De Guzman v. CA

Facts:Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings those that he gathered to Manila for resale using 2 six-wheeler trucks. On the return trip to Pangasinan, respondent would load his vehicle with cargo which various merchants wanted delivered, charging fee lower than the commercial rates. Sometime in November 1970, petitioner Pedro de Guzman contracted with respondent for the delivery of 750 cartons of Liberty Milk. On December 1, 1970, respondent loaded the cargo. Only 150 boxes were delivered to petitioner because the truck carrying the boxes was hijacked along the way. Petitioner commenced an action claiming the value of the lost merchandise. Petitioner argues that respondent, being a common carrier, is bound to exercise extraordinary diligence, which it failed to do. Private respondent denied that he was a common carrier, and so he could not be held liable for force majeure. The trial court ruled against the respondent, but such was reversed by the Court of Appeals.Issues:(1) Whether or not private respondent is a common carrier(2) Whether private respondent is liable for the loss of the goodsHeld:(1) 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. 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. It appears to the Court that private respondent is properly characterized as a common carrier even though he merely "back-hauled" goods for other merchants from Manila to Pangasinan, although such backhauling was done on a periodic or occasional rather than regular or scheduled manner, and even though private respondent's principal occupation was not the carriage of goods for others. There is no dispute that private respondent charged his customers a fee for hauling their goods; that fee frequently fell below commercial freight rates is not relevant here. A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers.(2) 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:a. Flood, storm, earthquake, lightning, or other natural disaster or calamity;b. Act of the public enemy in war, whether international or civil;c. Act or omission of the shipper or owner of the goods;d. The character of the goods or defects in the packing or in the containers; ande. Order or act of competent public authority."The hijacking of the carrier's truck - does not fall within any of the five (5) categories of exempting causes listed in Article 1734. 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. We believe and so hold that the limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where the goods are lost as a result of a robbery which is attended by "grave or irresistible threat, violence or force." 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.

Fabre vs. Court of Appeals 

Facts: Petitioners Engracio Fabre, Jr. and his wife were owners of a Mazda minibus. They used the bus principally in connection with a bus service for school children which they operated in Manila. It was driven by

Porfirio Cabil. 

On November 2, 1984 private respondent Word for the World Christian Fellowship Inc. (WWCF) arranged with the petitioners for the transportation of 33 members of its Young Adults Ministry from Manila to La Union and back in consideration of which private respondent paid petitioners the amount of P3,000.00. 

The usual route to Caba, La Union was through Carmen, Pangasinan. However, the bridge at Carmen was under repair, so that petitioner Cabil, who was unfamiliar with the area (it being his first trip to La Union), was forced to take a detour through the town of Ba-ay in Lingayen, Pangasinan. At 11:30 that night, petitioner Cabil came upon a sharp curve on the highway. The road was slippery because it was raining, causing the bus, which was running at the speed of 50 kilometers per hour, to skid to the left road shoulder. The bus hit the left traffic steel brace and sign along the road and rammed the fence of one Jesus Escano, then turned over and landed on its left side, coming to a full stop only after a series of impacts. The bus came to rest off the road. A coconut tree which it had hit fell on it and smashed its front portion. Because of the mishap, several passengers were injured particularly Amyline Antonio. 

Criminal complaint was filed against the driver and the spouses were also made jointly liable. Spouses Fabre on the other hand contended that they are not liable since they are not a common carrier. The RTC of Makati ruled in favor of the plaintiff and the defendants were ordered to pay jointly and severally to the plaintiffs. The Court of Appeals affirmed the decision of the trial court. 

Issue: Whether the spouses Fabre are common carriers? 

Held: Petition was denied. Spouses Fabre are common carriers. 

The Supreme Court held that this case actually involves a contract of carriage. Petitioners, the Fabres, did not have to be engaged in the business of public transportation for the provisions of the Civil Code on common carriers to apply to them. As this Court has held: 10 Art. 1732, Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public. 

The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity (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. We think that Article 1732 deliberately refrained from making such distinctions.

FGU Insurance Corporation vs. G.P. Sarmiento Trucking Corporation and Lambert Eroles

FACTS:G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on June 18, 1994, 30 units of Condura S.D. white

refrigerators aboard its Isuzu truck driven by Lambert Eroles, to the Central Luzon Appliances in Dagupan City. While traversing the North Diversion Road along McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes.FGU, an insurer of the shipment, paid the value of the covered cargoes (P204,450.00) to Concepcion Industries, Inc.,. Being subrogee of CII’s rights & interests, FGU, in turn, sought reimbursement from GPS. Since GPS failed to heed the claim, FGU filed a complaint for damages & breach of contract of carriage against GPS and Eroles with the RTC. In its answer, respondents asserted that GPS was only the exclusive hauler of CII since 1988, and it was not so engaged in business as a common carrier. Respondents further claimed that the cause of damage was purely accidental.GPS filed a motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed to prove that it was a common carrier.The RTC granted the motion to dismiss on April 30, 1996. It subsequently dismissed the complaint holding that GPS was not a common carrier defined under the law & existing jurisprudence. The subsequent motion for reconsideration having been denied, FGU interposed an appeal to the CA. The CA rejected the FGU’s appeal & ruled in favor of GPS. It also denied petitioner’s motion for reconsideration.

