US Vs. Tan Piaco et.

al GR No 15122 March 10, 1920

Facts:
 Tan Piaco rented two automobile trucks for purposes of carrying passengers and freight
under special contracts.
 Upon complaint, Tan Piaco et. al were charged with violation of the Public Utility Law,
that they were operating a public utility without permission from the Public Utility
Commissioner.
 After trial, the court ruled in favor of the defendants absolving them of the offense
charged for insufficient evidence except for Tan Piaco.
 For its part, the Attorney-General have not found anything in the evidence showing that
the appellant operated the trucks in question for public use.

Issue: Whether Tan Piaco is a public utility and thus subject to the control and regulation of the
commission?

Held: No.

The owner of an automobile truck who operates the same under a special contract for carrying
passengers and freight, in each case, and has not held himself out to carry all passengers and
freight for all persons who might offer, is not a public utility and is not criminally liable for his
failure to obtain a license from the Public Utility Commissioner. If the use is merely optional
with the owner, or .the public benefit is merely accidental, it is not a public use, authorizing the
exercise of the jurisdiction of the public utility commission. The true criterion by which to judge
of the character of the use is whether the public may enjoy it by right or only by permission.

'Public utility' refers to individual, co-partnership, association, corporation or joint stock

company, etc., etc., that may own, operate, manage, or control any common carrier, railroad,
street railway, etc., etc., engaged in the transportation of passengers, cargo, etc., etc., for public
use.

So long as the individual or copartnership, etc., etc., is engaged in a purely private enterprise,
without attempting to render service to all who may apply, he can in no sense be considered a
public utility, for public use.

"Public use" means the same as "use by the public." The essential feature of the public use is that
it is not confined to privileged individuals, but is open to the indefinite public.

Public use is not synonymous with public interest. The true criterion by which to judge of the
character of the use is whether the public may enjoy it by right or only by permission. 

Unitrans International v. Insurance Company of North America, G.R. No. 203865, March
13, 2019
Facts:

 SEACOL, a foreign company, received shipment of pieces of musical instruments from

the shipper for transportation to and delivery at the port of Manila.
 The shipment was insured with ICNA against all risk in favor of the consignee, San
Miguel.
 The shipment arrived at the Manila Port. The shipment was discharged from the vessel,
and was received by Unitrans, and upon stripping the contents thereof, it was found
that two of the cartons containing the musical instruments were in bad order condition.
 Unitrans then delivered the shipment to the consignee. After further inspection, it was
found out that musical instruments were damaged and could no longer be used for their
intended purpose, hence were declared a total loss.
 By reason of the payment of claims, ICNA was subrogated to consignee’s rights of
recovery against Unitrans.
 Unitrans refused to pay so ICNA filed a complaint for collection of sum of money against
Unitrans.
 In Unitrans defense, it denied being a ship agent of SEACOL and the vessel M/S
Buxcrown’s unknown owner or charter.
 According to Unitrans, BTI Logistics, a foreign freight forwarder, engaged its services as
delivery or receiving agent in connection to the subject shipment. As such agent,
Unitrans’ obligations were limited to receiving and handling the bill of lading sent to it
and the delivery to the consignee of the shipment in good condition, among others.
 RTC ruled in favor of the ICNA. Such ruling was affirmed by the CA.

Issue: Whether Unitrans shall be held liable for the damage musical instrument?

Held: Yes. The Court ruled that Unitrans, as a freight forwarding company is considered a
common carrier.

Emphasis was placed on the fact that Unitrans itself admitted, through its own witness and
general manager, Del Rosario, that in handling the subject shipment and making sure that it was
delivered to the consignee’s premises in good condition as the delivery/forwarding agent,
Unitrans was acting as a freight forwarding entity and an accredited non-vessel
operating common carrier.

Article 1735 of the Civil Code states that if the goods are lost, destroyed or
deteriorated, common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence as required in
Article 1733. In turn, Article 1733 states that common carriers, from the nature of their business
and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance
over the goods and for the safety of the passengers transported by them, according to all the
circumstances of each case.

Unitrans failed to discharge this burden. Hence, it cannot escape liability.

