Fisher vs. Yangco Steamship Case DigestFisher vs. Yangco Steamship(31 Phil 1)

Facts:The complained alleges that plaintiff is a stockholder in Yangco SteamshipCompany, the owner of the large steam vessels, duly licensed to engage in the coastwise trade of the Philippine Island; that on or about June 10, 1912, the directors of the company, adopted a resolution which was thereafter ratified and affirmed by the stockholders of the company expressly declaring and providing that the classes of merchandise to be carried by the company in its business as common carrier do not include dynamite, powder or other explosives, and expressly prohibiting the officers, agents an d servants of the company from offering to carry, accepting for carriage or carrying said dynamite, powder or other explosives.

Issue:Whether the refusal of the owner and officer of a steam vessel, to accept for carriage dynamite, powder or other explosives for carriage can be held to be a lawful act?

Held:The traffic in dynamite gun powder and other explosive is vitally essential to the material and general welfare of the inhabitants of this islands and it these products are to continue in general use throughout the Philippines they must be transported from water to port to port in various island which make up the Archipelago.It follows that a refusal by a particular vessel engage as a common carrier of merchandise in coastwise trade in the Philippine Island to accept such explosives for carriage constitutes a violation.The prohibition against discrimination penalized under the statute, unless it can be shown that there is so Real and substantial danger of disaster necessarily involved in the courage of any or all of this article of merchandise as to render such refusal a due or unnecessary or a reasonable exercise or prudence and discreation on the part of the ship owner.

Equitable Leasing Corporation vs. Lucita Suyom, Marissa Enano,MyrnaTamayo and Felix Oledan[G.R. No.143360, 5September 2002, 388 SCRA 445]Facts:AtractordrivenbyRaulTutorrammedintoahouse-cum-storeinTondo, Manila. Part of the house was destroyed. Two people died andfourwereinjured.Tutorwasconvictedofrecklessimprudenceresulting in multiple homicide and multiple physical injuries. Verification with the Land Transportation Office revealed that the registered owner of the tractor was Equitable Leasing Corporation who leased it to Edwin Lim. The relatives ofthe victims filed a civil case ordamages.TheRegionalTrialCourtruledagainstEquitableandorderedittopaydamages to the victims relatives.Upon Equitables appeal, the Court of Appeals sustained the RTC. Equitablefiled a petition forreview with the Supreme Court.

Issue:Whether Equitable Leasing is liable for damages

Held/Ratio:Yes, Equitable Leasing is liable. The petition is denied and the CA decision is affirmed .As the registered owner of the tractor, Equitable Leasing is liable for the actsofRaulTutorevenifhewasactuallytheemployeeofEquitablesformer lessee, Ecatine Corporation, who became the actual owner ofthe tractor by virtue of a deed of sale not registered with the LTO. Regardless of sales made of a motor vehicle, the registered owner is the lawful operator insofar as the public and third persons are concerned; consequently,itisdirectlyandprimarilyresponsiblefortheconsequencesofitsoperation.Intheeyesofthelaw,theowner/operatorofrecordistheemployerofthedriver,theactualowner/operator being considered as merely the agent of the registered owner/operator. The principle applies even if the registered owner ofany vehicle does not use it for public service.The main aim of motor vehicle registration is to identify the owner so that ifanyaccidenthappens,oranydamageorinjuryiscausedbythevehicle,responsibilitycanbefixedonadefiniteindividual,the registered owner. Failure to register the deed of sale should not prejudice victims, who have the right torely on theprinciple that theregistered owner isliablefor damages caused by thenegligence of the driver. Equitable Leasing cant hide behind the allegation that Tutor was Ecatine Corps employee, because it will prevent victims from recovering their loss on the basis of Equitables inaction in failing to register the sale.The non-registration is Equitables fault, which should face the legal consequences thereof.

Equitable Leasing Corp vs. Suyom, Enena, Tamayo & OledanFacts:A Fuso Road tractor driven by Tutor rammed into the house cum of Tamayo which resulted in the death of Tamayos son and Oledans daughter. Failure to claim from a criminal case finding Tutor guilty of reckless imprudence, respondents filed a civil case based on quasi delict against Equitable Leasing Corp, the registered owner of the tractor, among others. Equitable contends that it should not be held liable for such damages which arose from the negligence of the driver Fuso Road. That such tractor was already sold to the owner of Fuso Road at the time of the accident. Thus, not having employed driver Tutor, it could not have controlled or supervised him.

