Case Summary (G.R. No. 149038)
Procedural History
Philamgen filed suit for damages before the Makati RTC, which dismissed the complaint, finding that the cargo loss could have resulted from a fortuitous event or negligence, and that under Article 587 of the Code of Commerce the shipowner had limited liability by abandoning the vessel. On appeal, the Court of Appeals affirmed, ruling that PKS Shipping was not a common carrier and that the sinking constituted a fortuitous event exempting it from liability. Philamgen then elevated the case to the Supreme Court via Rule 45.
Issue on Common vs. Private Carrier
Central to liability is whether PKS Shipping is a common carrier, subject to the extraordinary diligence standard, or a private carrier, bound only by ordinary diligence. The appellate courts concluded that PKS Shipping’s transport services were casual and to a limited clientele, characterizing it as a private carrier. Philamgen challenged this, arguing that a limited clientele does not remove a carrier from common‐carrier status under Article 1732 of the Civil Code and Section 13(b) of the Public Service Act.
Criteria for Common Carriership
Article 1732 defines common carriers as entities engaged in transporting goods for compensation, offering services to the public, whether generally or to a limited clientele, and whether on a regular or occasional basis. Section 13(b) of the Public Service Act reinforces that common‐carrier status does not depend on the scope of clientele or frequency of service. Jurisprudence holds that carriers offering transport as part of their business, even episodically or to a narrow segment, qualify as common carriers.
Assessment of Carrier’s Diligence
Under Article 1733, common carriers owe extraordinary diligence to the goods in their custody and are presumed negligent in case of loss, with the burden shifted to them to prove otherwise. Exemptions from liability under Article 1734 include natural disasters, acts of public enemies, shipper’s fault, defects in packaging, and acts of public authorities.
Court’s Analysis and Findings
The Supreme Court found that PKS Shipping engaged in the business of carrying goods for hire, undertaking voyages for a consistent, if limited, clientele. Regularity of operations and the testimony of its long‐serving tugmaster indicated more than a casual sideline. Consequently, PKS Shipping qualified as a commo
...continue readingCase Syllabus (G.R. No. 149038)
Facts of the Case
- Davao Union Marketing Corporation (DUMC) contracted PKS Shipping Company for the maritime transport of 75,000 bags of cement worth ₱3,375,000.00 from Davao to Tacloban City.
- DUMC insured the full value of the cement with Philippine American General Insurance Company (Philamgen).
- The cement was loaded aboard the dumb barge Limar I, owned by PKS Shipping, and being towed by the tug MT Iron Eagle.
- On the evening of 22 December 1988, about 9:00 p.m., the barge sank a few miles off Dumagasa Point, Zamboanga del Sur, resulting in total loss of the cargo.
Procedural History
- DUMC filed a formal claim with Philamgen, which paid out the full insured amount and then sought reimbursement from PKS Shipping.
- Philamgen filed suit against PKS Shipping in RTC, Makati, Branch 65, for recovery of the sum paid.
- The RTC dismissed the complaint, finding that (a) the total loss could have been caused by a fortuitous event, and (b) under Article 587 of the Code of Commerce, the shipowner was entitled to limit its liability.
- Philamgen appealed to the Court of Appeals (C.A. G.R. CV No. 56470), which affirmed the RTC decision in toto on 25 June 2001.
- Philamgen filed a petition for review under Rule 45 before the Supreme Court, alleging error in (a) classifying PKS Shipping as a private carrier, and (b) absolving it of liability.
Legal Issues
- Whether PKS Shipping is a common carrier or a private carrier under Philippine law.
- What standard of diligence (extraordinary vs. ordinary) applies to PKS Shipping in the transport of goods.
- Whether the sinking of Limar I was a fortuitous event exempting PKS Shipping from liability.
- Whether the factual findings of the Court of Appeals on sea conditions and vessel seaworthiness are binding and free from reversible error.