-0I $as not i"pleaded as a part. in the instant suit,

the lia%ilit. attri%uted upon it %. the + *Fon the %asis o! its !indin& that the

da"a&e sustained %. the car&o $as due to i"proper pacin& cannot %e %orne

%. +N@# s "ere a&ent, +N@ cannot %e "ade responsi%le or held

accounta%le !or the da"a&e supposedl. caused %. its principal# *H

ccordin&l., the +ourt !inds that the+ erred in orderin& +N@ ;ointl.

and severall. lia%le $ith +-0I to pa. BoAo o! the respondentsM clai"#

7/--, the assailed 0ecision and -esolution o! the +ourt o! ppeals

are here%. -@-S0#6a"p99i6The co"plaint a&ainst petitioner ce

Navi&ation +o#, Inc# is here%. 0ISKISS0#

S -0-0#

HOME INSURANCE COMPAN< 3s! AMERICAN STEAMSHIP

AGENCIES, INC! and LU.ON STE6E1ORING CORPORATION

G!R! N"! L-*++//

Apr2l $, #/;:

FACTS5 D+onsorcio Pes3uero del Peru o! South "ericaE shipped !rei&htpre2paid at Peru, ;ute %a&s o! Peruvian !ish "eal throu&h SS +ro$%orou&h,covered %. clean %ills o! ladin The car&o, consi&ned to San Ki&uel >re$er.,Inc#, no$ San Ki&uel +orporation, and insured %. /o"e Insurance +o"pan.arrived in Kanila and $as dischar&ed into the li&hters o! 8uCon Stevedorin&+o"pan.# 7hen the car&o $as delivered to consi&nee San Ki&uel >re$er.Inc#, there $ere shorta&es causin& the latter to la. clai"s a&ainst 8uConStevedorin& +orporation, /o"e Insurance +o"pan. and the "ericanStea"ship &encies (shipo$ner), o$ner and operator o! SS +ro$%orou&h#

>ecause the others denied lia%ilit., /o"e Insurance +o"pan. paid SK>I theinsurance value o! the loss, as !ull settle"ent o! the clai"# /avin& %eenre!used rei"%urse"ent %. %oth the 8uCon Stevedorin& +orporation and"erican Stea"ship &encies, /o"e Insurance +o"pan., as su%ro&ee to theconsi&nee, !iled a&ainst the" %e!ore the +I o! Kanila a co"plaint !orrecover. o! the pa."ent paid $ith le&al interest, plus attorne.s !ees#

In ans$er, 8uCon Stevedorin& +orporation alle&ed that it delivered $ith duedili&ence the &oods in the sa"e 3uantit. and 3ualit. that it had received thesa"e !ro" the carrier#

The +I, a!ter trial, a%solved 8uCon Stevedorin& +orporation, havin& !oundthe latter to have "erel. delivered $hat it received !ro" the carrier in thesa"e condition and 3ualit., and ordered "erican Stea"ship &encies to pa./o"e Insurance +o"pan. the a"ount de"anded $ith le&al interest plusattorne.s !ees#

0isa&reein& $ith such ;ud&"ent, "erican Stea"ship &encies appealeddirectl. to 5s#

ISSUE' Is the stipulation in the charter part. o! the o$ners non2lia%ilit.

valid so as to a%solve the "erican Stea"ship &encies !ro" lia%ilit. !orlossL

HEL1' The ;ud&"ent appealed !ro" is here%. re3ersedand appellant isa%solved !ro" lia%ilit. to plainti!!#

S

The %ills o! ladin&, coverin& the ship"ent o! Peruvian !ish "eal provide at the%ac thereo! that the %ills o! ladin& shall %e &overned %. and su%;ect to theter"s and conditions o! the charter part., i! an., other$ise, the %ills o! ladin&

prevail over all the a&ree"ents# n the %ills are sta"ped Drei&ht prepaid asper charter part.# Su%;ect to all ter"s, conditions and e?ceptions o! charter

part. dated 8ondon, 0ec# 1B, 196*#E

Se't2"n *, para8rap( * "7 t(e '(arter party, provides that the o$ner islia%le !or loss or da"a&e to the &oods caused %. pers"nal 9ant "7 dued2l28en'eon its part or its "ana&er to "ae the vessel in all respectssea$orth. and to secure that she %e properl. "anned, e3uipped and suppliedor %. the pers"nal a't "r de7ault "7 t(e "9ner "r 2ts ana8er# Said

para&raph, ho$ever, e4eptsthe o$ner o! the vessel !ro" an. loss orda"a&e or dela. arisin& !ro" an. other source, even !ro" the ne&lect or 7ault"7 t(e 'apta2n "r 're9 "r s"e "t(er pers"ne"plo.ed %. the o$ner on