Issue: WON Equitable should be held liable for damages in an action based on quasi delict for the negligent acts of a driver who was not its employee.

Held: Yes, Equitable should be held liable because it was the registered owner at the time of the accident. The Court has consistently ruled that, regardless of sales made of a motor vehicle, the registered owner is the lawful operator insofar as the public and third persons are concerned; consequently, it is directly and primarily responsible for the consequences of its operation.In contemplation of law, the owner/operator of record is the employer of the driver, the actual operator and employer being considered as merely itsagent.The same principle applies even if the registered owner of any vehicle does not use it for public service.- - - - - - - - - - - - - - - - -The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that any damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite individual, the registered owner.BA Finance Corp vs. CAG.R. No. 98275 November 13, 1992Facts:Amare, the driver of an Isuzu truck was involved in an accident which caused the death of three persons. Amare was found guilty beyond reasonable doubt of reckless imprudence. BA Finance was found liable for damages since the truck was registered in its name. BA Finance contends that it should not be held liable since it was not Amares employer at the time of the accident. It also contends that the Isuzu truck was in the possession of Rock Component Phil, by virtue of a lease agreement. Hence, BA Finance wants to prove who the actual/real owner is at the time of the accident, and in accordance with such proof, evade liability and lay the same on the person actually owning the vehicle.Issues:1 WON BA Finance should be held liable.2 WON BA Finance can escape liability by proving the actual/real owner of the truck.Held:1 Yes, BA Finance is liable.The registered owner of a certificate of public convenience is liable to the public for the injuries or damages suffered by passengers or third persons caused by the operation of said vehicle, even though the same had been transferred to a third person.Under the same principlethe registered owner of any vehicle, even if not used for a public service, should primarily be responsible to the public or to the third persons for injuries caused the latter while the vehicle is being driven on the highways or streets.2 No, the law does not allow him.The law, with its aim and policy in mind,does not relieve him directlyof the responsibility that the law fixes and places upon him as an incident or consequence of registration.This may appear harsh but nevertheless, a registered owner who has already sold or transferred a vehicle has the recourse to athird-party complaint, in the same action brought against him to recover for the damage or injury done,against the vendee or transferee of the vehicle.While the registered owneris primarily responsible for the damage caused, hehas a right to be indemnified by the real or actual owner of the amount that he may be required to pay as damage for the injury caused.Duavit vs. CA, Sarmiento & CatuarG.R. No. 82318 May 18, 1989Facts:Private respondents were on board a jeep when they met an accident with another jeep driven by Sabiniano. This accident caused injuries to private respondents, thus they filed a case for damages against driver Salbiniano and owner of the jeep Duavit. Duavit admits ownership of the jeep but contends that he should not be held liable since Salbiniano is not his employee and that the jeep was taken by Salbiniano without his (Duavit) consent.

Issue:Whether or not the owner of a private vehicle which figured in an accident can be held liable as an employer when the said vehicle was neither driven by an employee of the owner nor taken with his consent.Held: No, anowner of a vehicle cannot be held liable for an accident involving the said vehicle if the same was driven without his consent or knowledge and by a person not employed by him.To hold the petitioner liable for the accident caused by the negligence of Sabiniano who was neither his driver nor employee would be absurd as it would be like holding liable the owner of a stolen vehicle for an accident caused by the person who stole such vehicle.