Unsworth Transport International (Philippines), Inc., vs. CA & Pioneer Insurance, G.R.
No. 166250 July 26, 2010

Facts:
 Shipper Sylvex Purchasing Corporation delivered to UTI a shipment of 27 drums of
various raw materials for pharmaceutical manufacturing.
 The subject shipment was insured with private respondent Pioneer Insurance and
Surety Corporation in favor of Unilab against all risks.
 A bill of lading was issued, the shipment was for delivery to petitioner in favor of the
consignee United Laboratories, Inc. (Unilab).
 The shipment arrived at Unilab’s warehouse and was immediately surveyed by an
independent surveyor, and found that some spillage and shortage. Consequently,
Unilab’s quality control representative rejected one paper bag containing dried yeast
and one steel drum containing Vitamin B Complex as unfit for the intended purpose.
 Unilab filed a formal claim for the damage against private respondent and UTI.
 UTI denied liability on the basis of the gate pass issued that the goods were in complete
and good condition; while private respondent paid the claimed amount.
 By virtue of the Loss and Subrogation Receipt issued by Unilab in favor of private
respondent, the latter filed a complaint for Damages against APL, UTI and petitioner
with the RTC of Makati.
 RTC ruled in favor of Pioneer Insurance. CA affirmed on appeal.

Issue:

(1) Whether UTI, as a freight forwarder, a common carrier?

(2) What is the extent of UTI’s liability?

Held:

(1) Yes.

The term “freight forwarder” refers to a firm holding itself out to the general public (other than
as a pipeline, rail, motor, or water carrier) to provide transportation of property for compensation
and, in the ordinary course of its business, (1) to assemble and consolidate, or to provide for
assembling and consolidating, shipments, and to perform or provide for break-bulk and
distribution operations of the shipments; (2) to assume responsibility for the transportation of
goods from the place of receipt to the place of destination; and (3) to use for any part of the
transportation a carrier subject to the federal law pertaining to common carriers.
A freight forwarder’s liability is limited to damages arising from its own negligence,
including negligence in choosing the carrier; however, where the forwarder contracts to
deliver goods to their destination instead of merely arranging for their transportation, it
becomes liable as a common carrier for loss or damage to goods. A freight forwarder
assumes the responsibility of a carrier, which actually executes the transport, even though
the forwarder does not carry the merchandise itself.

It is undisputed that UTI issued a bill of lading in favor of Unilab. Pursuant thereto, petitioner
undertook to transport, ship, and deliver the 27 drums of raw materials for pharmaceutical
manufacturing to the consignee.

A bill of lading is a written acknowledgement of the receipt of goods and an agreement to

transport and to deliver them at a specified place to a person named or on his or her order.25 It
operates both as a receipt and as a contract. It is a receipt for the goods shipped and a contract to
transport and deliver the same as therein stipulated. As a receipt, it recites the date and place of
shipment, describes the goods as to quantity, weight, dimensions, identification marks, condition,
quality, and value. As a contract, it names the contracting parties, which include the consignee;
fixes the route, destination, and freight rate or charges; and stipulates the rights and obligations
assumed by the parties.

Undoubtedly, UTI is liable as a common carrier. Common carriers, as a general rule, are
presumed to have been at fault or negligent if the goods they transported deteriorated or got lost
or destroyed. That is, unless they prove that they exercised extraordinary diligence in
transporting the goods. In order to avoid responsibility for any loss or damage, therefore, they
have the burden of proving that they observed such diligence. Mere proof of delivery of the
goods in good order to a common carrier and of their arrival in bad order at their destination
constitutes a prima facie case of fault or negligence against the carrier. If no adequate
explanation is given as to how the deterioration, loss, or destruction of the goods happened, the
transporter shall be held responsible.

Petitioner failed to rebut the prima facie presumption of negligence in the carriage of the subject
shipment.

(2) Petitioner’s liability should be limited to $500 per steel drum.

SC affirm the applicability of the Package Limitation Rule under the COGSA, contrary to the
RTC and the CA’s findings.
 It is to be noted that the Civil Code does not limit the liability of the common carrier to a fixed
amount per package.

