G.R. No.

L-18965

October 30, 1964

COMPAIA
vs.
INSURANCE COMPANY OF NORTH AMERICA, respondent.

MARITIMA, petitioner,

Sometime in October, 1952, Macleod and Company of the Philippines contracted by

telephone the services of the Compaia Maritima, a shipping corporation, for the
shipment of 2,645 bales of hemp from Davao City to Manila and for their subsequent
transhipment to Boston, Massachusetts, U.S.A. on board the S.S. Steel Navigator.
This oral contract was later on confirmed by a formal and written booking issued by
Macleod's branch office in Sasa and handcarried to Compaia Maritima's branch
office in Davao in compliance with which the latter sent to Macleod's private wharf LCT
Nos. 1023 and 1025 on which the loading of the hemp was completed on October 29,
1952.

These two lighters were manned each by a patron and an assistant patron.

During the night of October 29, 1952, or at the early hours of October 30, LCT No.
1025 sank, resulting in the damage or loss of 1,162 bales of hemp loaded therein.

On October 30, 1952, Macleod promptly notified the carrier's main office in Manila and
its branch in Davao advising it of its liability.

All abaca shipments of Macleod were insured with the Insurance Company of North
America against all losses and damages.

In due time, Macleod filed a claim for the loss it suffered as above stated with said
insurance company, and after the same had been processed, the sum of P64,018.55
was paid.

The insurance company being the assignee of the shipper, subrogated the rights of
the latter and that it claimed payment from Compania Maritima.

Having failed to recover from the carrier the sum of P60,421.02, the insurance
company instituted the present action on October 28, 1953.

1.

YES

This issue should be answered in the affirmative.

The fact that the carrier sent its lighters free of charge to take the hemp from
Macleod's wharf at Sasa preparatory to its loading onto the ship Bowline Knot does
not in any way impair the contract of carriage already entered into between the carrier
and the shipper, for that preparatory step is but part and parcel of said contract of
carriage.

In other words, here we have a complete contract of carriage the consummation

of which has already begun: the shipper delivering the cargo to the carrier, and
the latter taking possession thereof by placing it on a lighter manned by its
authorized employees, under which Macleod became entitled to the privilege
secured to him by law for its safe transportation and delivery, and the carrier to
the full payment of its freight upon completion of the voyage.

The receipt of the goods by the carrier has been said to lie at the foundation of the
contract to carry and deliver, and if no goods are received there can be no such
contract. The liability and responsibility of the carrier under a contract for the carriage
of goods commence on their actual delivery to, or receipt by the carrier or an
authorized agent, of the goods.

The test as to whether the relation of shipper and carrier had been established is: Had
the control and possession of the goods been completely surrendered by the shipper
to the CC. Whenever the control and possession of goods passes to the carrier and
nothing remains to be done by the shipper, then it can be said with certainty that the
relation of shipper and carrier has been established.

The bill of lading is not indispensable to a contract of carriage. It is merely

documentary proof of the agreement of the parties. There was no force majeure. The
reason for the damage or the loss was lack of adequate protections and measures
taken by the carrier to prevent the loss.
RE: ISSUE OF FORCE MAJEURE

RTC: rendered judgment ordering the carrier to pay the insurance company the sum
of P60,421.02, with legal interest thereon from the date of the filing of the complaint
until fully paid, and the costs.

CA: affirmed RTC ruling, Hence, this petition for review.

ISSUE/S:

Petitioner disclaims responsibility for the damage of the cargo in question shielding
itself behind the claim offorce majeure or storm which occurred on the night of
October 29, 1952. But the evidence fails to bear this out.
Rather, it shows that the mishap that caused the damage or loss was due, not to force
majeure, but to lack of adequate precautions or measures taken by the carrier to
prevent the loss as may be inferred from the following findings of the Court of Appeals:
Aside from the fact that, as admitted by appellant's own witness, the ill-fated barge
had cracks on its bottom (pp. 18-19, t.s.n., Sept. 13, 1959) which admitted sea water
in the same manner as rain entered "thru tank man-holes", according to the patron of
LCT No. 1023 (exh. JJJ-4) conclusively showing that the barge was not seaworthy
it should be noted that on the night of the nautical accident there was no storm,
flood, or other natural disaster or calamity.