ISSUES:1. WON GPS may be considered a common carrier as defined under the law & existing jurisprudence.2. WON GPS, either as a common carrier or a private carrier, may be presumed to have been negligent when the goods it undertook to transport safely were subsequently damaged while in its protective custody &

possession.3. Whether the doctrine of Res ipsa loquitur is applicable in the instant case.

HELD:1. The SC finds the conclusion of the RTC and the CA to be amply justified. GPS, being an exclusive contractor & hauler of Concepcion Industries, Inc., rendering/offering its services to no other individual or entity, cannot be considered a common carrier. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for hire or compensation, offering their services to the public, whether to the public in general or to a limited clientele in particular, but never on an exclusive basis. The true test of a common carrier is the carriage of passengers/goods, providing space for those who opt to avail themselves of its transportation service for a fee. Given accepted standards, GPS scarcely falls within the term “common carrier.”2. GPS cannot escape from liability. In culpa contractual, the mere proof of the existence of the contract & the failure of its compliance justify, prima facie, a corresponding right of relief. The law will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost/suffered. The remedy serves to preserve the interests of the promisee that may include his:1. Expectation interest – interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed;2. Reliance interest – interest in being reimbursed for loss caused by reliance on the contract by being put in

as good a position as he would have been in had the contract not been made;3. Restitution interest – interest in having restored to him any benefit that he has conferred on the other party.Agreements can accomplish little unless they are made the basis for action. The effect of every infraction is to create a new duty, or to make recompense to the one who has been injured by the failure of another to observe his contractual obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence (normally that of the diligence of a good father of a family or, exceptionally by stipulation or by law such as in the case of common carriers, that of extraordinary diligence) or of the attendance of fortuitous event, to excuse him from his ensuing liability.A default on, or failure of compliance with, the obligation gives rise to a presumption of lack of care & corresponding liability on the part of the contractual obligor the burden being on him to establish otherwise. GPS has failed to do so.Eroles, on the other hand, may not be ordered to pay petitioner without concrete proof of his negligence/fault. The driver, not being a party to the contract of carriage between petitioner’s principal and defendant, may not be held liable under the agreement. A contract can only bind the parties who have entered into it or their successors who have assumed their personality/juridical position. Consonantly with the axiom res inter alios acta aliis neque nocet prodest, such contract can neither favor nor prejudice a third person. Petitioner’s civil action against the driver can only be based on culpa aquiliana, which would require the claimant for damages to prove the defendant’s negligence/fault.3. Res ipsa loquitur holds a defendant liable where the thing which caused the injury complained of is shown to

be under the latter’s management and the accident is such that, in the ordinary course of things, cannot be expected to happen if those who have its management/control use proper care. In the absence of the defendant’s explanation, it affords reasonable evidence that the accident arose from want of care. It is not a rule of substantive law and does not create an independent ground of liability. Instead, it is regarded as a mode of proof, or a mere procedural convenience since it furnishes a substitute for, and relieves the plaintiff of, the burden of producing specific proof of negligence. The maxim simply places the burden of going forward with the proof on the defendant.However, resort to the doctrine may only be allowed when:(a) the event is of a kind which does not ordinarily occur in the absence of negligence;(b) other responsible causes are sufficiently eliminated by the evidence (includes the conduct of the plaintiff and third persons); and(c) the indicated negligence is within the scope of the defendant’s duty to the plaintiff.Thus, it is not applicable when an unexplained accident may be attributable to one of several causes, for some of which the defendant could not be responsible.Res ipsa loquitur generally finds relevance whether or not a contractual relationship exists between the plaintiff and the defendant, for the inference of negligence arises from the circumstances and nature of the occurrence and not from the nature of the relation of the parties. Nevertheless,for the doctrine to apply, the requirement that responsible causes (other than those due to defendant’s conduct) must first be eliminated should be understood as being confined only to cases of pure (non-contractual) tort since obviously the presumption of negligence in culpa contractual immediately attaches by a failure of the covenant or its

tenor.On the other hand, while the truck driver, whose civil liability is predicated on culpa acquiliana, can be said to have been in control & management of the vehicle, it is not equally shown that the accident has been exclusively due to his negligence. If it were so, the negligence could allow res ipsa loquitur to properly work against him. However, clearly this is not the case.