In all matters not regulated by the Civil Code, the rights and obligations of common carriers are
governed by the Code of Commerce and special laws. Thus, the COGSA supplements the Civil
Code by establishing a provision limiting the carrier’s liability in the absence of a shipper’s
declaration of a higher value in the bill of lading.30 Section 4(5) of the COGSA provides:
“(5) Neither the carrier nor the ship shall in any event be or become liable for any loss or
damage to or in connection with the transportation of goods in an amount exceeding $500 per
package of lawful money of the United States, or in case of goods not shipped in packages, per
customary freight unit, or the equivalent of that sum in other currency, unless the nature and
value of such goods have been declared by the shipper before shipment and inserted in the
bill of lading. This declaration, if embodied in the bill of lading, shall be prima facie evidence,
but shall not be conclusive on the carrier.

In the present case, the shipper did not declare a higher valuation of the goods to be shipped.
Contrary to the CA’s conclusion, the insertion of the words “L/C No. LC No. 1-187-008394/NY
69867 covering shipment of raw materials for pharmaceutical Mfg. x x x” cannot be the basis of
petitioner’s liability.31 Furthermore, the insertion of an invoice number does not in itself
sufficiently and convincingly show that petitioner had knowledge of the value of the cargo.32

In this case, as there was only one drum lost, private respondent is entitled to receive only $500
as damages for the loss.

Regional Container Lines and EDSA Shipping Agency vs. Netherlands Insurance Co., G.R.
No. 168151 September 4, 2009

Facts:
 405 cartons of Epoxy Molding Compound were consigned to be shipped from Singapore
to Manila for Temic Philippines.
 U-Freight Singapore, a forwarding agent, contracted the services of Pacific Eagle Lines to
transport the said cargo.
 As the cargo was highly perishable, the inside of the refrigirated container had to be
kept at a temperature of 0º Celsius.
 Pacific Eagle then loaded the refrigerated container on board the M/V Piya Bhum, a
vessel owned by RCL. RCL duly issued its own Bill of Lading in favor of Pacific Eagle.
 To insure the cargo against loss and damage, it was insured by the Netherlands
Insurance.
 M/V Piya Bhum docked in Manila. After unloading the refrigerated container, it was
plugged to the power terminal of the pier to keep its temperature constant.
 The container was inspected and found that when the cargo had already been unloaded
from the ship—the temperature fluctuated with a reading of 33º Celsius.
 When Temic received the shipment. It found the cargo completely damaged. Temic filed
a claim for cargo loss against Netherlands Insurance.
 Seven months later, Netherlands Insurance filed a complaint for subrogation of
insurance settlement with the RTC against “the unknown owner of M/V Piya Bhum” and
TMS Ship Agencies (TMS), the latter thought to be the local agent of M/V Piya Bhum’s
unknown owner. Netherlands later impleaded EDSA Shipping, RCL, Eagle Liner Shipping
Agencies, U-Freight Singapore, and U-Ocean (Phils.), Inc. (U-Ocean), as additional
defendants.
 The defendants all disclaimed liability for the damage caused to the cargo.
  Specifically, RCL and EDSA Shipping denied negligence in the transport of the cargo; they
attributed any negligence that may have caused the loss of the shipment to their co-
defendants. They likewise asserted that no valid subrogation exists, as the payment
made by Netherlands Insurance to the consignee was invalid.  By way of affirmative
defenses, RCL and EDSA Shipping averred that the Netherlands Insurance has no cause
of action.
 The trial court ruled that while there was valid subrogation, the defendants could not be
held liable for the loss or damage, as their respective liabilities ended at the time of the
discharge of the cargo from the ship at the Port of Manila.
 On appeal, CA reversed the trial courts decision finding RCL and EDSA shipping to liable
as common carrier.

Issue: Whether the CA correctly held RCL and EDSA Shipping liable as common carriers under
the theory of presumption of negligence?

Held: Yes.

A common carrier is presumed to have been negligent if it fails to prove that it exercised
extraordinary vigilance over the goods it transported.8 When the goods shipped are either lost or
arrived in damaged condition, a presumption arises against the carrier of its failure to observe
that diligence, and there need not be an express finding of negligence to hold it liable.9
To overcome the presumption of negligence, the common carrier must establish by
adequate proof that it exercised extraordinary diligence over the goods. It must do more
than merely show that some other party could be responsible for the damage.

