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DE GUZMAN vs.

COURT OF APPEALS Facts: Respondent Ernesto Cendaa is a junk dealer who was engaged in buying up used bottles and scrap metal in Pangasinan. Upon gathering sufficient quantities of such scrap material, respondent would bring such material to Manila for resale. He utilized two six-wheeler trucks which he owned for hauling the material to Manila. On the return trip to Pangasinan, respondent would load his vehicles with cargo which various merchants wanted delivered to different establishments in Pangasinan. For that service, respondent charged freight rates which were commonly lower than regular commercial rates. Petitioner Pedro de Guzman a merchant and authorized dealer of General Milk Company (Philippines), Inc. in Urdaneta, Pangasinan, contracted with respondent for the hauling of 750 cartons of Liberty filled milk from its warehouse in Makati to petitioner's establishment in Urdaneta. 150 cartons were loaded on a truck driven by respondent, while 600 cartons were placed on board the other truck which was driven by Manuel Estrada, respondent's driver and employee. Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes never reached petitioner, since the truck which carried these boxes was hijacked somewhere along the MacArthur Highway in Paniqui, Tarlac, by armed men who took with them the truck, its driver, his helper and the cargo. Petitioner commenced action against private respondent demanding payment of P22,150.00, the claimed value of the lost merchandise, plus damages and attorney's fees. Petitioner argued that private respondent, being a common carrier, and having failed to exercise the extraordinary diligence required of him by the law, should be held liable for the value of the undelivered goods. Private respondent denied that he was a common carrier and argued that he could not be held responsible for the value of the lost goods, such loss having been due to force majeure. The RTC ruled that private respondent was a common carrier. CA reversed the decision and held that respondent had been engaged in transporting return loads of freight "as a casual occupation, a sideline to his scrap iron business. Issue: 1. Whether or not respondent is a common carrier. 2. Whether or not respondent is liable. Held: 1. Yes. Article 1732 makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity (in local Idiom as "a sideline"). Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the general community or population, and one who offers services or solicits business only from a narrow segment of the general population. The Court of Appeals referred to the fact that private respondent held no certificate of public convenience. A certificate of public convenience is not a requisite for the incurring of liability. That liability arises the moment a person or firm acts as a common carrier, without regard to whether or not such carrier has also complied with the requirements of the applicable regulatory statute and implementing regulations and has been granted a certificate of public convenience or other franchise. To exempt private respondent from the liabilities of a common carrier because he has not secured the necessary certificate of public convenience, would be offensive to sound public policy; that would be to reward private respondent precisely for failing to comply with applicable statutory requirements. 2. No. Article 1734 establishes the general rule that common carriers are responsible for the loss, destruction or deterioration of the goods which they carry, "unless the same is due to any of the following causes only: (1) Flood, storm, earthquake, lightning or other natural disaster or calamity; (2) Act of the public enemy in war, whether international or civil; (3) Act or omission of the shipper or owner of the goods; (4) The character-of the goods or defects in the packing or-in the containers; and (5) Order or act of competent public authority. Article 1735 also provides as follows: In all cases other than those mentioned in numbers 1, 2, 3, 4 and 5 of the preceding article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in Article 1733. The hijacking of the carrier's truck does not fall within any of the five categories of exempting causes listed in Article 1734. It would follow, therefore, that the hijacking of the carrier's vehicle must be dealt with under the provisions of Article 1735, in other words, that the private respondent as common carrier is presumed to have been at fault or to have acted negligently. This presumption, however, may be overthrown by proof of extraordinary diligence on the part of private respondent. Petitioner argues that in the circumstances of this case, private respondent should have hired a security guard presumably to ride with the truck carrying the 600 cartons of Liberty filled milk. We do not believe, however, that in the instant case, the standard of extraordinary diligence required private respondent to retain a security guard to ride with the truck and to engage brigands in a firelight at the risk of his own life and the lives of the driver and his helper. Article 1745 provides in relevant part: Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy: (6) that the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violence or force, is dispensed with or diminished. In the instant case, armed men held up the second truck owned by private respondent which carried petitioner's cargo. Accused acted with grave, if not irresistible, threat, violence or force. In these circumstances, we hold that the occurrence of the loss must reasonably be regarded as quite beyond the control of the common carrier and properly regarded as a fortuitous event. It is necessary to recall that even common carriers are not made absolute insurers against all risks of travel and of transport of goods, and are not held liable for acts or events which cannot be foreseen or are inevitable, provided that they shall have complied with the rigorous standard of extraordinary diligence.