%oard, !or $hose acts the o$ner $ould ordinaril. %e lia%le e?cept !or said

para&raph##
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The provisions o! our +ivil +ode on co""on carriers $ere taen !ro" n&lo2"erican la$# 5nder "erican ;urisprudence, a co""on carrier undertain&to carr. a special car&o or '(artered t" a spe'2al pers"n "nly, be'"es apr23ate 'arr2er#s a private carrier, a stipulation e?e"ptin& the o$ner !ro"lia%ilit. !or the ne&li&ence o! its a&ent is not a&ainst pu%lic polic., and isdee"ed valid#

Such doctrine 7e !ind reasona%le# The +ivil +ode provisions on co""oncarriers should not %e applied $here the carrier is not actin& as such %ut as a

private carrier# The stipulation in the charter part. a%solvin& the o$ner !ro"lia%ilit. !or loss due to the ne&li&ence o! its a&ent $ould %e void onl. i! thestrict pu%lic polic. &overnin& co""on carriers is applied# Such polic. has no!orce $here the pu%lic at lar&e is not involved, as in the case o! a ship totall.chartered !or the use o! a sin&le part.#

nd !urther"ore, in a charter o! the entire vessel, the %ill o! ladin& issued %.the "aster to the charterer, as shipper, is in !act and le&al conte"plation"erel. a receipt and a docu"ent o! title not a contract, !or the contract is thecharter part.# The consi&nee "a. not clai" i&norance o! said charter part.

%ecause the %ills o! ladin& e?pressl. re!erred to the sa"e# ccordin&l., the

consi&nees under the %ills o! ladin& "ust lie$ise a%ide %. the ter"s o! thecharter part.# nd as stated, recover. cannot %e had thereunder, !or loss orda"a&e to the car&o, a&ainst the shipo$ners, unless the sa"e is due to

personal acts or ne&li&ence o! said o$ner or its "ana&er, as distin&uished !ro"its other a&ents or e"plo.ees# In this case, no such personal act or ne&li&encehas %een proved#

Insurance +o# ! North "erica vs sian Ter"inal 0+T-IN'

The ter" Dcarria&e o! &oodsE in the +arria&e o! Goods %. Sea ct (+GS)covers the period !ro" the ti"e the &oods are loaded to the vessel to the ti"e

the. are dischar&ed there!ro"#V The carrier and the ship shall %e dischar&ed !ro" all lia%ilit. in respect o!loss or da"a&e unless suit is %rou&ht $ithin one .ear a!ter deliver. o! the&oods or the date $hen the &oods should have %een delivered#+TS'V n Nove"%er 9, **, Kacro28ito +orporation, throu&h KA@ D0IKI PEvessel, 1H paca&es o! electrol.tic tin !ree steel, co"plete and in &oodcondition#V The &oods are covered %. a %ill o! ladin&, had a declared value o!W169,H#B and $as insured $ith the Insuracne +o"pan. o! North "erica(Petitioner) a&ainst all ris#

V The carr.in& vessel arrived at the port o! Kanila on Nove"%er 19, **,

and $hen the ship"ent $as dischar&ed there!ro", it $as noted that F o! thepaca&es $ere da"a&ed and in %ad condition#V n Nover"%er *1, **, the ship"ent $as then turned over to the custod.o! sian Ter"inals# Inc# (-espondent) !or stora&e and sa!eeepin& pendin& its$ithra$al %. the consi&nee#V n Nove"%er *9, **, prior to the $ithra$al o! the ship"ent, a ;ointinspection o! the said car&o $as conducted# The e?a"ination report sho$edthat an additional paca&es $ere !ound to %e da"a&ed and in %ad order#

