Case Digests in Transportation Law.

De Guzman vs. Court of Appeals.

Ernesto Cendana was a junk dealer, engaged in the business of buying scrap
materials from Pangasinan, and selling them in Manila. On his return trips, he would
take cargo from various merchants for delivery to Pangasinan, charging lower than
commercial rates.
On one such transaction, he received 750 cartons of Liberty filled milk, from
Pedro De Guzman. He transported 600 cartons on the truck driven by his employee. The
remainder, he drove himself from Makati, to Urdaneta, Pangasinan.
Only 150 boxes were delivered. The truck driven by his employee were hijacked
in Paniqui, Tarlac. The driver and the helper were kidnapped to Zambales, along with
their cargo. Thus, Pedro De Guzman, the merchant, sued Ernesto Cendana as a common
carrier.
The Regional Trial Court held Cendana liable as a common carrier, for the
amount of 22,150.00 pesos. The Court of Appeals ruled that Cendana transported goods
as a casual occupation, without a Certificate of Public Convenience. Thus, Cendana
could not have been a common carrier.
The Supreme Court ruled that Cendana was a common carrier. Article 1732 of
the New Civil Code provides that, 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.
However, a certificate of public convenience is not a requisite for the incurring of
liability under the Civil Code provisions governing common carriers. Cendana is not
liable for the value of the undelivered merchandise, which was lost because of an event
entirely beyond private respondent's control.

First Philippine Industrial Corporation vs. Court of Appeals.

FPIC is the grantee of a pipeline concession, tasked with the installation and
operation of pipelines. It was first granted in 1967; and later renewed in 1992. FPIC
applied for a mayors permit in Batangas City in 1995. Before it was granted, the city
government assessed a business tax amounting to 956,076.04 pesos.
FPIC paid the taxes under protest and pleaded that it was exempted from paying
such taxes, under the Local Government Code. Section 133 of the Local Government
Code, exempts transportation carriers from paying taxes on gross receipts.
The Supreme Court ruled that the test for determining whether a party is a
common carrier of goods is:
1) He must be engaged in the business of carrying goods for others as a
public employment, and must hold himself out as ready to engage in
the transportation of goods for person generally as a business and not
as a casual occupation;
2) He must undertake to carry goods of the kind to which his business is
confined;
3) He must undertake to carry by the method by which his business is
conducted and over his established roads; and
4) The transportation must be for hire.
FPIC is engaged in the business of transporting or carrying goods, i.e. petroleum
products, for hire as a public employment. It undertakes to carry for all persons
indifferently, that is, to all persons who choose to employ its services, and transports the
goods by land and for compensation. The fact that petitioner has a limited clientele does
not exclude it from the definition of a common carrier.

Calvo vs. UCPB General Insurance.

Virgines Calvo is the owner of Transorient Container Terminal Services, Inc. It is
a sole proprietorship customs broker. She entered into a contract with San Miguel
Coporation, for the transfer of 114 reels of fluting paper, and 124 reel of Kraft liner
board, from the Port of Manila to the SMC warehouse in Ermita, Manila.

The goods arrived in Manila, in July 1990 in 30 metal vans. The inspector noted
that 15 reels of fluting paper, and 3 reels of Kraft liner board sustained water damage.
This was pegged at 93,112.00 pesos.
San Miguel Corporation collected payment from the insurer, UCPB General
Insurance. UCPB now sued Calvo as the subrogee. Calvo argued that she was not a
common carrier; she does not indiscriminately hold her services out to the public but
only offers the same to select parties with whom she may contract in the conduct of her
business.
The Supreme Court ruled that Calvo is a common carrier. The transportation of
goods, is an integral part of her business. To rule in her favor, would be to deprive those
with whom she contracts, the protection of the law. The obligation to carry goods for
her customers, is part and parcel of Calvos business.

FGU Insurance Corporation vs. GP Sarmiento Trucking Corporation.

GP Sarmiento Trucking, undertook the delivery of 30 units of Condura SD
refrigerators, from the plant of Concepcion Industries in Alabang, to Dagupan City. The
refrigerators were loaded in one of the GPS Isuzu trucks.
This truck suffered a collision with an unidentified truck, along Bamban, Tarlac,
causing it to fall into a deep canal. The cargo suffered damage. FGU Insurance paid
Concepcion Industries, the sum of 204,450.00 pesos for the value of the covered cargo.
FGU now sued GP Sarmiento for damages.
GP Sarmiento Trucking argued that it cannot be held liable because it was a
private carrier. Thus, the rules on negligence as applied to common carriers, are
inapplicable.
The Supreme Court ruled that GP Sarmiento is not a common carrier. The facts
show that the trucking company, has been the exclusive contractor and hauler for
Concepcion Industries, since 1970. It has rendered or offered its services to no other
individual.
The true test of a common carrier, is the carriage of passengers or goods,
providing space for those who opt to avail themselves, of its transportation service for a
fee. The key phrase here is providing space.