WON there is a contract of carriage between the carrier and shipper?

RE: RIGHT OF INSURANCE COMPANY TO RECOVER
HELD:

The instant case, therefore, is not one between the insured and the insurer, but one
between the shipper and the carrier, because the insurance company merely stepped
into the shoes of the shipper.

And since the shipper has a direct cause of action against the carrier on account of
the damage of the cargo, no valid reason is seen why such action cannot be asserted
or availed of by the insurance company as a subrogee of the shipper.

Nor can the carrier set up as a defense any defect in the insurance policy not only
because it is not a privy to it but also because it cannot avoid its liability to the shipper
under the contract of carriage which binds it to pay any loss that may be caused to the
cargo involved therein.

October 3, 1921

H.
E.
HEACOCK
vs.
MACONDRAY & COMPANY, INC., defendant-appellant.

The clocks were not delivered despite repeated demands.

RTC: rendered judgment in favor of the plaintiff against the defendant for the sum of
P226.02, this being the invoice value of the clocks in question plus the freight and
insurance thereon, with legal interest thereon from November 20, 1919, the date of
the complaint, together with costs.

From that judgment both parties appealed to this court.

PLAINTIFF: insists that it is entitled to recover from the defendant the market value of
the clocks in question, to wit: the sum of P420. The claim of the plaintiff is based upon
the argument that the two clause in the bill of lading above quoted, limiting the liability
of the carrier, are contrary to public order and, therefore, null and void.

DEFENDANT: contends that, in accordance with clause 1 of the bill of lading, the
plaintiff is entitled to recover only the sum of P76.36, the proportionate freight ton
value of the said clocks. The defendant, further ontends that both of said clauses are
valid, and the clause 1 should have been applied by the lower court instead of clause
9.

ISSUE:
COMPANY, plaintiff-appellant,

May a common carrier, by stipulations inserted in the bill of lading, limit its liability for the loss of
or damage to the cargo to an agreed valuation of the latter? 1awph!l.net
HELD: YES

FACTS:

9. Also, that in the event of claims for short delivery of, or damage to, cargo
being made, the carrier shall not be liable for more than the net invoice price
plus freight and insurance less all charges saved, and any loss or damage
for which the carrier may be liable shall be adjusted pro rata on the said
basis.

WHEREFORE, the decision appealed from is affirmed, with costs against petitioner.

G.R. No. L-16598

unless the value be expressly stated herein and ad valorem freight paid
thereon.

There can also be no doubt that the insurance company can recover from the carrier
as assignee of the owner of the cargo for the insurance amount it paid to the latter
under the insurance contract.
And this is so because since the cargo that was damaged was insured with
respondent company and the latter paid the amount represented by the loss, it is but
fair that it be given the right to recover from the party responsible for the loss.

This action was commenced in the Court of First Instance of the City of Manila to
recover the sum of P240 together with interest thereon.

On or about the 5th day of June, 1919, plaintiff shipped Edmonton clocks from New
York to Manila on board of steamship Bolton Castle, defendants vessel.
The said steampship arrived in the port of Manila on or about the 10th day of
September, 1919, consigned to the defendant herein as agent and representative of
said vessel in said port.
The bill of lading issued and delivered to the plaintiff by the master of the said
steamship Bolton Castle contained, among others, the following clauses:
1. It is mutually agreed that the value of the goods receipted for above does
not exceed $500 per freight ton, or, in proportion for any part of a ton,

Three kinds of stipulations have often been made in a bill of lading. The first is one
exempting the carrier from any and all liability for loss or damage occasioned by its
own negligence. The second is one providing for an unqualified limitation of such
liability to an agreed valuation. And the third is one limiting the liability of the carrier to
an agreed valuation unless the shipper declares a higher value and pays a higher rate
of freight.
According to an almost uniform weight of authority, the first and second kinds of
stipulations are invalid as being contrary to public policy, but the third is valid and
enforceable.
A reading of clauses 1 and 9 of the bill of lading here in question, however, clearly
shows that the present case falls within the third stipulation, to wit: That a clause in a
bill of lading limiting the liability of the carrier to a certain amount unless the shipper
declares a higher value and pays a higher rate of freight, is valid and enforceable.