F.C. FISHER vs.YANGCO STEAMSHIP COMPANY Facts: The board of Yangco Steamship Co. adopted a resolution which was ratified by the stockholders declaring classes of merchandise which are not to be carried by the vessels of the company and prohibiting the employees to carry dynamite, powder or other explosives. The Collector of Customs suspended the issuance of clearances for the vessels unless they carry the explosives. Fisher, a stockholder of YSC, filed a petition for prohibition. Issue: Whether or not the refusal of the board of YFC to accept for carriage "dynamite, powder or other explosives" from any and all shippers who may offer such explosives for carriage can be held to be a lawful act. Held: No. In construing Act 98 for the alleged violation, the test is whether the refusal of YSC to carry the explosives without qualification or conditions may have the effect of subjecting any person or locality or the traffic is such explosives to an unduly unreasonable or unnecessary prejudice or discrimination. Common carriers in this jurisdiction cannot lawfully decline to accept a particular class of goods unless it appears that for some sufficient reason the discrimination for such is reasonable and necessary. YSC has not met those conditions. The nature of the business of a common carrier as a public employment is such that it is within the power of the State to impose such just regulations in the interest of the public as the legislator may deem proper. FIRST PHILIPPINE INDUSTRIAL CORPORATION vs. COURT OF APPEALS Facts: Petitioner is a grantee of a pipeline concession under RA 387 to contract, install and operate oil pipelines. The first pipeline concession was granted in 1967 and was renewed by the ERB in 1992. In 1995, petitioner applied for a Mayors permit in Batangas City. Respondent treasurer required petitioner to pay a local tax based on its gross receipts for the fiscal year in 1993 pursuant to the Local Government Code. To avoid hampering its operations, petitioner paid the amount of tax for the first quarter under protest. Petitioner argued that as a pipeline operator with a government concession engaged in transporting petroleum products via pipeline it is exempted from payment of tax based on gross receipts. Respondent refused to make reimbursement on the ground that petitioner is not a common carrier engaged in transportation business by land, water or air. Issue: Whether or not petitioner is liable to pay a local tax based on gross receipts since it is not a common carrier. Held: No. Based on Article 1732 NCC, there is no doubt that petitioner is a common carrier. It 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. (De Guzman Ruling upheld) Respondents argument that the term common carrier as used in Section 133(j) of the Local Government Code refers only to common carriers transporting goods and passengers through moving vehicles or vessels either by land, sea or water is erroneous. The definition of common carriers in NCC makes no distinction as to the means of transporting as long as it is by land, water or air. It does not provide that the transporting of the passengers or goods should be by motor vehicle. It is clear that the legislative intent in excluding from the taxing power of the local government unit the imposition of business tax against common carriers is to prevent a duplication of the so-called "common carrier's tax." Petitioner is already paying 3% common carrier's tax on its gross sales/earnings under the National Internal Revenue Code. To tax petitioner again on its gross receipts in its transportation of petroleum business would defeat the purpose of the Local Government Code.