Being a private carrier, however, does not operate to exculpate GP Sarmiento

from liability. It only means that the rules for proving liability are different. GP
Sarmiento is still liable in the present case.
The distinction between the ruling in Calvo vs. UCPB and the present case, FGU
Insurance vs. GP Sarmiento Trucking, is that Calvo has offered her services to others.
GP Sarmiento has exclusivity of contract. When the offer to carry goods is exclusive, the
carrier is a private carrier.

Philippine American General Insurance vs. PKS Shipping Company.

Davao Union Marketing Corporation engaged the services of PKS Shipping, for
the delivery of 75,000 bags of cement, to Tacloban City. The goods were loaded on Limar
1, and towed by MT Iron Eagle. Both vessels were owned by PKS Shipping. The barge
sank near Zamboanga del Sur, along with the cargo worth 3.375 million pesos.
DUMC filed a formal claim with its insurer, the Philippine American General
Insurance. Phil-Am General made payment and sued PKS Shipping as a common
carrier.
The Supreme Court ruled that the distinction between a common, and a private
carrier, lies in the singularity of transaction. If the undertaking is an isolated transaction,
and not part of the business of the carrier it is a contract of private carriage.
In the present case, PKS Shipping has engaged itself in the business of carrying
goods for others, although for a limited clientele. This service is for a fee. It is the
regularity of the transactions in the area, which indicates that PKS is actually a common
carrier.
However, the status of PKS Shipping as a common carrier, absolves it of liability.
The sinking of the barge was caused by the waves up to eight feet in height. The
Supreme Court ruled that the sinking was caused by force majeure; thus PKS Shipping
is not liable.

Asia Lighterage and Shipping vs. Court of Appeals.

Marubeni American Corporation shipped 3,150 metric tons of white wheat from
Portland, Oregon to Manila, for delivery to the General Milling Corporation in Manila.

The services of Asia Lighterage and Shipping Inc. were engaged for the delivery of the
goods, from the port of Manila to the warehouse in Barrio Ugong, Pasig City.
Upon arrival, 900 metric tons were loaded aboard PSTSI 3, a barge owned by Asia
Lighterage. The transport was suspended due to a typhoon warning. It was tied down
with other barges to weather the storm. PSTSI 3 developed a list, or leaning because of a
hole. The barge was refloated and patched with clay and cement.
The vessel again ran aground due to strong currents. The cargo was transferred
to three other barges. The rest of the cargo was lost when the towing bits of the barge
broke. Salvage operations recovered the total amount of 201.379.75 pesos.
Prudential Guarantee and Assurance paid 4,104.654.22 pesos to the consignee,
the General Milling Corporation. Asia Lighterage and Shipping denied liability from
the claim, stating that it was not a common carrier. Allegedly, it has no fixed and
publicly known route, maintains no terminals, and issues no tickets. It points out that it
is not obliged to carry indiscriminately for any person. It is not bound to carry goods
unless it consents. In short, it does not hold out its services to the general public.
The Supreme Court ruled that, the principal business of the petitioner is that of
lighterage and shipping. It offers its barges to the public, for carrying or transporting
goods by water, for compensation. The argument that it only does so for a limited
clientele, is untenable.
Asia Lighterage and Shipping failed to exercise the extraordinary diligence
required for common carriers. It had faced the typhoon head on. Thus, it was held liable
for damages.

Spouses Cruz vs. Sun Holidays.

Spouses Dante and Leonora Cruz sued Sun Holidays, for the death of their son
Ruelito and his wife. The young couple were away for their honeymoon, when they
availed of the tour package from Batangas to Puerto Galera.
Miguel Matute, a scuba diving instructor, narrated that he and 25 other guests of
the Coco Beach Island Resort trekked to the other side of the Coco Beach Mountain. The
mountain shielded the boats from the strong winds. They board the M/B Coco Beach 3,
which was to ferry them back to Batangas.

