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Transportation Case Digest: Phil Am Gen Insurance Co, et al. v. PKS Shipping Co (2003)

G.R. No. 149038           April 9, 2003
Lessons Applicable: Charter Party (Transportation)

  • Davao Union Marketing Corporation (DUMC) contracted the services of PKS Shipping Company (PKS Shipping) for the shipment to Tacloban City of 75,000 bags of cement worth P3,375,000. 
  • DUMC insured the goods for its full value with Philippine American General Insurance Company (Philamgen). 
  • The goods were loaded aboard the dumb barge Limar I belonging to PKS Shipping.
  • December 22, 1988 9 pm: While Limar I was being towed by PKS’ tugboat MT Iron Eagle, the barge sank a couple of miles off the coast of Dumagasa Point, in Zamboanga del Sur, bringing down with it the entire cargo of 75,000 bags of cement.
  • DUMC filed a formal claim with Philamgen for the full amount of the insurance.  Philamgen promptly made payment; it then sought reimbursement from PKS Shipping of the sum paid to DUMC but the shipping company refused to pay so Philamgen to file suit against PKS Shipping 
  • RTC: dismissed the complaint - fortuitous event
  • CA:Affirmed - not a common carrier but a casual occupation
ISSUE: W/N PKS Shipping is NOT liable since it was NOT a common carrier

HELD: NO. Petition is DENIED

Article 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
  • Complementary is Section 13, paragraph (b), of the Public Service Act

public service" to be –
"x x x every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, subway motor vehicle, either for freight or passenger, or both, with or without fixed route and whatever may be its classification, freight or carrier service of any class, express service, steamboat, or steamship, or steamship line, pontines, ferries and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power petroleum, sewerage system, wire or wireless communication systems, wire or wireless broadcasting stations and other similar public services
  • So understood, the concept of `common carrier’ under Article 1732 may be seen to coincide neatly with the notion of `public service,’ under the Public Service Act
  • distinction between:
    • common or public carrier
    • private or special carrier - character of the business, such that if the undertaking is an isolated transaction , not a part of the business or occupation, and the carrier does not hold itself out to carry the goods for the general public or to a limited clientele, although involving the carriage of goods for a fee
      • EX: charter party which includes both the vessel and its crew, such as in a bareboat or demise, where the charterer obtains the use and service of all or some part of a ship for a period of time or a voyage or voyages and gets the control of the vessel and its crew.
  • The regularity of its activities in this area indicates more than just a casual activity on its part
  • The appellate court ruled, gathered from the testimonies and sworn marine protests of the respective vessel masters ofLimar I and MT Iron Eagle, that there was no way by which the barge’s or the tugboat’s crew could have prevented the sinking of Limar I. The vessel was suddenly tossed by waves of extraordinary height of 6 to 8 feet and buffeted by strong winds of 1.5 knots resulting in the entry of water into the barge’s hatches. The official Certificate of Inspection of the barge issued by the Philippine Coastguard and the Coastwise Load Line Certificate would attest to the seaworthiness of Limar I and should strengthen the factual findings of the appellate court.
  • Findings of fact of the Court of Appeals generally conclude this Court; none of the recognized exceptions from the rule - (1) when the factual findings of the Court of Appeals and the trial court are contradictory; (2) when the conclusion is a finding grounded entirely on speculation, surmises, or conjectures; (3) when the inference made by the Court of Appeals from its findings of fact is manifestly mistaken, absurd, or impossible; (4) when there is a grave abuse of discretion in the appreciation of facts; (5) when the appellate court, in making its findings, went beyond the issues of the case and such findings are contrary to the admissions of both appellant and appellee; (6) when the judgment of the Court of Appeals is premised on a misapprehension of facts; (7) when the Court of Appeals failed to notice certain relevant facts which, if properly considered, would justify a different conclusion; (8) when the findings of fact are themselves conflicting; (9) when the findings of fact are conclusions without citation of the specific evidence on which they are based; and (10) when the findings of fact of the Court of Appeals are premised on the absence of evidence but such findings are contradicted by the evidence on record – would appear to be clearly extant in this instance.