A carrier may not, by a valuation agreement with a shipper, limit its liability in case of
the loss by negligence of an interstate shipment to less than the real value thereof,
unless the shipper is given a choice of rates, based on valuation

SPOUSES
PEDRO
GARCIA
and
EUFRACIA
LANDINGIN, plaintiffs-appellees,
vs.
PANGASINAN TRANSPORTATION CO. and MARCELO OLIGAN, defendants-appellants.

A limitation of liability based upon an agreed value to obtain a lower rate does not
conflict with any sound principle of public policy; and it is not conformable to plain
principles of justice that a shipper may understate value in order to reduce the rate
and then recover a larger value in case of loss.

FACTS:

It seems clear from the foregoing authorities that the clauses (1 and 9) of the bill of
lading here in question are not contrary to public order. Article 1255 of the Civil Code
provides that "the contracting parties may establish any agreements, terms and
conditions they may deem advisable, provided they are not contrary to law, morals or
public order." Said clauses of the bill of lading are, therefore, valid and binding upon
the parties thereto.
DISPOSITIVE: It follows from all of the foregoing that the judgment appealed from
should be affirmed, without any finding as to costs. So ordered.

The complaints in said Civil Cases Nos. D-1468 and D-1470 were filed by the spouses
Marcelo Landingin and Racquel Bocasas, and the spouses Pedro Garcia and Eufracia
Landingin, respectively, for damages allegedly suffered by them in connection with the
death of their respective daughter, Leonila Landingin and Estrella Garcia, due to the
alleged negligence of the defendants and/or breach of contract of carriage.
In their complaints, plaintiffs averred, among others, their above-mentioned daughters
were among the passengers in the bus driven by defendant Marcelo Oligan and
owned and operated by defendant PANTRANCO on an excursion trip from Dagupan
City to Baguio City

That when said bus reached an uphill point, it stopped for a few moments and then
slid backward unchecked; that when the said defendant suddenly swerved and
steered the bus toward the mountainside, Leonila and Estrellawere thrown out of the
bus through its open side unto the road, suffering serious injuries as a result of which
Leonila and Estrella died at the hospital.

DEFENDANTS: filed a joint answer to each of the two complaints alleging, among
others, that at the time of the accident, defendant driver was driving the bus at, the
slow speed of about 10 kilometers per hour.

That while the said defendant was steering his bus toward the mountainside after
hearing a sound coming from under the rear end of the bus, Leonila and Estrella
recklessly, and in disobedience to his shouted warnings and advice, jumped out of the
bus causing their heads to hit the road or pavement.

RTC: a.) absolved the defendants from any liability and dismissed the complaints b.)
ordered the defendant Pantranco to pay to the plaintiffs spouses Marcelo Tandingin
and Racquel Bocasas in Civil Case No. D-1468 the amount of P6,500.00; and the
amount of P3,500.00 to the spouses Pedro Garcia and Eufracia Landingin in Civil
Case No. D-1470, not in payment of liability because of any negligence on the part of
the defendants but as an expression of sympathy and goodwill

Defendants-appellants complain that having found them to be absolutely free from

fault or negligence, and having in fact dismissed the complaints against them, the
court should not have ordered them to assume any pecuniary liability.

ISSUE: WON RTC is correct

HELD:
G.R. No. L-28014-15 May 29, 1970
SPOUSES MARCELO LANDINGIN and RACQUEL BOCASAS, plaintiffs-appellees,
vs.
PANGASINAN TRANSPORTATION CO. and MARCELO OLIGAN, defendants-appellants.