Shortly after they started sailing, it started to rain. The rain and wind got
stronger, causing the boat to tilt from side to side. After crashing against two big waves,
the M/B Coco Beach 3 capsized. The captain told the passengers to save themselves.
They were rescued by two passing boats, which brought them to Pisa Island. Eight of
the 25 passengers perished during the incident.
Dante and Leonora Cruz sued Sun Holidays, for the sum of 4,000,000.00 pesos;
their son was currently employed as a contractual worker in Saudi Arabia. Sun Holidays
offered to settle the case, indemnifying the parents with 10,000.00 pesos.
The Regional Trial Court and the Court of Appeals were one in holding that, Sun
Holidays was a private carrier; and that the proximate cause of the incident was a
squall, a fortuitous event. Thus, the claim and counter-claim of 300,000.00 were both
denied.
The Supreme Court ruled that, Sun Holidays is a common carrier. Its ferry
services are so intertwined with its main business as to be properly be considered
ancillary thereto. The constancy of respondents ferry services, in its resort operations is
underscored by its having its own fleet of Coco Beach boats.
The tour packages it offers, which include ferry services, may be availed of by
anyone who can afford to pay the same. Thus, these services are available to the public.

Estrellita Bascos vs. Court of Appeals.

Jibfair Shipping Agency contracted the services of Cipriano Trading Enterprise
for the hauling of 2,000 metric tons of soya bean meal, from Del Pan, Manila to the
warehouse of Purefoods in Calamba, Laguna. Cipriano Trading sub-contracted with
Estrellita Bascos for the hauling, at 50 pesos per metric ton.
The shipment never made it to the warehouse. It was apparently hijacked in
Paco, Manila. Cipriano sued Bascos for damages, amounting to 156,404.00 pesos.
In its defense, Bascos averred that it was not a common carrier; her services were
only offered to a limited clientele. She submitted an affidavit, showing that her trucks
were leased by Cipriano Trading Enterprise.
The Regional Trial Court and the Court of Appeals were one in holding Bascos as
a common carrier, citing Article 1732 of the New Civil Code. The law makes no

distinctions between offering the service to the public, and to a limited clientele, in the
determination of the contract of common carriage.
The Supreme Court ruled that by Bascos own admission, she was in the trucking
business, offering her trucks with cargo to move. Bascos was indeed, a common carrier.
The Court ruled that a contract is not what the parties say it is, but how the law defines
it.
As a common carrier, Bascos failed to prove the existence of a grace, irresistible
force, which renders robbery an exculpatory cause for the negligence of common
carriers.

AF Sanchex Brokerage vs. Court of Appeals.

Wyeth Pharma shipped 194 cartons of oral contraceptives, from Dussldorf,
Germany to Manila. The shipment was insured by FGU Insurance. The shipment
arrived in the Ninoy Aquino International Airport and was delivered to Philippine
Skylanders, Inc. for safekeeping.
Wyeth engaged the services of AF Sanchez Brokerage for the release of the
shipment. A customs broker calculates and pays for the customs duties, taxes and
storage fees of the cargo.
AF Sanchez Brokerage successfully brokered the release of the shipment, without
issue. Upon instructions from Wyeth, the cargo was delivered to Hizon Laboratories, in
Antipolo City. The laboratory received only 160 in good order. The 44 other cartons of
oral contraceptives were declared in bad order, due to water damage. These were later
destroyed for emitting a foul smell.
FGU Insurance promptly paid the sum of 181,431.49 as the value of the shipment.
FGU sued AF Sanchez Brokerage in the Regional Trial Court of Makati.
AF Sanchez Brokerage averred that it was a customs broker and not a common
carrier. It disclaimed liability for the water damage, claiming that it was due to
improper and insufficient packaging.
The Regional Trial Court dismissed this contention, as pure guesswork on the
part of the surveyors. The Court of Appeals ruled that AF Sanchez Brokerage was also
engaged in the business of delivering goods, thus it was a common carrier.

The Supreme Court ruled that, 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. It
does not distinguish between one whose principal business activity is the carrying of
goods and one who does such carrying only as an ancillary activity. All the law requires
is that, the petitioner undertakes to deliver goods, for pecuniary consideration.
As a common carrier, AF Sanchez Brokerage failed to exercise the extraordinary
diligence required of common carriers. Thus, they are liable for the damages caused by
the loss of 44 cartons of oral contraceptives.

Estela Crisostomo vs. Court of Appeals.