PCI LEASING AND FINANCE, INC. vsUCPB GENERAL INSURANCE CO., INC.FACTS:A Mitsubishi Lancer car owned by UCPB, insured with UCPB General Insurance Co., was traversing the Laurel Highway, Barangay Balintawak, LipaCity. It was driven by Flaviano Isaac with Conrado Geronimo (Asst. Manager of said bank), was hit and bumped by an 18-wheeler Fuso Tanker Truck, owned by defendants-appellants PCI Leasing &Finance, Inc. allegedly leased to and operated by defendant-appellant Superior Gas & Equitable Co., Inc. (SUGECO) and driven by its employee, defendant appellant Renato Gonzaga. The impact caused heavy damage to the Mitsubishi Lancer car resulting in an explosion of the rear part of the car. The driver and passenger suffered physical injuries. However, the driver defendant-appellant Gonzaga continued on its way to its destination and did not bother to bring his victims to the hospital. As the 18-wheeler truck is registered under the name of PCI Leasing, repeated demands were made by plaintiff-appellee for the payment of the aforesaid amounts. However, no payment was made. PCI Leasing and Finance ,Inc., (petitioner) interposed the defense that it could not be held liable for the collision, since the driver, Gonzaga, was not its employee, but that of its co-defendant SUGECO.In fact, it was SUGECO, that was the actual operator of the truck, pursuant to a Contract of Lease signed by petitioner and SUGECO.Petitioner, however, admitted that it was the owner of the truck in question. RTC rendered judgment in favour of UCPB General Insurance and ordered PCI Leasing and Gonzaga, to pay jointly and severally the former. CA affirmed with the lower courts decision.ISSUES:1) Whether petitioner, as registered owner of a motor vehicle that figured in aquasi-delictmay be held liable, jointly and severally, with the driver thereof, for the damages caused to third parties.2) Whether petitioner, as a financing company, is absolved from liability by the enactment of Republic Act (R.A.) No.8556, or the Financing Company Act of 1998.RULING:1) YES. The principle of holding the registered owner of a vehicle liable for quasi-delictsresulting from its use is well-established in jurisprudence.As explained inthe case of Erezo v. Jepte,thus:Registration is required not to make said registration the operative act by which ownership in vehicles is transferred, as in land registration cases, because the administrative proceeding of registration does not bear any essential relation to the contract of sale between the parties (Chinchilla vs. Rafael and Verdaguer, 39 Phil. 888), but to permit the use and operation of the vehicle upon any public highway (section 5 [a], Act No. 3992, as amended.)The main aim of motorvehicle registration is to identify the owner so that if any accident happens, or that any damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite individual, the registered owner.Instances are numerous wherevehicles running on public highways caused accidents or injuries to pedestrians or other vehicles without positive identification of the owner or drivers, or with very scant meansof identification.It is to forestall thesecircumstances, so inconvenient or prejudicial to the public, that the motor vehicle registration is primarily ordained, in the interest of the determination of persons responsible for damages or injuries caused on public highways2) NO.The new law, R.A. No. 8556, notwithstanding developmentsin foreign jurisdictions, do not supersede or repeal the law on compulsory motor vehicle registration.No part of the law expressly repeals Section 5(a) and (e) of R.A. No.4136, as amended, otherwise known as the Land Transportation and Traffic Code. Thus, the rule remains the same: asale, lease, or financial lease, for that matter, that is not registered with the Land Transportation Office, still does not bindthird persons who are aggrieved in tortious incidents, for the latter need only to rely on the public registration of amotor vehicle as conclusive evidence of ownership. A lease such as the one involved in the instant case is anencumbrance in contemplation of law, which needs to be registered in order for it to bind third parties.Under thispolicy, the evil sought to be avoided is the exacerbation of the suffering of victims of tragic vehicular accidents in notbeing able to identify a guilty party.A contrary ruling will not serve theends of justice.The failure to register a lease,sale, transfer or encumbrance, should not benefit the parties responsible, to the prejudice of innocent victims.Lim & Gunnaban vs. CA & GonzalesFacts:Gonzales purchased an Isuzu passenger jeepney from Vallarta. Vallarta remained as the holder of a certificate of public convenience and the registered owner of the jeepney. Subsequently, the jeepney collided with a ten-wheeler truck owned by Lim, driven by Gunnaban which resulted in the death of 1 passenger and injuries to all others. Failure to arrive to a settlement with Lim for the repair of the jeepney, Gonzales brought an action for damages against Lim & Gunnaban. Lim denied liability asserting that Vallarte, and not Gonzales, is the real party in interest being the registered owner of the jeepney. He further asserts that an operator of the vehicle continues to be its operator as he remains the operator of record; and that to recognizean operator under thekabitsystem as the real party in interest and to countenance his claim for damages is utterly subversive of public policy.Issue: WON Gonzales, an operator under thekabitsystem (considering that he is not the registered owner of the jeepney), may sue for damages against Lim. Or, WON Gonzales is a real party in interest.Held: Yes, Gonzales may sue.The evil sought to be prevented in enjoining thekabitsystem*does not exist.1Neither of the parties to the perniciouskabitsystem is being held liable for damages.2 The case arose from the negligence of another vehicle in using the public road to whom no representation, or misrepresentation, as regards the ownership and operation of the passenger jeepney was made and to whom no such representation, or misrepresentation, was necessary. Thus it cannot be said that Gonzales and the registered owner of the jeepney were in stoppels for leading the public to believe that the jeepney belonged to the registered owner.3 The riding public was not bothered nor inconvenienced at the very least by the illegal arrangement. On the contrary, it was private respondent himself who had been wronged and was seeking compensation for the damage done to him. Certainly, it would be the height of inequity to deny him his right. Thus, it is evident that private respondent has the right to proceed against petitioners for the damage caused on his passenger jeepney as well as on his business.Thekabitsystem is an arrangement whereby a person who has been granted a certificate of public convenience allows other persons who own motor vehicles to operate them under his license, sometimes for a fee or percentage of the earnings.Although the parties to such an agreement are not outrightly penalized by law, thekabitsystem is invariably recognized as being contrary to public policy and therefore void and inexistent under Art. 1409 of the Civil Code.Teja Marketing v. Intermediate Appellate Court(148 SCRA 347)