NATIONAL STEEL CORPORATION vs. COURT OF APPEALS Facts: On July 17, 1974, plaintiff NSC as charterer and defendant VSI as owner, entered into a Contract of Voyage Charter Hire whereby NSC hired VSIs vessel, the MV VLASONS I to make one voyage to load steel products at Iligan City and discharge them at North Harbor Manila. When the vessels 3 hatches containing the shipment were opened by plaintiffs agents, nearly all the skids of tinplates and hot rolled sheets were allegedly found to be wet and rusty. The cargo was discharged and unloaded by stevedores hired by the plaintiff. Plaintiff filed with the defendant its claim for damages suffered due to the downgrading of the damaged tinplates in the amount of P941,145.18 but defendant refused and failed to pay. RTC ruled against the plaintiff, stating that the vessel was seaworthy and that there is no proof of willful negligence of the vessel's officers. This was affirmed by CA but modified the award of damages, hence the appeal. Issue: W/N VSI contracted with NSC as a common carrier or as a private carrier. Held: It is a private carrier. In the instant case, it is undisputed that VSI did not offer its services to the general public. It carried passengers or goods only for those it chose under a special contract of charter party. It is a private carrier that renders tramping service and as such, does not transport cargo or shipment for the general public. Its services are available only to specific persons who enter into a special contract of charter party with its owner. Consequently, the rights and obligations of VSI and NSC, including their respective liability for damage to the cargo, are determined primarily by stipulations in their contracts of private carriage or charter party. Unlike in a contract involving a common carrier, private carriage does not involve the general public. Hence, the stringent provisions of the Civil Code on common carriers protecting the general public cannot justifiably be applied to a ship transporting commercial goods as a private carrier. It is clear from the parties Contract of Voyage Charter Hire, that VSI shall not be responsible for losses except on proven wilful negligence of the officers of the vessel. The NANYOZAI Charter Party(an internationally recognized Charter Party Agreement), which was incorporated in the parties contract of transportation, further provided that the shipowner shall not be liable for loss of or damage to the cargo arising or resulting from unseaworthiness, unless the same was caused by its lack of due diligence to make the vessel seaworthy or to ensure that the same was properly manned, equipped and supplied. In view of the above, NSC must prove that the damage to its shipment was caused by VSIs wilful negligence or failure to exercise due diligence in making MV Vlasons I seaworthy and fit for holding, carrying and safekeeping the cargo. Ineluctably, the burden of proof was placed on NSC by the parties agreement. The CA decision, affirming the RTC decision in favor of defendant and dismissing the complaint is Affirmed.

KMU vs. GARCIA Facts: The following memoranda, circulars and/or orders are sought to be nullified by the instant petition, viz: (a) DOTC Memorandum Order 90-395, dated June 26, 1990 relative to the implementation of a fare range scheme for provincial bus services in the country, allowing provincial bus operators to charge passengers rates within a range of 15% above and 15% below the LTFRB official rate for a period of one year. LTFRB Chairman, Fernando, finding the MO not legally feasible submitted a memorandum to DOTC Secretary Orbos as it contravenes the Public Service Act for the following reasons: i. the rates to be approved should be proposed by public service operators ii. there should be a publication and notice to concerned or affected parties in the territory affected iii. a public hearing should be held for the fixing of the rates The chairman added that to allow bus operators to charge fares 15% above the present LTFRB fares in the wake of the devastation, death and suffering caused by the July 16 earthquake will not be socially warranted and will be politically unsound. Provincial Bus Operators Association of the Philippines, Inc. (PBOAP) filed an application for an across-the-board fare increase of P0.085 per kilometer. It was opposed by Philippine Consumers Foundation, Inc. and Perla