Estela Crisostomo contracted the services of Caravan Travel and Tours
International, to arrange and facilitate her booking, ticket and accommodation, in a tour
dubbed as Jewels of Europe. She paid the ticketing manager, her niece, upon delivery of
the travel documents, the sum of 74,322.70 pesos. She was told to proceed to the airport
on June 15, 1991.
Crisostomo learned that her flight had already departed, one full day before. She
complained to Meriam Menor. Menor secured a different tour for her, called the British
Pageant, valued at 20,881.00 pesos. She made a partial payment. Upon her return, she
sued Caravan Travel and Tours for reimbursement for the first tour, less her balance
from the second.
She argued that Caravan Travel and Tours, as a common carrier, failed to meet
the exacting standards of diligence required. Caravan, averred that the payment has
already been remitted to its principal in Singapore; no refund was possible.
The Regional Trial Court ruled that Crisostomo was guilty of contributory
negligence; it reduced her claim by 10% and ordered Caravan Travel and Tours, to pay.
The Court of Appeals held that both parties are at fault; but ruled that Estrellita
Crisostomo was more negligent.
The Supreme Court ruled that, a contract of carriage or transportation is one
whereby a certain person or association of persons obligate themselves to transport
persons, things, or news from one place to another for a fixed price. Such person or

association of persons are regarded as carriers and are classified as private or special
carriers and common or public carriers.
Caravan Travel and Tours, therefore, is not an entity engaged in the business of
transporting either passengers or goods and is therefore, neither a private nor a
common carrier. Respondents services as a travel agency include procuring tickets and
facilitating travel permits or visas as well as booking customers for tours.
Thus, Crisostomo was ordered to pay the sum of 12,901.00 pesos, the balance of
her British Pageant tour.

Asian Terminals, Inc. vs. Daehan Fire and Marine Insurance.

Doosan Corporation shipped 26 boxes of printed aluminum sheets to Access
International, in Manila. The cargo was insured by Daehan Fire and Marine Insurance.
The vessel arrived that the containerized van was discharged by Asian Terminals Inc.
Access International requested a survey from its broker, V. Reyes Lazo of the
shipment in the container terminal; but no such inspection was made. Upon delivery to
Access International, fourteen of the 26 boxes were missing. Access International filed a
claim against the arrastre operator, and the customs broker for the sum of $34,993.28.
this claim was denied; thus the insurer was constrained to pay $45,742.81.
Daehan Fire and Marine Insurance, as the subrogee sued the shipping line, the
arrastre operator and the broker. They claimed that the losses occurred while the subject
shipment was in the custody, possession or control of the shipper, its trucker, the
arrastre operator, or their representatives, or due to the consignees own negligence.
The Supreme Court ruled that, in the performance of its obligations, an arrastre
operator should observe the same degree of diligence as that required of a common
carrier and a warehouseman. Being the custodian of the goods discharged from a vessel,
an arrastre operators duty is to take good care of the goods and to turn them over to the
party entitled to their possession.

Spouses Perena vs. Spouses Zarate.

The spouses Zarate engaged the services of the spouses Perena for transporting
their son, Aaron John Zarate from Paranaque, to Don Bosco Technical Institute in
Makati. For this purpose, they employed a Kia Ceres van driven by, Jhonny Alano.
In June 1996, the school service was running late, when the driver decided to take
a shortcut along the South Superhighway. It overtook a passenger bus at a railroad
crossing. The vans rear door collided with the train. The impact threw nine out of the
14 passengers out of the van. Aaron John fell on the train tracks and was dragged along
by the train. His head was severed; Jhonny Albano fled the scene.
A carrier is a person or corporation who undertakes to transport or convey goods
or persons from one place to another, gratuitously or for hire. The carrier is classified
either as a private/special carrier or as a common/public carrier.
A private carrier is one who, without making the activity a vocation, or without
holding himself or itself out to the public as ready to act for all who may desire his or its
services, undertakes, by special agreement in a particular instance only, to transport
goods or persons from one place to another either gratuitously or for hire.
"Public use" is the same as "use by the public". The essential feature of the public
use is not confined to privileged individuals, but is open to the indefinite public. It is
this indefinite or unrestricted quality that gives it its public character. The question must
be determined by the character of the business actually carried on by the carrier, not by
any secret intention or mental reservation it may entertain or assert when charged with
the duties and obligations that the law imposes.
Applying these considerations to the case before us, there is no question that the
Pereas as the operators of a school bus service were:
1) engaged in transporting passengers generally as a business, not just as
a casual occupation;
2) undertaking to carry passengers over established roads by the method
by which the business was conducted;
3) transporting students for a fee.
Despite catering to a limited clientle, 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.