RCL and EDSA Shipping failed to prove that they did exercise that degree of diligence required
by law over the goods they transported. Indeed, there is sufficient evidence showing that the
fluctuation of the temperature in the refrigerated container van, as recorded in the temperature
chart, occurred after the cargo had been discharged from the vessel and was already under the
custody of the arrastre operator, ICTSI. This evidence, however, does not disprove that the
condenser fan—which caused the fluctuation of the temperature in the refrigerated container—
was not damaged while the cargo was being unloaded from the ship. It is settled in maritime law
jurisprudence that cargoes while being unloaded generally remain under the custody of the
carrier;11 RCL and EDSA Shipping failed to dispute this

Planters Products vs. CA et. al., GR No. 101503, September 15, 1993

Facts:

Planters Products, Inc. (PPI), purchased from Mitsubishi International Corporation

(MITSUBISHI) of New York, U.S.A., 9,329.7069 metric tons (M/T) of Urea 46% fertilizer
which the latter shipped in bulk aboard the cargo vessel M/V "Sun Plum" owned by private
respondent Kyosei Kisen Kabushiki Kaisha (KKKK) from Kenai, Alaska, U.S.A., to Poro Point,
San Fernando, La Union, Philippines, as evidenced by Bill of Lading.

Upon arrival of the vessel at the port of call. Petitioner unloaded the cargo from the holds into its
steelbodied dump trucks which were parked alongside the berth.

Each time a dump truck was filled up, its load of Urea was covered with tarpaulin before it was
transported to the consignee's warehouse located some fifty (50) meters from the wharf.

It took eleven (11) days for PPI to unload the cargo. Based on survey report, it revealed a
shortage in the cargo of and that a portion of which was contaminated with dirt and were
rendered unfit for commerce, having been polluted with sand, rust and 
dirt.

Consequently, PPI sent a claim letter to Soriamont Steamship Agencies (SSA), the resident agent
of the carrier, KKKK, for the cost of the alleged shortage in the goods shipped and the
diminution in value of that portion said to have been contaminated with dirt. 

PPI filed an action for damages with the Court of First Instance of Manila. The defendant carrier
argued that the strict public policy governing common carriers does not apply to them because
they have become private carriers by reason of the provisions of the charter-party.

CFI ruled in favor of PPI, but on appeal, private respondent prevailed and was absolved.

Issues: Whether a charter-party between a shipowner and a charterer transform a common

carrier into a private one as to negate the civil law presumption of negligence in case of loss or
damage to its cargo?

Held: No, a charter-party between a shipowner and a charterer does not transform a common
carrier into a private one as to negate the civil law presumption of negligence in case of loss or
damage to its cargo. However, in this case, private respondent adequately proved that it
exercised the required diligence in the vigilance over the cargo, as required by law.

Article 1734 of the New Civil Code provides that common carriers are not responsible for the
loss, destruction or deterioration of the goods if caused by the charterer of the goods or defects in
the packaging or in the containers. The Code of Commerce also provides that all losses and
deterioration which the goods may suffer during the transportation by reason of fortuitous
event,  force majeure, or the inherent defect of the goods, shall be for the account and risk of the
shipper, and that proof of these accidents is incumbent upon the carrier.  The carrier, nonetheless,
shall be liable for the loss and damage resulting from the preceding causes if it is proved, as
against him, that they arose through his negligence or by reason of his having failed to take the
precautions which usage has established among careful persons. 
Respondent carrier has sufficiently proved the inherent character of the goods which makes it
highly vulnerable to deterioration; as well as the inadequacy of its packaging which further
contributed to the loss. On the other hand, no proof was adduced by the petitioner showing that
the carrier was remise in the exercise of due diligence in order to minimize the loss or damage to
the goods it carried.

Phil. First Insurance vs. Wallem Phils. Shipping G.R. No. 165647, March 26, 2009

Facts:

Anhui Chemicals Import & Export Corporation loaded on board M/S Offshore Master a
shipment consisting of 10,000 bags of sodium sulphate, for delivery at the port of Manila for
L.G. Atkimson Import-Export, Inc. The Owner and/or Charterer of M/V Offshore Master is
unknown while the shipper of the shipment is Shanghai Fareast Ship Business Company. Both
are foreign firms doing business in the Philippines, thru its local ship agent, respondent Wallem
Philippines Shipping, Inc. (Wallem).

When the shipment arrived at the port of Manila, it was disclosed during the discharge of the
shipment from the carrier that 2,426 poly bags (bags) were in bad order and condition, having
sustained various degrees of spillages and losses. The bad state of the bags is also evinced by the
arrastre operator’s Request for Bad Order Survey.