C. Bautista alleging that the proposed rates were exorbitant and unreasonable. The said increase was granted by LTFRB. (b) DOTC Department Order No.92-587, dated March 30, 1992, defining the policy framework on the regulation of transport services; Among the salient provisions of which include: In determining public need, the presumption of need for a service shall be de emed in favor of the applicant. The burden of proving that there is no need for a proposed service shall be with the oppositor(s). (c) DOTC Memorandum dated October 8, 1992, laying down rules and procedures to implement Department Order No. 92-587; (d) LTFRB Memorandum Circular No. 92-009, providing implementing guidelines on the DOTC Department Order No. 92-587; and (e) LTFRB Order dated March 24, 1994 in Case No. 94-3112. Sometime in March, 1994, private respondent PBOAP, availing itself of the deregulation policy of the DOTC allowing provincial bus operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for the purpose and without the benefit of a public hearing, announced a fare increase of 20% percent of the existing fares. Petitioner KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares. LTFRB dismissed the petition hence the present one. Issue: Whether or not the assailed orders/circulars are valid. Held: While the authority of the DOTC and the LTFRB to issue administrative orders to regulate the transport sector is recognized, the Court found that they committed grave abuse of discretion in issuing DOTC Department Order No. 92-587 and LTFRB Memorandum Circular No. 92-009 promulgating the implementing guidelines on DOTC Department Order No. 92-587, the said administrative issuances being amendatory and violative of the Public Service Act and the Rules of Court. Fare Range Scheme: The 20% fare increase imposed by PBOAP without the benefit of a petition and a public hearing is null and void and of no force and effect. Presumed Public Need: A CPC is an authorization granted by the LTFRB for the operation of land transportation services for public use as required by law. Pursuant to Section 16(a) of the Public Service Act, as amended, the following requirements must be met before a CPC may be granted, to wit: (i) the applicant must be a citizen of the Philippines, or a corporation or co-partnership, association or joint-stock company constituted and organized under the laws of the Philippines, at least 60 % of its stock or paid-up capital must belong entirely to citizens of the Philippines; (ii) the applicant must be financially capable of undertaking the proposed service and meeting the responsibilities incident to its operation; and (iii) the applicant must prove that the operation of the public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner. It is understood that there must be proper notice and hearing before the PSC can exercise its power to issue a CPC. While adopting the foregoing requisites for the issuance of a CPC, LTFRB Memorandum Circular No. 92-009, Part IV, provides for yet incongruous and contradictory policy guideline on the issuance of a CPC. The guidelines states: The issuance of a Certificate of Public Convenience is determined by public need. The presumption of public need for a servi ce shall be deemed in favor of the applicant, while the burden of proving that there is no need for the proposed service shall be the oppositor's. By its terms, public convenience or necessity generally means something fitting or suited to the public need. As one of the basic requirements for the grant of a CPC, public convenience and necessity exists when the proposed facility or service meets a reasonable want of the public and supply a need which the existing facilities do not adequately supply. The existence or non-existence of public convenience and necessity is therefore a question of fact that must be established by evidence, real and/or testimonial; empirical data; statistics and such other means necessary, in a public hearing conducted for that purpose. The object and purpose of such procedure, among other things, is to look out for, and protect, the interests of both the public and the existing transport operators. No grave abuse of discretion however was committed in the issuance of DOTC Memorandum Order No. 90-395 and DOTC Memorandum dated October 8, 1992, the same being merely internal communications between administrative officers.