No.
As a common carrier, defendant-appellant PANTRANCO was duty bound to carry its
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."

Did defendant-appellant PANTRANCO measure up to the degree of care and foresight

required it under the circumstances? We think not. The court below found that the
cross-joint of the bus in which the deceased were riding broke, which caused the
malfunctioning of the motor, which in turn resulted in panic among some of the
passengers. This is a finding of fact which this Court may not disturb.

We are of the opinion, however, that the lower court's conclusion drawn from that fact,
i.e., that "the accident was caused by a fortuitous event or an act of God brought
about by some extraordinary circumstances independent of the will of the Pantranco
or its employees," is in large measure conjectural and speculative, and was arrived at
without due regard to all the circumstances, as required by Article 1755.

In Lasam vs. Smith (45 Phil. 660), this Court held that an accident caused by defects
in the automobile is not a caso fortuito. The rationale of the carrier's liability is the fact
that "the passenger has neither the choice nor control over the carrier in the selection
and use of the equipment and appliances in use by the carrier." (Necesito, et al. vs.
Paras, et al., 104 Phil. 75.)

When a passenger dies or is injured, the presumption is that the common carrier is at
fault or that it acted negligently (Article 1756). This presumption is only rebutted by
proof on the carrier's part that it observed the "extraordinary diligence" required in
Article 1733 and the "utmost diligence of very cautious persons" required in Article
1755 (Article 1756).
In the instant case it appears that the court below considered the presumption
rebutted on the strength of defendants-appellants' evidence that only the day before
the incident, the crossjoint in question was duly inspected and found to be in order. It
does not appear, however, that the carrier gave due regard for all the circumstances in
connection with the said inspection.

G.R. No. L-29462

March 7, 1929

IGNACIO
DEL
vs.
MANILA ELECTRIC CO., defendant-appellant.

PRADO, plaintiff-appellee,

FACTS: This action was instituted in the Court of First Instance of Manila by Ignacio del Prado to
recover damages in the amount of P50,000 for personal injuries alleged to have been caused by
the negligence of te defendant, the Manila Electric Company, in the operation of one of its street
cars in the City of Manila., with costs of suit, and the defendant appealed. RTC: awarded
P10,000 damages, defendant appealed.

The appellant, the Manila Electric Company, is engaged in operating street cars in the
City for the conveyance of passengers.
Teodorico Florenciano, as appellant's motorman, was in charge of car No. 74 running
from east to west on R. Hidalgo Street.

The bus in which the deceased were riding was heavily laden with passengers, and it
would be traversing mountainous, circuitous and ascending roads.

Thus the entire bus, including its mechanical parts, would naturally be taxed more
heavily than it would be under ordinary circumstances.

The car usually stopped at its appointed place for taking and letting off passengers,
just east of the intersection, it resumed its course at a moderate speed under the
guidance of the motorman.

The mere fact that the bus was inspected only recently and found to be in order would
not exempt the carrier from liability unless it is shown that the particular circumstances
under which the bus would travel were also considered.

The car had proceeded only a short distance, however, when the plaintiff, Ignacio del
Prado, ran across the street to catch the car, his approach being made from the left.

The testimony of the plaintiff and of Ciriaco Guevara, one of his witnesses, tends to
shows that the plaintiff, upon approaching the car, raised his hand as an indication to
the motorman of his desire to board the car, in response to which the motorman eased
up a little, without stopping.

Upon this the plaintiff seized, with his hand, the front perpendicular handspot, at the
same time placing his left foot upon the platform.