V n Januar. 6, *B, the consi&nee, San Ki&uel +orporation !iled separateclai"s a&ainst %oth the Petioner and the -espondent !or the da"a&e caused tothe paca&es#V The Petitioner then paid San Ki&uel +orporation the a"ound o! PhPB1,9*#1 $hich is %ased on a report o! its independent ad;uster#V The Petitioner then !or"all. de"anded reparation a&ainst the -espondent!or the a"ount it paid San Ki&uel +orporation#V or the !ailure o! the -espondent to satis!. the de"and o! the Petitioner,the Petitioner !iled !or an action !or da"a&es $ith the -T+ o! Kaati#V The trial court !ound that indeed, the ship"ent su!!ered additional da"a&eunder the custod. o! the -espondent prior to the turn over o! the said

ship"ent to San Ki&uel#V s to the e?tent o! lia%ilit., -espondent invoed the +ontract !or +ar&o/andlin& Services e?ecuted %et$een the Philippine Ports uthorit. and the-espondent# 5nder the contract, the -espondents lia%ilit. !or da"a&e tocar&oes in its custod. is li"ited to PhP, !or each paca&e, unless thevalue o! the car&o ship"ent is other$ise speci!ied or "ani!ested in $ritin&to&ether $ith the declared >ill o! 8adin The trial +ourt !ound that theshipper and consi&nee $ith the said re3uire"ents#V /o$ever, the trial court dis"issed the co"plaint on the &round that thePetitioners clai" $as %arred %. the statute o! li"itations# It held that the+arria&e o! Goods %. Sea ct (+GS), e"%odied in +o""on$ealth ct

No# 6 is applica%le# The trial court held that under the said la$, the shipperhas the ri&ht to %rin& a suit $ithin one .ear a!ter the deliver. o! the &oods orthe date $hen the &oods should have %een delivered, in respect o! loss orda"a&e thereto#V Petitioner then !iled %e!ore the Supre"e +ourt a petition !or revie$ oncertiorari assailin& the trial courts order o! dis"issal#ISS5AS'1#) 7hether or not the trial court co""itted an error in dis"issin& theco"plaint o! the petitioner %ased on the one2.ear prescriptive period !or !ilin&a suit under the +GS to an arrastre operatorL S#*#) 7hether or not the Petitioner is entitled to recover actual da"a&es

a&ainst the -espondentL S, %ut onl. PhP16,*H#F6


21/24

/80'V The ter" Dcarria&e o! &oodsE covers the period !ro" the ti"e $hen the&oods are loaded to the ti"e $hen the. are dischar&ed !ro" the ship# Thus, itcan %e in!erred that the period o! ti"e $hen the &oods have %een dischar&ed!ro" the ship and &iven to the custod. o! the arrastre operator is not covered

%. the +GS#V The Petitioner, $ho !iled the present action !or the paca&es that $ereda"a&ed $hile in the custod. o! the respondent $as not !ortri&ht in its clai",

as it ne$ that the da"a&es it sou&ht, %ased on the report o! its ad;ustercovered 9 paca&es# >ased on the report, onl. !our o! the nine paca&es $ereda"a&ed in the custod. o! the -espondent# The Petitioner can %e &ranted onl.the a"ount o! da"a&es that is due to it

ENJAMIN CUA =CUA UlAN TE>?, Petitioner,2versus2 0 ALLEMPHILIPPINES SHIPPING,INC! and A16ANCE SHIPPINGCORPORATION,-espondents# G!R! N"! #))&

n Nove"%er 1*, 199, +ua !iled a civil action !or da"a&es a&ainst7alle"and dvance Shippin& %e!ore the -T+ o! Kanila# +ua sou&ht the pa."ent o!

P*,B,BB#* !or da"a&e to *1H tons and !or a shorta&e o! tons o!ship"ent o! >raCilian So.a%ean consi&ned to hi", as evidenced %.>ill o!8adin& No# 1# /e clai"ed that the loss $as due to the respondents !ailure too%serve e?traordinar. dili&ence in carr.in& the car&o#dvance Shippin& !iled a"otion to dis"iss the co"plaint, ssailin& the -T+s ;urisdiction over +uasclai"< it ar&ued that +uas clai" should have !irst %een %rou&ht to ar%itration#+ua opposed dvance Shippin&s ar&u"ent< he contended that he, as aconsi&nee, $as not %ound %. the+harter Part. &ree"ent, $hich $as acontract %et$een the ship o$ner (dvance Shippin&) and the charterers# The-T+ initiall. de!erredresolvin& the 3uestion o! ;urisdiction until a!ter trial on the"erits, %ut upon "otion %. dvance Shippin&, the -T+ ruled that +ua $as not