Asia Star Freight Services, Inc. undertook the delivery of the shipment from the pier to the
consignee’s warehouse in Quezon City. During the unloading, it was found and noted that the
bags had been discharged in damaged and bad order condition. Upon inspection, it was
discovered that big part of the shipment had sustained unrecovered spillages, and others had been
exposed and contaminated, resulting in losses due to depreciation and downgrading.

Since the shipment was insured with petitioner Philippines First Insurance Co., Inc. against all
risks the consignee filed a formal claim with petitioner for the damage and losses sustained by
the shipment.

Petitioner, in the exercise of its right of subrogation, sent a demand letter to Wallem for the
recovery of the amount paid by petitioner to the consignee. However, despite receipt of the letter,
Wallem did not settle nor even send a response to petitioner’s claim.

Petitioner filed an action before the RTC for damages against respondents.

RTC ruled in favor of the petitioner. It attributed the damage and losses sustained by the
shipment to the arrastre operator’s mishandling in the discharge of the shipment. The RTC held
the shipping company and the arrastre operator solidarily liable since both the arrastre operator
and the carrier are charged with and obligated to deliver the goods in good order condition to the
consignee.

CA reversed the RTC’s decision saying that there is no solidary liability between the carrier and
the arrastre operator because it was clearly established by the court a quo that the damage and
losses of the shipment were attributed to the mishandling by the arrastre operator in the discharge
of the shipment.

Issue: Whether the arastre operator is solidary liable with the common carrier during unloading
of shipment?

Held: No.

The cargoes while being unloaded generally remain under the custody of the carrier. In the
instant case, the damage or losses were incurred during the discharge of the shipment while
under the supervision of the carrier.

Like the duty of seaworthiness, the duty of care of the cargo is non-delegable, and the carrier is
accordingly responsible for the acts of the master, the crew, the stevedore, and his other agents.

Sps. Perena vs. Sps. Zarate, National Railways & CA, G.R. No. 157917 August 29, 2012

Facts:

The Pereñas were engaged in the business of transporting students from their respective
residences in Parañaque City to Don Bosco in Pasong Tamo, Makati City, and back.

They employed Clemente Alfaro (Alfaro) as driver of the van.

The Zarates contracted the Pereñas to transport Aaron to and from Don Bosco.

On one faithful day, Alfaro while driving to school with Aaron, son of the Zarates, and some
other students, met an unfortunate event when their vehicle was hit by a train causing Aaron and
other students flew out of the van because of the impact.

Sadly, Aaron died (morbidly).

Devastated, the Zarates filed a complaint for damages against Alfaro, the Perenas, and PNR.
Perenas in their defense said that they exercised ordinary diligence in hiring Alfaro.

RTC ruled in favor of the Zarates and making the defendants jointly and severally liable to the
plaintiffs.

CA affirmed the RTC ruling.

Issue: Whether the Zarates, as school bus operator, a common carrier and hence obliged to
observed extraordinary diligence?

Held: Yes.

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.10 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.11 The
provisions on ordinary contracts of the Civil Code govern the contract of private carriage. The
diligence required of a private carrier is only ordinary, that is, the diligence of a good father of
the family. In contrast, a common carrier is a person, corporation, firm or association engaged in
the business of carrying or transporting passengers or goods or both, by land, water, or air, for
compensation,

offering such services to the public.12 Contracts of common carriage are governed by the
provisions on common carriers of the Civil Code, the Public Service Act,13and other special laws
relating to transportation. A common carrier is required to observe extraordinary diligence, and
is presumed to be at fault or to have acted negligently in case of the loss of the effects of
passengers, or the death or injuries to passengers.14 

Pereñas as the operators of a school bus service were: (a) engaged in transporting passengers
generally as a business, not just as a casual occupation; (b) undertaking to carry passengers over
established roads by the method by which the business was conducted; and (c) transporting
students for a fee. Despite catering to a limited clientèle, the Pereñas 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.