However, before the plaintiff's position had become secure, and even before his raised
right foot had reached the flatform, the motorman applied the power, with the result
that the car gave a slight lurch forward. This sudden impulse to the car caused the

DISPOSITIVE: IN VIEW OF THE FOREGOING CONSIDERATIONS, the judgment

appealed from is modified as indicated above, and defendant-appellant PANTRANCO
is ordered to pay to plaintiffs-appellees the amounts stated in the judgment appealed
from, as damages for breach of contracts, with interest thereon at the legal rate from
the date of the filing of the complaints. Costs against defendant-appellant
PANTRANCO.

plaintiff's foot to slip, and his hand was jerked loose from the handpost, He therefore
fell to the ground, and his right foot was caught and crushed and later had to be
amputated in the hospital.

The motorman stated at the trial that he did not see the plaintiff attempting to board
the car; that he did not accelerate the speed of the car as claimed by the plaintiff's
witnesses; and that he in fact knew nothing of the incident until after the plaintiff had
been hurt and some one called to him to stop.

ISSUE: WON defendant is liable

HELD:

YES
We may observe at the outset that there is no obligation on the part of a street railway
company to stop its cars to let on intending passengers at other points than those
appointed for stoppage. In fact it would be impossible to operate a system of street
cars if a company engage in this business were required to stop any and everywhere
to take on people who were too indolent, or who imagine themselves to be in too great
a hurry, to go to the proper places for boarding the cars.

Nevertheless, although the motorman of this car was not bound to stop to let the
plaintiff on, it was his duty to do act that would have the effect of increasing the
plaintiff's peril while he was attempting to board the car.

The premature acceleration of the car was, in our opinion, a breach of this duty.

The relation between a carrier of passengers for hire and its patrons is of a
contractual nature; and in failure on the part of the carrier to use due care in
carrying its passengers safely is a breach of duty ( culpa contructual) under
articles 1101, 1103 and 1104 of the Civil Code. Furthermore, the duty that the
carrier of passengers owes to its patrons extends to persons boarding the cars
as well as to those alighting therefrom.

The distiction between these two sorts of negligence is important in this jurisdiction,
for the reason that where liability arises from a mere tort (culpa aquiliana), not
involving a breach of positive obligation, an employer, or master, may exculpate
himself, under the last paragraph of article 1903 of the Civil Code, by providing that he
had exercised due degligence to prevent the damage; whereas this defense is not
available if the liability of the master arises from a breach of contrauctual duty (culpa
contractual).

In the case bfore us the company pleaded as a special defense that it had used all
the deligence of a good father of a family to prevent the damage suffered by the
plaintiff; and to establish this contention the company introduced testimony showing
that due care had been used in training and instructing the motorman in charge of this
car in his art. But this proof is irrelevant in view of the fact that the liability involved was
derived from a breach of obligation under article 1101 of the Civil Code and related
provisions.

RE: CONTRIBUTORY NEGLIGENCE OF PLAINTIFF

As to the contributory negligence of the plaintiff, we are of the opinion that it should be
treated, as a mitigating circumstance under article 1103 of the Civil Code.
It is obvious that the plaintiff's negligence in attempting to board the moving car was
not the proximate cause of the injury. The direct and proximate cause of the injury was
the act of appellant's motorman in putting on the power prematurely.
A person boarding a moving car must be taken to assume the risk of injury from
boarding the car under the conditions open to his view, but he cannot fairly be held to
assume the risk that the motorman, having the situation in view, will increase his peril
by accelerating the speed of the car before he is planted safely on the platform. Again,
the situation before us is one where the negligent act of the company's servant
succeeded the negligent act of the plaintiff, and the negligence of the company must
be considered the proximate cause of the injury.
The rule here applicable seems to be analogous to, if not identical with that which is
sometimes referred to as the doctrine of "the last clear chance." In accordance with
this doctrine, the contributory negligence of the party injured will not defeat the action
if it be shown that the defendant might, by the exercise of reasonable care and
prudence, have avoided the consequences of the negligence of the injured party.
The negligence of the plaintiff was, however, contributory to the accident and must be
considered as a mitigating circumstance.
DISPOSITIVE: It being understood, therefore, that the appealed judgment is modified
by reducing the recovery to the sum of P2,500, the judgment, as thus modified, is
affirmed. So ordered, with costs against the appellant.