Facts:Pedro Nale bought from Teja Marketing a motorcycle with complete accessories and a sidecar. A chattel mortgage was constituted as a security for the payment of the balance of the purchase price. The records of the Land Transportation Commission show that the motorcycle sold to the defendant was first mortgaged to the Teja Marketing by Angel Jaucian though the Teja Marketing and Angel Jaucian are one and the same, because it was made to appear that way only as the defendant had no franchise of his own and he attached the unit to the plaintiff's MCH Line. The agreement also of the parties here was for the plaintiff to undertake the yearly registration of the motorcycle with the Land Transportation Commission. The plaintiff, however failed to register the motorcycle on that year on the ground that the defendant failed to comply with some requirements such as the payment of the insurance premiums and the bringing of the motorcycle to the LTC for stenciling, the plaintiff said that the defendant was hiding the motorcycle from him. Lastly, the plaintiff also explained that though the ownership of the motorcycle was already transferred to the defendant, the vehicle was still mortgaged with the consent of the defendant to the Rural Bank of Camaligan for the reason that all motorcycle purchased from the plaintiff on credit was rediscounted with the bank.

Teja Marketing made demands for the payment of the motorcycle but just the same Nale failed to comply, thus forcing Teja Marketing to consult a lawyer and file an action for damage before the City Court of Naga in the amount of P546.21 for attorney's fees and P100.00 for expenses of litigation. Teja Marketing also claimed that as of 20 February 1978, the total account of Nale was already P2, 731, 05 as shown in a statement of account; includes not only the balance of P1, 700.00 but an additional 12% interest per annum on the said balance from 26 January 1976 to 27 February 1978; a 2% service charge; and P546.21 representing attorney's fees. On his part, Nale did not dispute the sale and the outstanding balance of P1,700.00 still payable to Teja Marketing; but contends that because of this failure of Teja Marketing to comply with his obligation to register the motorcycle, Nale suffered damages when he failed to claim any insurance indemnity which would amount to no less than P15,000.00 for the more than 2 times that the motorcycle figured in accidents aside from the loss of the daily income of P15.00 as boundary fee beginning October 1976 when the motorcycle was impounded by the LTC for not being registered. The City Court rendered judgment in favor of Teja Marketing, dismissing the counterclaim, and ordered Nale to pay Teja Marketing On appeal to the Court of First Instance of Camarines Sur, the decision was affirmed in toto. Nale filed a petition for review with the Intermediate Appellate Court. On 18 July 1983, the appellate court set aside the decision under review on the basis of doctrine of "pari delicto," and accordingly, dismissed the complaint of Teja Marketing, as well as the counterclaim of Nale; without pronouncements as to costs. Hence, the petition for review was filed by Teja Marketing and/or Angel Jaucian.

Issue:Whether the defendant can recover damages against the plaintiff?

Held:Unquestionably, the parties herein operated under an arrangement, commonly known as the "kabit system" whereby a person who has been granted a certificate of public convenience allows another person who owns motor vehicles to operate under such franchise for a fee. A certificate of public convenience is a special privilege conferred by the government. Abuse of this privilege by the grantees thereof cannot be countenanced.