The common carrier’s standard of care and vigilance as to the safety of the passengers is defined
by law. Given the nature of the business and for reasons of public policy, the common carrier is
bound “to observe extraordinary diligence in the vigilance over the goods and for the safety of
the passengers transported by them, according to all the circumstances of each case.”22 Article
1755 of the Civil Codespecifies that the common carrier should “carry the passengers safely as
far as human care and foresight can provide,  using the utmost diligence of very cautious
persons, with a due regard for all the circumstances.” To successfully fend off liability in an
action upon the death or injury to a passenger, the common carrier must prove his or its
observance of that extraordinary diligence; otherwise, the legal presumption that he or it was at
fault or acted negligently would stand.23 No device, whether by stipulation, posting of notices,
statements on tickets, or otherwise, may dispense with or lessen the responsibility of the common
carrier as defined under Article 1755 of the Civil Code.24

According to Article 1759 of the Civil Code, their liability as a common carrier did not cease
upon proof that they exercised all the diligence of a good father of a family in the selection and
supervision of their employee. This was the reason why the RTC treated this defense of the
Pereñas as inappropriate in this action for breach of contract of carriage.

Manila Port Services vs. American Home Assurance , GR No. 201822, August 12, 2015

Facts:

Countercorp Trading shipped from Singapore to the Philippines 10 container vans of soft wheat
flour. The shipment was insured against all risks by AHAC and consigned to MSC Distributor
(MSC).

Upon arrival at the Manila Port, the shipment was discharged in good and complete order
condition and with safety seals in place to the custody of the arrastre operator, MPSI.

MSC’s representative, AD’s Customs Services (ACS), took out five container vans for delivery
to MSC. At the compound’s exit, MPSI issued to ACS the corresponding gate passes for the vans
indicating its turnover of the subject shipment to MSC. However, upon receipt of the container
vans at its warehouse, MSC discovered substantial shortages in the number of bags of flour
delivered. Hence, it filed a formal claim for loss with MPSI.

ACS took out the remaining five container vans from the container yard and delivered them to
MSC. Upon receipt, MSC once more discovered substantial shortages. Thus, MSC filed another
claim with MPSI.

MPSI denied both claims of MSC. MSC sought insurance indemnity for the lost cargoes from
AHAC. AHAC paid MSC. In turn, AHAC filed a Complaint for damages against MPSI before
the RTC.

RTC dismissed AHAC’s claim and ruled in favor of MPSI. On appeal, CA reversed the RTC’s
decision.

CA stressed that in a claim for loss filed by a consignee, the burden of proof to show due
compliance with the obligation to deliver the goods to the appropriate party devolves upon the
arrastre operator. Contrary to RTC’s ruling.

Issue: Whether MPSI is liable for the loss of the bags of flour?
Held: No.

The relationship between an arrastre operator and a consignee is similar to that between a
warehouseman and a depositor, or to that between a common carrier and the consignee and/or
the owner of the shipped goods.18 Thus, an arrastre operator should adhere to the same degree of
diligence as that legally expected of a warehouseman or a common carrier19 as set forth in
Section 3[b] of the Warehouse Receipts [Act]20 and Article 1733 of the Civil Code.21 As
custodian of the shipment discharged from the vessel, the arrastre operator must take good care
of the same and turn it over to the party entitled to its possession.

In case of claim for loss filed by a consignee or the insurer as subrogee,23 it is the arrastre
operator that carries the burden of proving compliance with the obligation to deliver the goods to
the appropriate party.24 It must show that the losses were not due to its negligence or that of its
employees.25 It must establish that it observed the required diligence in handling the
shipment.26 Otherwise, it shall be presumed that the loss was due to its fault.27 In the same
manner, an arrastre operator shall be liable for damages if the seal and lock of the goods
deposited and delivered to it as closed and sealed, be broken through its fault.28 Such fault on the
part of the arrastre operator is likewise presumed unless there is proof to the contrary.

MPSI sufficiently overcome the presumption of negligence because of the gate passes. the
signature of the consignee’s representative on the gate pass is evidence of receipt of the shipment
in good order and condition.

Cangco vs. MRC, GR No. L128191, October 14, 1918

Facts: Jose Cangco arose from his seat in the 2nd class-car where he was riding and, making, his
exit through the door, took his position upon the steps of the coach, seizing the upright guardrail
with his right hand for support

As the train slowed down another passenger and also an employee of the railroad
company Emilio Zuñiga got off the same car alighting safely at the point where the platform
begins to rise from the level of the ground.

When the train had proceeded a little farther Cangco stepped off but 1 or both of his feet came in
contact with a sack of watermelons so his feet slipped from under him and he fell violently on
the platform. 