TATAD vs. GARCIA Facts: DOTC planned to construct a light railway transit line along EDSA referred to as EDSA Light Rail Transit III (EDSA LRT III). Then President Aquino, signed into law the Build-Operate-Transfer (BOT) Law. After prequalifying the bidders for the construction of the said transit, it was found that out of all the applicants, only the EDSA LRT Consortium met the requirements. DOTC and respondent EDSA LRT Corporation, Ltd. (a private corporation organized under the laws of HongKong) in substitution of the EDSA LRT Consortium, entered into an "Agreement to Build, Lease and Transfer a Light Rail Transit System for EDSA" under the terms of the BOT Law. DOTC sought the approval of the President but the same was denied. Thus, DOTC, represented by Secretary Garcia, and private respondent entered into a supplemental agreementRevised and Restated Agreement to Build, Lease and Transfer a Light Rail Transit System for EDSA" so as to clarify their respective rights and responsibilities and to submit Supplemental Agreement to the President. Petitioners, in their capacity as Senators and taxpayers, question the constitutionality of the two agreements between DOTC and private respondent. They contend that it grants EDSA LRT Corp., Ltd., a foreign corporation, the ownership of EDSA LRT III which is a public utility. Secretary Garcia and private respondent on the other hand, contend that the nationality requirement for public utilities mandated by the Constitution does not apply to private respondent. Issue: Does the fact that EDSA LRT Corporation, Ltd., a foreign corporation, own the facilities and equipment of the LRT III mean it also own the LRT III as a public utility? Held: No. What private respondent owns are the rail tracks, rolling stocks like the coaches, rail stations, terminals and the power plant, not a public utility. While a franchise is needed to operate these facilities to serve the public, they do not by themselves constitute a public utility. As ruled in Iloilo Ice & Cold Storage Co. v. Public Service Board, what constitutes a public utility is not their ownership but their use to serve the public. In law, there is a clear distinction between the "operation" of a public utility and the ownership of the facilities and equipment used to serve the public. The right to operate a public utility may exist independently and separately from the ownership of the facilities thereof. One can own said facilities without operating them as a public utility, or conversely, one may operate a public utility without owning the facilities used to serve the public. The devotion of property to serve the public may be done by the owner or by the person in control thereof who may not necessarily be the owner thereof. In the case at bar, private respondent and DOTC agreed that on completion date, private respondent will immediately deliver possession of the LRT system by way of lease for 25 years, during which period DOTC shall operate the same as a common carrier and private respondent shall provide technical maintenance and repair services to DOTC. Clearly, private respondent will not run the light rail vehicles and collect fees from the riding public. It will have no dealings with the public and the public will have no right to demand any services from it. It is DOTC which shall operate the EDSA LRT III. Therefore, private respondent, EDSA LRT Corp., Ltd. does not own EDSA LRT III as a public utility.

EASTERN SHIPPING LINES, INC. vs. INTERMEDIATE APPELLATE COURT Facts: In G.R. No. 69044, sometime in or prior to June, 1977, the M/S ASIATICA, a vessel operated by petitioner loaded at Kobe, Japan for transportation to Manila, 5,000 pieces of calorized lance pipes consigned to Philippine Blooming Mills Co., Inc., and 7 cases of spare parts valued consigned to Central Textile Mills, Inc. Both sets of goods were insured against marine risk for with respondent. In G.R. No. 71478, during the same period, the same vessel took on board 128 cartons of garment fabrics and accessories consigned to Mariveles Apparel Corporation, and two cases of surveying instruments consigned to Aman Enterprises and General Merchandise. The 128 cartons were insured for their stated value by respondent Nisshin and the 2 cases by respondent Dowa. Enroute for Kobe, Japan, to Manila, the vessel caught fire and sank, resulting in the total loss of ship and cargo. The respective respondent Insurers paid the corresponding marine insurance values to the consignees concerned and were thus subrogated unto the rights of the latter as the insured. Respondents filed a claim for reimbursement from petitioner. The RTC ruled in their favor to which the petitioner appealed. Issue: (1) Which law should govern the Civil Code provisions on Common carriers or the Carriage of Goods by Sea Act? and (2) who has the burden of proof to show negligence of the carrier? Held: (1) The law of the country to which the goods are to be transported governs the liability of the