The "kabit system" has been identified as one of the root causes of the prevalence of graft and corruption in the government transportation offices. Although not out rightly penalized as a criminal offense, the kabit system is invariably recognized as being contrary to public policy and, therefore, void and in existent under Article 1409 of the Civil Code. It is a fundamental principle that the court will not aid either party to enforce an illegal contract, but will leave both where it finds then. Upon this premise it would be error to accord the parties relief from their predicament.LITA ENTERPRISES, INC., vs.INTERMEDIATE APPELLATE COURT, [G.R. No. L-64693 April 27, 1984]

FACTS:Sometime in 1966, the spouses Nicasio M. Ocampo and Francisca Garcia, herein private respondents, purchased in installment from the Delta Motor Sales Corporation five (5) Toyota Corona Standard cars to be used as taxicabs. Since they had no franchise to operate taxicabs, they contracted with petitioner Lita Enterprises, Inc., through its representative, Manuel Concordia, for the use of the latter's certificate of public convenience in consideration of an initial payment of P1,000.00 and a monthly rental of P200.00 per taxicab unit. To effectuate Id agreement, the aforesaid cars were registered in the name of petitioner Lita Enterprises, Inc, Possession, however, remained with tile spouses Ocampo who operated and maintained the same under the name Acme Taxi, petitioner's trade name.

About a year later one of said taxicabs driven by their employee, Emeterio Martin, collided with a motorcycle whose driver, one Florante Galvez, died from the head injuries sustained therefrom. A criminal case was eventually filed against the driver Emeterio Martin, while a civil case for damages was instituted by Rosita Sebastian Vda. de Galvez, heir of the victim, against Lita Enterprises, Inc., as registered owner of the taxicab in the latter case. Petitioner Lita Enterprises, Inc. was adjudged liable for damages by the CFI.

This decision having become final, a writ of execution was issued. Two of the vehicles of respondent spouses were levied upon and sold at public auction.

Thereafter, Nicasio Ocampo decided to register his taxicabs in his name. He requested the manager of petitioner Lita Enterprises, Inc. to turn over the registration papers to him, but the latter allegedly refused. Hence, he and his wife filed a complaint against Lita Enterprises, Inc., Mrs. de Galvez and the Sheriff of Manila for reconveyance of motor vehicles with damages.

ISSUE: Whether or not petitioner has a cause of action against defendants.

HELD:No.Unquestionably, the parties herein operated under an arrangement, commonly known as the "kabit system", whereby a person who has been granted a certificate of convenience allows another person who owns motors vehicles to operate under such franchise for a fee. A certificate of public convenience is a special privilege conferred by the government . Abuse of this privilege by the grantees thereof cannot be countenanced. The "kabit system" has been Identified as one of the root causes of the prevalence of graft and corruption in the government transportation offices. In the words of Chief Justice Makalintal, "this is a pernicious system that cannot be too severely condemned. It constitutes an imposition upon the goo faith of the government.

Although not outrightly penalized as a criminal offense, the "kabit system" is invariably recognized as being contrary to public policy and, therefore, void and inexistent under Article 1409 of the Civil Code, It is a fundamental principle that the court will not aid either party to enforce an illegal contract, but will leave them both where it finds them. Upon this premise, it was flagrant error on the part of both the trial and appellate courts to have accorded the parties relief from their predicament. Article 1412 of the Civil Code denies them such aid. It provides:

ART. 1412. if the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the following rules shall be observed:

(1) when the fault, is on the part of both contracting parties, neither may recover what he has given by virtue of the contract, or demand the performance of the other's undertaking.

Having entered into an illegal contract, neither can seek relief from the courts, and each must bear the consequences of his acts.

The defect of inexistence of a contract is permanent and incurable, and cannot be cured by ratification or by prescription. As this Court said in Eugenio v. Perdido, "the mere lapse of time cannot give efficacy to contracts that are null void."

The principle of in pari delicto is well known not only in this jurisdiction but also in the United States where common law prevails. Under American jurisdiction, the doctrine is stated thus: "The proposition is universal that no action arises, in equity or at law, from an illegal contract; no suit can be maintained for its specific performance, or to recover the property agreed to be sold or delivered, or damages for its property agreed to be sold or delivered, or damages for its violation. The rule has sometimes been laid down as though it was equally universal, that where the parties are in pari delicto, no affirmative relief of any kind will be given to one against the other." Although certain exceptions to the rule are provided by law, We see no cogent reason why the full force of the rule should not be applied in the instant case.

FACTSPetitioner Maersk Line is engaged in the transportation of goods by sea, doing business in the Philippines through its general agent Compania de Tabacos de Filipinas, while private respondent Efren Castillo is the proprietor of Ethegal Laboratories, a firm engaged in the manufacture of pharmaceutical products.

On Nov. 12, 1976, Castillo ordered from Eli Lilly, Inc. of Puerto Rico 600,000 empty gelatin capsules for the manufacture of his pharmaceutical products. The capsules were placed in 6 drums of 100,000 capsules each valued at US$1,668.71. Shipper Eli Liily,Inc. advised Castillo through a Memorandum of Shipment that the products were already shipped on board MV Anders Maesrkline and date of arrival to be April 3, 1977.