His body rolled from the platform and was drawn under the moving car, where his right arm was
badly crushed and lacerated. 

the car moved forward possibly 6 meters before it came to a full stop
He was bought to the hospital in the city of Manila where an examination was made and his arm
was amputated.

CFI: favored Manila Railroad Co. (MRR)- Cangco had failed to use due caution in alighting
from the coach and was therefore precluded form recovering

ISSUE: Whether Canco was negligent in alighting from moving train? (NO)

1. CARRIERS; PASSENGERS; NEGLIGENCE; ALIGHTING FROM MOVING TRAIN.—It is not

negligence per se for a traveler to alight from a slowly moving train.

HELD: No.

The contract of defendant to transport plaintiff carried with it, by implication, the duty to carry him in safety and
to provide safe means of entering and leaving its trains (Civil Code, article 1258). That duty, being contractual, was
direct and immediate, and its non-performance could not be excused by proof that the fault was morally imputable to
defendant's servants.
The railroad company's defense involves the assumption that even granting that the negligent conduct of its
servants in placing an obstruction upon the platform was a -breach of its contractual obligation to maintain safe
means of approaching and leaving its trains, the direct and proximate cause of the injury suffered by plaintiff was his
own contributory negligence in failing to wait until the train had come to a complete stop before alighting. Under the
doctrine of comparative negligence announced in the Rakes case (supra), if the accident was caused by plaintiff's
own negligence, no liability is imposed upon defendant, whereas if the accident was caused by defendant's
negligence and plaintiff's negligence merely contributed to his injury, the damages should be apportioned. It is,
therefore, important to ascertain if defendant was in fact guilty of negligence.
It may be admitted that had plaintiff waited until the train had come to a full stop before alighting, the particular
injury suffered by him could not have occurred. Defendant contends, and cites many authorities in support of the
contention, that it is negligence per se for a passenger to alight from a moving train.

where the company has kept its platform free from dangerous obstructions. There is no reason to believe that
plaintiff would have suffered any injury whatever in alighting as he did had it not been for defendant's negligent
failure to perform its duty to provide a safe alighting place.

"The test by which to determine whether the passenger has been guilty of negligence in attempting to alight from
a moving railway train, is that of ordinary or reasonable care. It is to be considered whether an ordinarily prudent
person, of the age, sex and condition of the passenger, would have acted as the passenger acted under the
circumstances disclosed by the evidence. This care has been defined to be, not the care which may or should be used
by the prudent man generally, but the care which a man of ordinary prudence would use under similar
circumstances, to avoid injury." (Thompson, Commentaries on Negligence, vol. 3, sec. 3010.)

Designer Basket vs.Air Sea Transport Inc.& Asia Cargo Containers, GR 184513, March 9,
2016
Facts:

DBI is a domestic corporation engaged in the production of housewares and handicrafts

items for export. Ambiente, a foreign based company ordered from DBI 223 cartons of
assorted wooden items. Ambiente designated Asia Cargo Container Lines, Inc. (ACCLI)
to ship out its order from the Philippines to United States. ACCLI is a domestic
corporation acting as an agent of Air Sea Transport, Inc. (ASTI), a US based
corporation engaged in carrier transport business in the Philippines. DBI delivered the
shipment to ACCLI to transport from Manila to Ambiente.

To acknowledge receipt and to serve as the contract of sea carriage, ACCLI issued to
BPI triplicate copies of Bill of Lading of ASTI. DBI retained possession of the originals of
the bills pending the payment of the goods by Ambiente.

The bill of lading does not contain a provision requiring the carrier to release or deliver
the shipment to the consignee only upon the surrender of the original bill of lading.

Meanwhile, Ambiente and ASTI entered into an Indemnity Agreement where the former
obligated the latter to deliver the shipment without the surrender of the bill of lading and
in return the buyer agreed to indemnify the carrier free from any liability as a result of
the release of the shipment.

DBI made several demands to Ambiente for the payment of the shipment, but failed to
pay DBI. Consequently, the latter filed a complaint against ASTI, ACCLI, Ambiente and
ACCLFs incorporators-stockholders for the payment of the shipment.

ISSUE:

Whether or not the common carrier is liable on the release of the goods to a consignee
even without the surrender of the bill of lading?