common carrier in case of their loss, destruction or deterioration. As the cargoes in question were transported from Japan to the Philippines, the liability of Petitioner Carrier is governed primarily by the Civil Code. However, in all matters not regulated by said Code, the rights and obligations of common carrier shall be governed by the Code of Commerce and by special laws. Thus, the Carriage of Goods by Sea Act, a special law, is suppletory to the provisions of the Civil Code. (2) Under the Civil Code, common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over goods, according to all the circumstances of each case. Common carriers are responsible for the loss, destruction, or deterioration of the goods unless the same is due to any of the following causes only: (1) Flood, storm, earthquake, lightning or other natural disaster or calamity; Petitioner Carrier claims that the loss of the vessel by fire exempts it from liability under the phrase "natural disaster or calamity. However, the Court said that fire may not be considered a natural disaster or calamity. This must be so as it arises almost invariably from some act of man or by human means. It does not fall within the category of an act of God unless caused by lightning or by other natural disaster or calamity. It may even be caused by the actual fault or privity of the carrier. As the peril of the fire is not comprehended within the exception in Article 1734, supra, Article 1735 of the Civil Code provides that all cases than those mention in Article 1734, the common carrier shall be presumed to have been at fault or to have acted negligently, unless it proves that it has observed the extraordinary diligence required by law. In this case, the respective Insurers. as subrogees of the cargo shippers, have proven that the transported goods have been lost. Petitioner Carrier has also proved that the loss was caused by fire. The burden then is upon Petitioner Carrier to proved that it has exercised the extraordinary diligence required by law, which it failed to do. And even if fire were to be considered a "natural disaster" within the meaning of Article 1734 of the Civil Code, it is required under Article 1739 of the same Code that the "natural disaster" must have been the "proximate and only cause of the loss," and that the carrier has "exercised due diligence to prevent or minimize the loss before, during or after the occurrence of the disaster. This Petiti oner Carrier has also failed to establish satisfactorily. Nor may Petitioner Carrier seek refuge from liability under the Carriage of Goods by Sea Act, It is provided therein that: Sec. 4(2). Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from (b) Fire, unless caused by the actual fault or privity of the carrier. Both the Trial Court and the Appellate Court, in effect, found, as a fact, that there was "actual fault" of the carrier shown by "lack of diligence" in that when the smoke was noticed, the fire was already big; that the fire must have started 24 hours before the same was noticed; and that after the cargoes were stored in the hatches, no regular inspection was made as to their condition during the voyage. The foregoing suffices to show that the circumstances under which the fire originated and spread are such as to show that Petitioner Carrier or its servants were negligent in connection therewith. Consequently, the complete defense afforded by the COGSA when loss results from fire is unavailing to Petitioner Carrier.

GELISAN vs. ALDAY Facts: Bienvenido Gelisan is the owner of a freight truck. Defendant Bienveido Gelisan and Roberto Roberto entered into a contact underwhich Espiritu hired the same freight truck of Gelisan for the purpose of hauling rice, sugar, flour and fertilizer. It also agreed that Espiritu shall bear and pay all losses and damages attending the carriage of the goods to be hauled by him. Benito Alday, a trucking operator had known Roberto Espiritu. Alday had a contact to haul the fertilizer of the Atlas Fertilizer Corporation from Pier 4, North Harbor, to its Warehouse in Mandaluyong. Alday met Espiritu at the gate of Pier 4 and the latter offered the use of his truck with the driver and helper. The offer was accepted by Alday and he instructed his checker to let Roberto Espiritu haul the fertilizer. Espiritu made two hauls of zoobags of fertilizer per trip. The fertilizer was delivered to the driver and helper of Espiritu with the necessary waybill receipts. Espiritu, however, did not deliver the fertilizer to the Atlas Fertilizer bodega at Mandaluyong. Thus, Benito Alday was compelled to pay the value of the 400 bags of fertilizers to Atlas Fertilizer Corporation and filed a compliant against Roberto Espiritu and Bienvenido Gelisan with the CFI of Manila. The CFI of Manila ruled that Roberto Espiritu was the only one liable. On appeal, CA ruled that Bienvenido Gelisan is likewise liable for being the registered owner of the truck. Issue: Whether or not Gelisan should