G & S Transport Corporation vs. Heirs of Jose Marcial K. Ochoa namely Ruby B. Ochoa, Micaela B. Ochoa and Jomar B. Ochoa

FACTS:Jose Marcial K. Ochoa, husband of respondent Ruby B. Ochoa, died on the night of March 10, 1995 while on board an Avis taxicab owned and operated by G & S Transport Corporation, petitioner-common carrier. Ruby Ochoa and her children, Micaela and Jomar, through counsel, filed a complaint against G & S for damages before the Regional Trial Court (RTC) of Pasig City which was raffled to Branch 164 of said court.

On December 27, 2001, the trial court rendered a Decision finding the vehicular mishap caused by the negligence of Bibiano Padilla, the driver. It likewise found the evidence adduced by G & S to show that it exercised the diligence of a good father of a family in the selection and supervision of its employees as insufficient. Hence, the trial court declared G & S civilly liable to the heirs. However, for lack of receipts or any proof of funeral expenses and other actual damages, the trial court denied the heirs’ claim for actual damages, moral and exemplary damages for lack of legal basis.

G & S filed a Notice of Appeal while the heirs filed a Motion for PartialReconsideration. After G & S filed its Opposition (To Plaintiffs’ Motion for Partial Reconsideration), the trial court favored the heirs’ Motion for Partial Reconsideration and thus declared them entitled to moral and exemplary damages. Padilla was convicted of reckless imprudence resulting to homicide in an MTC Decision but was later on acquitted in the RTC Decision. Before the CA, G & S continued to insist that it exercised the diligence of a good father of the family in the selection and supervision of its employees. G & S also argued that the proximate cause of Jose Marcial’s death is a fortuitous event and/or the fault or negligence of another and not of its employee.

On the other hand, the heirs maintained that Padilla was grossly negligent in driving the Avis taxicab on the night of March 10, 1995. In a Decision dated June 29, 2005, the CA ruled in favor of the heirs. With respect to the award of P6,537,244.96 for Jose Marcial’s loss of earning capacity, the CA declared the same unwarranted. It found the Certification issued by Jose Marcial’s employer as self-serving, unreliable, and biased. Anent moral damages, the CA reduced it to P200,000.00 as to make it proportionate to the award of exemplary damages which is P50,000.00. CA denied both parties’ respective motions for reconsideration.Hence, G & S and the heirs filed their respective Petitions for Review on Certiorari before the Supreme Court. The heirs’ petition was docketed as G.R. No. 170071 and that of G & S as G.R. No. 170125. These petitions were later consolidated pursuant to this Court’s Resolution of November 21, 2005.One of the grounds in the petition of G & S is that CA gravely erred in not taking note of the fact that the

petitioner’s employee had been acquitted of the crime of reckless imprudence resulting (in) homicide.

Issue: Did the Court of Appeals made an error by not taking note of the fact that Padilla, an employee of the petitioner, has been acquitted of the crime of reckless imprudence resulting in homicide?

Held: NO. According to Article 31 of the Civil Code of the Philippines, “When the civil action is based on an obligation not arising from the act or omission complained of as a felony, such civil action may proceed independently of the criminal proceedings and regardless of the result of the latter.” The Supreme Court decided that “in this case, the action filed by the heirs is primarily for the recovery of damages arising from breach of contract of carriage allegedly committed by G & S.” The Court further said that “As a common carrier, G & S ‘is bound to carry [Jose Marcial] safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances’.” However, Jose Marcial did not reach his destination due to the accident and G & S failed to prove that it exercised diligence, thereby making it liable to the heirs of Jose Marcial for breach of contract of carriage. Clearly, it is an independent civil action arising from contract which is separate and distinct from the criminal action for reckless imprudence resulting in homicide filed by the heirs against Padilla by reason of the same incident. Hence, regardless of Padilla’s acquittal or conviction in said criminal case, same has no bearing in the resolution of the present case. There was therefore no error on the part of the CA when it resolved this case without regard to the fact that Padilla has already been acquitted by the RTC in the criminal case. Moreover, while the

CA quoted some portions of the MTC Decision in said criminal case, we however find that those quoted portions were only meant to belie G & S’ claim that the proximate cause of the accident was the negligence of the driver of the delivery van which allegedly hit the Avis taxicab. Even without those quoted portions, the appellate court’s ultimate finding that it was Padilla’s negligence which was the proximate cause of the mishap would still be the same. This is because the CA has, in fact, already made this declaration in the earlier part of its assailed Decision. The fact that the MTC Decision from which the subject quoted portions were lifted has already been reversed by the RTC is therefore immaterial.