HELD:

No. A common carrier may release the goods to the consignee even without the
surrender of the bill of lading.

Although the general rule is that upon receipt of the goods, the consignee surrenders
the bill of lading, Article 353 of the Code of Commerce provides two exceptions: When
the bill of lading gets lost or for other cause. In either case, the consignee must provide
a receipt to the carrier for the goods delivered.

The DBI’s retention of the bill coupled with the indemnity agreement entered into by the
buyer and the carrier resulted in substantial compliance with Article 353 of the Code of
Commerce.
The Supreme Court further held that Art. 1733, 1734 & 1735 of the NCC, which speaks
of the carrier’s liability for the loss, destruction, or deterioration of the goods and the
presumption of negligence do not apply.

The responsibility of the carrier under these provisions lasts from the time the goods are
unconditionally placed in possession of, and received by the carrier for transportation,
until the goods are delivered by the carrier to the consignee.

In this case it is undisputed that the goods were timely delivered to the proper
consignee.

Finally, the SC said that the carrier cannot be held liable for the unpaid value of the
goods, as it is not a party to the contract of sale. Hence, ASTI and its agent ACCLI were
not liable to DBI. Only Ambiente, as the buyer of the goods, has the obligation to pay
the value of shipment. Parties: Designer Baskets, Inc. (DBI) – Seller/ Petitioner
Ambiente- Buyer/ Respondent Air Sea Transport, Inc. (ASTI) – Common
carrier/Respondent Asia Cargo Container Lines, Inc. (ACCLI) – Agent of ASTI/
Respondent Cause of action: The payment of the value of the goods and for the release
of goods without the surrender of the bill of lading RTC ruling: The trial court found
ASTI, ACCLI, and Ambiente solidarily liable to DBI for the value of the shipment.
Rationale: The liability of Ambiente, as a buyer, it has an obligation to pay for the value
of the shipment because it is a contract of sale which had been perfected by the
delivery. With respect to ASTI, as a common carrier, it is bound to observe
extraordinary diligence in the vigilance of the goods yet was remiss in its duty when it
allowed the release of the shipment to Ambiente.

ACCLI, as the agent of ASTI, was well aware that the goods cannot be delivered to the
defendant Ambiente since DBI retained possession of the originals of the bill of lading.
As regards ACCLFs incorporators-stockholders, they were absolved from liability Who
appealed the case: DBI, ASTI, and ACCLI appealed to the CA CA ruling: Affirmed the
finding of the trial court with modifications. Ambiente is liable to DBI but absolved ASTI
and ACCLI from liability. Rationale: As for ASTI, its only obligation as a common carrier
was to deliver the shipment in good condition. It did not include ascertaining the
payment of the goods. The fact that ASTI is given the option to simply require a receipt
for the goods delivered suggests that the surrender of the bill of lading may be
dispensed with when it cannot be produced by the consignee for whatever cause. An
agency between ASTI and ACCLI was established, hence, the latter as a mere agent is
not liable. No evidence presented that the agent exceeded its authority.

SC ruling: Affirmed the ruling of the CA. Rationale: It is clear that the moment the carrier
has delivered the subject goods, its responsibility ceases to exist and it is therefore
freed from all the liabilities arising from the transaction. Any question regarding the
payment of the buyer to the seller is no longer the concern of the carrier. The contract
between DBI and ASTI is a contract of carriage of goods. Hence, not being a party to
the contract of sale between DBI
and Ambiente, ASTI cannot be held liable for the payment of the shipment. Only
Ambiente is liable to pay for the value of the shipment.

Doctrine/ Applicable provision: Article 353 of the Code of Commerce “After the contract
has been complied with, the bill of lading which the carrier has issued shall be returned
to him, and by virtue of the exchange of this title with the thing transported, the
respective obligations shall be considered cancelled xxx In case the consignee, upon
receiving the goods, cannot return the bill of lading subscribed by the carrier because of
its loss or of any other cause, he must give the latter a receipt for the goods delivered,
this receipt producing the same effects as the return of the bill of lading. Simply put, the
surrender of the bill of lading is not an absolute and mandatory requirement for the
release of the goods to the consignee. Definition of Bill of Lading: A written
acknowledgment of the receipt of goods and an agreement to transport and to deliver
them at a specified place to a person named or on his order.