be held solidarily liable with Espiritu, being the registered owner of the truck. Held: Yes, Gelisan should be held solidarily liable with Espiritu, being the registered owner of the truck. The Court has invariably held in several decisions that the registered owner of a public service vehicle is responsible for damages that may arise from consequences incident to its operation or that may be caused to any of the passengers therein. The claim of the petitioner that he is not liable in view of the lease contract executed by and between him and Roberto Espiritu which exempts him from liability to third persons, cannot be sustained because it appears that the lease contract, adverted to, had not been approved by the Public service Commission. It is settled in our jurisprudence that if the property covered by a franchise is transferred or leased to another without obtaining the requisite approval, the transfer is not binding upon the public or third persons. However, Gelisan is not without recourse because he has a right to be indemnified by Roberto Espiritu for the amount that he may be required to pay as damages for the injury caused to Benito Alday, since the lease contract in question, although not effective against the public for not having been approved by the Public Service Commission, is valid and binding between the contracting parties. The Court ruled that the petitioner is DENIED. With costs against the petitioner. BENEDICTO vs. IAC Facts: Private respondent Greenhills Wood Industries Company, Inc., a lumber manufacturing firm, operates a sawmill in Quirino. Sometime in May 1980, private respondent bound itself to sell and deliver to Blue Star Mahogany, Inc. (Blue Star), a compan y in Bulacan 100,000 board feet of sawn lumber with the understanding that an initial delivery would be made on May 15, 1980. To effect its first delivery, private respondents resident manager Dominador Cruz, contracted Virgilio Licuden, the driver of a cargo truck to transport its sawn lumber to the consignee Blue Star in Valenzuela, Bulacan. The cargo truck was registered in the name of petitioner Ma. Luisa Benedicto, the proprietor of Macoren Trucking, a business enterprise engaged in hauling freight. On May 15, 1980, cruz in the presence and with the consent of driver Licuden, supervised the loading of sawn lumber with invoice aboard the cargo truck. Thereafter, the Manager of Blue Star called up Greenhills president, informing him that the sawn lumber on board the subject cargo truck had not yet arrived in Bulacan. The latter then informed Greenhills resident manager. Still, Blue Star had not received the sawn lumber and were constrained to look for other suppliers. Thus, private respondent Greenhills filed criminal case against driver Luciden for estafa and also against petitioner Benedicto for recovery of the value of the lost sawn lumber plus damages before the RTC of Dagupan City. The trial court ruled against Benedicto and Luciden. On appeal, the IAC affirmed the decision of the trial court in toto. Issue: Whether or not petitioner Benedicto, being the registered owner of the carrier, should be held liable for the value of the undelivered or lost sawn lumber. Held: Yes, Benedicto is liable for the undelivered or lost sawn lumber as registered owner. There is no dispute that petitioner Benedicto has been holding herself out to the public as engaged in the business of hauling or transporting goods for hire or compensation. Petitioner Benedicto is, in brief, a common carrier. The prevailing doctrine on common carrier makes the registered owner liable for consequences flowing from the operations of the carrier, even though the specific vehicle involved may already have been transferred to another person. This doctrine rests upon the principle that in dealing with vehicles registered under the Public Service Law, the public has the right to assume that the registered owner is the actual or lawful owner thereof. It would be very difficult and often impossible as a practical matter, for members of the general public to enforce the rights of action that they may have for injuries inflicted by the vehicles being negligently operated if they should be required to prove who the actual owner is. The registered owner is not allowed to deny liability by proving the identity of the alleged transferee. In the case at bar, private respondent is not required to go beyond the vehicles certificate of registration to ascertain the own er of the carrier. In this regard, the letter presented by petitioner allegedly written by Benjamin Tee admitting that Licuden was his driver, had no evidentiary value not only because Benjamin Tee was not presented in court to testify on this matter but because of the afore mentioned doctrine. To permit the ostensible or registered owner to prove who the actual owner is, would be to set at naught the purpose or public policy which infuses that doctrine. The Court ruled that the Petition fro Review is Denied.