%ound %. thear%itration clause in the +harter Part. &ree"ent# In the "eanti"e,7alle" !iled its o$n "otion to dis"iss, raisin& the sole &round o!

prescription# Section B(6) o! the +arria&e o! Goods %. Sea ct (C7GS )provides that Dthe carrier and the ship shall %e dischar&ed !ro" all lia%ilit. inrespect o! loss or da"a&e unless suit is %rou&ht 92t(2n "ne year a7terdel23ery "7 t(e 8""ds #E 7alle" alle&ed that the &oods $ere delivered to +uaon u&ust 16, 19H9, %ut the da"a&es suit $as institutedonl. on Nove"%er 1*,199 : "ore than one .ear than the period allottedunder the +GS# Sincethe action $as !iled %e.ond the one .ear prescriptive period, 7alle" ar&uedthat +uas action has %een %arred# +ua !iled an opposition to 7alle"s "otionto dis"iss, den.in& the latters clai" o! prescription#

+ua re!erred to the Au8ust #%, #//% tele4 "essa&e sent %. Kr# #-# ilder o! Tho"asKiller, "ana&er o! the 5 PUI +lu%, $hich stated that dvance Shippin&a&reed to e?tend theco""ence"ent o! suit !or 9 da.s, !ro" u&ust 1, 199to Nove"%er 1*, 199< the e?tension $as "ade $ith the concurrence o! theinsurer o! the vessel, the 5 PUI +lu%#n e%ruar. 11, 199*, 7alle" !iledan o"ni%us "otion, $ithdra$in& its "otion to dis"iss and adoptin& insteadthe ar&u"ents in dvance Shippin&s "otion to dis"iss# It "ade an e?pressreservation, ho$ever, that it $as not $aivin& Dthe de!ense o! prescription and

$ill alle&e as one o! its de!enses, such de!ense o! prescription andAor laches inits ns$er should this %e re3uired %. the circu"stances#n order dated June, 199*, the -T+ resolved that Dthe +ourt need not act on the Kotion to0is"iss !iled %. the de!endant 7alle" Philippines Shippin&, Inc#,OE andre3uired the de!endants therein to !ile their ns$er#

The respondents !iled an appeal $ith the +, insistin& that +uas clai" isar%itra%le and has %een %arred %. prescription andAor laches#

The + !ound the respondents clai" o! prescription "eritorious a!ter !indin&that the u&ust 1, 199 tele? "essa&e, e?tendin& the period to !ile an action,

$as neither attached to +uas opposition to 7alle"s "otion to dis"iss, norpresented durin& trial# The + ruled that there $as no %asis !or the -T+ toconclude that the prescriptive period $as e?tended %. the parties a&ree"ent#/ence, it set aside the -T+ decision and dis"issed +uas co"plaint# +ua!iled a "otion !or reconsideration o! the + decision, $hich $as denied %.the + in a resolution dated Januar. B1, *6#

+ua thus !iled the present petition to assail the + rulin&s#

SS5S'

"hether or not Cua#s claim for payment of damages against the respondentshas prescribed

#-58ING'

!ter considerin& the !acts and the applica%le la$, the +ourt !inds that +uati"el. !iled his clai" %e!ore the trial court#Section 1, -ule 16 o! the -ules o!+ourt enu"erates the &rounds on $hich a "otion to dis"iss a co"plaint "a. %e

%ased, and the prescription o! an action is included as one o! the &roundsunder para&raph (!)# The de!endant "a. either raise the &rounds in a "otionto dis"iss or plead the" as an a!!ir"ative de!ense in his ans$er#

The !ailure to raise or plead the&rounds &enerall. a"ounts to a $aiver, e?cept


22/24

i! the &round pertains to (1)lac o! ;urisdiction over the su%;ect "atter, (*)litispendentia, (B)res udicata , or () prescription#

I! the !acts supportin& an. o! these !our listed &rounds are apparent !ro" thepleadin&s or the evidence on record, thecourts "a. consider these &roundsmotu proprio and accordin&l. dis"iss the co"plaint#The +ourt, there!ore,need notresolve the 3uestion o! $hether 7alle" actuall. $aived the de!enseo! prescription< an in3uir. into this 3uestion is u

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