However, for unknown reasons, said cargoes of capsules were diverted to Richmond, VA and then transported back to Oakland, CA and with the goods finally arriving in the PI on June 10, 1977. Consignee Castillo refused to take delivery of the goods on account of its failure to arrive on time, and filed an action for rescission of contract with damages against Maersk and Eli Lilly alleging gross negligence and undue delay.

Maersk contends that it is liable only in case of loss, destruction or deterioration of goods under Art 1734 NCC while Eli Lilly in its cross claim argued that the delay was due solely to the negligence of Maersk Line. Trial Court dismissed the complaint against Eli Lilly and the latter withdrew cross claim but TC still held Maersk liable and CA affirmed with modifications.

ISSUES

1. W/N a cause of action exists against Maersk Line given that there was a dismissal of the complaint against Eli Lilly? Yes, but not under the cross claim rather because Maersk was an original party.2. W/N Castillo is entitled to damages resulting from delay in the delivery of the shipment in the absence in the bill of lading of a stipulation on the delivery of goods? Yes.

RULING

The complaint was filed originally against Eli Lilly, Inc. as shipper-supplier and petitioner as carrier. Petitioner Maersk Line being an original party defendant upon whom the delayed shipment is imputed cannot claim that the dismissal of the complaint against Eli Liily inured to its benefit.

Petitioner contends as well that it cannot be held liable because there was no special contract under which the carrier undertook to deliver the shipment on or before a specific date and that the Bill of Lading provides that The Carrier does not undertake that the Goods shall arrive at port of discharge or the place of delivery at any particular time. However, although the SC stated that a bill of lading being a contract of adhesion will not be voided on that basis alone, it did declare that the questioned provision to be void because it has the effect of practically leaving the date of arrival of the subject shipment on the sole determination and will of the carrier. It is established that without any stipulated date, the delivery of shipment or cargo should be made within a reasonable time. In the case at hand, the SC declared that a delay in the delivery of the goods spanning a period of 2 months and 7 days falls way beyond the realm of reasonableness.

Trans-Asia Shipping Lines vs. CA(GR 118126, 4 March 1996)

FACTS:

Respondent Atty. Renato Arroyo, a public attorney, bought a ticket from herein petitioner for the voyage of M/V Asia Thailand vessel to Cagayan de Oro City from Cebu City on November 12, 1991.

At around 5:30 in the evening of November 12, 1991, respondent boarded the M/V Asia Thailand vessel during which he noticed that some repairs were being undertaken on the engine of the vessel. The vessel departed at around 11:00 in the evening with only one (1) engine running.

After an hour of slow voyage, the vessel stopped near Kawit Island and dropped its anchor thereat. After half an hour of stillness, some passengers demanded that they should be allowed to return to Cebu City for they were no longer willing to continue their voyage to Cagayan de Oro City. The captain acceded to their request and thus the vessel headed back to Cebu City.

InCebu City, plaintiff together with the other passengers who requested to be brought back to Cebu City, were allowed to disembark. Thereafter, the vessel proceeded to Cagayan de Oro City. Petitioner, the next day, boarded the M/V Asia Japan for its voyage to Cagayan de Oro City, likewise a vessel of defendant.

On account of this failure of defendant to transport him to the place of destination on November 12, 1991, respondent Arroyo filed before the trial court an action for damage arising from bad faith, breach of contract and from tort, against petitioner. The trial court ruled only for breach of contract. The CA reversed and set aside said decision on appeal.

ISSUE:

Whether or not the petitioner Trans-Asia was negligent?

HELD:

Yes.

Before commencing the contracted voyage, the petitioner undertook some repairs on the cylinder head of one of the vessels engines. But even before it could finish these repairs, it allowed the vessel to leave the port of origin on only one functioning engine, instead of two. Moreover, even the lone functioning engine was not in perfect condition as sometime after it had run its course, it conked out. This caused the vessel to stop and remain adrift at sea, thus in order to prevent the ship from capsizing, it had to drop anchor. Plainly, the vessel was unseaworthy even before the voyage began. For a vessel to be seaworthy, it must be adequately equipped for the voyage and manned with a sufficient number of competent officers and crew.[21] The failure of a common carrier to maintain in seaworthy condition its vessel involved in a contract of carriage is a clear breach of is duty prescribed in Article 1755 of the Civil Code.