GANZON vs. CA Facts: In 1965, private respondent Tumambing contracted the services of petitioner Ganzon to haul 305 tons of scrap iron from Mariveles, Bataan on board the latters lighter. Pursuant to their agreement, private respondent delivered the scrap iron to the captain for loading. When half of the scrap iron was loaded, Mayor Advincula demanded P5,000.00 from private respondents, which the latter refused to give, prompting the Mayor to draw his gun and shoot at him. The gunshot was not fatal but he had to be taken to a hospital. Thereafter, the loading of the scrap iron was resumed. The Acting Mayor, accompanied by three policemen, ordered the captain and his crew to dump the scrap iron, with the rest brought to Nassco Compound. A receipt was issued stating that the Municipality of Mariveles had taken custody of the scrap iron. Issue: Whether or not petitioner is guilty of breach of contract of transportation and in imposing a liability against him commencing from the time the scrap iron was placed in his custody and control have no basis in fact and in law. Held: Yes, petitioner is guilty of breach of the contract of transportation. By the said act of delivery, the scraps were unconditionally placed in the possession and control of the common carrier, and upon their receipt by the carrier for transportation, the contract of carriage was deemed perfected. Consequently, the petitioner- carriers extraordinary responsibility for the loss, destruction or deterioration of the goods commenced. Pursuant to Article 1736, such extraordinary responsibility would cease only upon the delivery, actual or constructive, by the carrier to the consignee, or to the person who has a right to receive them. The fact that part of the shipment had not been headed the lighter did not impair the said contract of transportation as the goods remained in the custody and control of the carrier, albeit still unloaded. The Court ruled that the petition is DENIED.

EASTERN SHIPPING LINES, INC. vs. CA Facts: On September 4, 1978, thirteen coils of uncoated 7- wire stress relieved for pre- stressed concrete were shipped on board the vessel Jupri Venture owned and operated by petitioner, for delivery to stresstek Post- Tensioning Philippines in Manila. The said cargo was insured by respondent operator E. Razon, from whom the consignees broker received for delivery to consignees warehouse. It appears that while en route, the vessel encountered very rough seas and stormy weather, for the days, which caused it to pound and roll heavily. The coils which were wrapped in burlap cloth and cardboard paper were stored in the lower hold of the hatch of the vessel which were rusty on one side each and it was found that the wetting was caused by fresh water that entered the hatch. The complaint that was filed by the first Nationwide Assurance Corporation (insurer) against Eastern Shipping Lines and F. Razon in RTC, Manila was dismissed. On appeal, the judgment appealed from is hereby SET ASIDE. Only Eastern Shipping Lines, Inc. filed this petition. Issue: Whether or not rains and rough is considered as caso fortuito which would exempt petitioner from liability for the deterioration of the cargo. Held: No, such is not considered caso fortuito which would exempt from liability for the deterioration of the cargo. Art. 1737 of the Civil Code provides that, common carrier are bound to observe extraordinary vigilance over goods according to all circumstances of each case. Further Article 1735 of the Civil Code provides that, if the goods are lost, destroyed, or deteriorated, common carriers are presumed to have been at fault o r to have acted negligently, unless they prove that they observed extraordinary diligence as required in Article 1733. In the case at bar, heavy rains and rough seas were not caso fortuito, but normal occurrences that an ocean- going vessel, particularly in the month of September, is a month of rains and heavy seas would encounter as a matter of routine. They are not unforeseen nor unforeseeable. These are conditions that ocean- going vessels would encounter and provide for, in the ordinary course of voyage. That rain water (not sea water) found its way into the holds of the Jupri Venture is a clear indication that care and foresight did not attend the closing of ships hatches so that rain water would not find its way into the cargo holds of the ship. Since, the carrier has failed to establish any caso fortuito, the presumption by law of fault or negligence on the part of the carrier applies. The Court ruled that the petition is DISMISSED.

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