G.R. No.

L-47822 December 22, 1988

PEDRO DE GUZMAN, petitioner,

Vicente D. Millora for petitioner.

Jacinto Callanta for private respondent.

FELICIANO, J.:

Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used bottles and scrap metal in
Pangasinan. Upon gathering sufficient quantities of such scrap material, respondent would bring such
material to Manila for resale. He utilized two (2) six-wheeler trucks which he owned for hauling the
material to Manila. On the return trip to Pangasinan, respondent would load his vehicles with cargo
which various merchants wanted delivered to differing establishments in Pangasinan. For that service,
respondent charged freight rates which were commonly lower than regular commercial rates.

Sometime in November 1970, petitioner Pedro de Guzman a merchant and authorized dealer of General
Milk Company (Philippines), Inc. in Urdaneta, Pangasinan, contracted with respondent for the hauling of
750 cartons of Liberty filled milk from a warehouse of General Milk in Makati, Rizal, to petitioner's
establishment in Urdaneta on or before 4 December 1970. Accordingly, on 1 December 1970,
respondent loaded in Makati the merchandise on to his trucks: 150 cartons were loaded on a truck
driven by respondent himself, while 600 cartons were placed on board the other truck which was driven
by Manuel Estrada, respondent's driver and employee.

Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes never reached
petitioner, since the truck which carried these boxes was hijacked somewhere along the MacArthur
Highway in Paniqui, Tarlac, by armed men who took with them the truck, its driver, his helper and the
cargo.

On 6 January 1971, petitioner commenced action against private respondent in the Court of First
Instance of Pangasinan, demanding payment of P 22,150.00, the claimed value of the lost merchandise,
plus damages and attorney's fees. Petitioner argued that private respondent, being a common carrier,
and having failed to exercise the extraordinary diligence required of him by the law, should be held
liable for the value of the undelivered goods.

In his Answer, private respondent denied that he was a common carrier and argued that he could not be
held responsible for the value of the lost goods, such loss having been due to force majeure.

On 10 December 1975, the trial court rendered a Decision 1 finding private respondent to be a common
carrier and holding him liable for the value of the undelivered goods (P 22,150.00) as well as for P
4,000.00 as damages and P 2,000.00 as attorney's fees.

On appeal before the Court of Appeals, respondent urged that the trial court had erred in considering
him a common carrier; in finding that he had habitually offered trucking services to the public; in not
exempting him from liability on the ground of force majeure; and in ordering him to pay damages and
attorney's fees.

The Court of Appeals reversed the judgment of the trial court and held that respondent had been
engaged in transporting return loads of freight "as a casual
occupation — a sideline to his scrap iron business" and not as a common carrier. Petitioner came to this
Court by way of a Petition for Review assigning as errors the following conclusions of the Court of
Appeals:

1. that private respondent was not a common carrier;

2. that the hijacking of respondent's truck was force majeure; and

3. that respondent was not liable for the value of the undelivered cargo. (Rollo, p. 111)

We consider first the issue of whether or not private respondent Ernesto Cendana may, under the facts
earlier set forth, be properly characterized as a common carrier.

The Civil Code defines "common carriers" in the following terms:

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.

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 1733 deliberaom making such distinctions.

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 (Commonwealth Act No. 1416, as amended)
which at least partially supplements the law on common carriers set forth in the Civil Code. Under
Section 13, paragraph (b) of the Public Service Act, "public service" includes:

... 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, traction 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
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 communications systems, wire or wireless
broadcasting stations and other similar public services. ... (Emphasis supplied)
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
back-hauling 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.

The Court of Appeals referred to the fact that private respondent held no certificate of public
convenience, and concluded he was not a common carrier. This is palpable error. A certificate of public
convenience is not a requisite for the incurring of liability under the Civil Code provisions governing
common carriers. That liability arises the moment a person or firm acts as a common carrier, without
regard to whether or not such carrier has also complied with the requirements of the applicable
regulatory statute and implementing regulations and has been granted a certificate of public
convenience or other franchise. To exempt private respondent from the liabilities of a common carrier
because he has not secured the necessary certificate of public convenience, would be offensive to sound
public policy; that would be to reward private respondent precisely for failing to comply with applicable
statutory requirements. The business of a common carrier impinges directly and intimately upon the
safety and well being and property of those members of the general community who happen to deal
with such carrier. The law imposes duties and liabilities upon common carriers for the safety and
protection of those who utilize their services and the law cannot allow a common carrier to render such
duties and liabilities merely facultative by simply failing to obtain the necessary permits and
authorizations.

We turn then to the liability of private respondent as a common carrier.

Common carriers, "by the nature of their business and for reasons of public policy" 2 are held to a very
high degree of care and diligence ("extraordinary diligence") in the carriage of goods as well as of
passengers. The specific import of extraordinary diligence in the care of goods transported by a common
carrier is, according to Article 1733, "further expressed in Articles 1734,1735 and 1745, numbers 5, 6
and 7" of the Civil Code.

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:

(1) Flood, storm, earthquake, lightning or other natural disaster or calamity;

It is important to point out that the above list of causes of loss, destruction or deterioration which
exempt the common carrier for responsibility therefor, is a closed list. Causes falling outside the
foregoing list, even if they appear to constitute a species of force majeure fall within the scope of Article
1735, which provides as follows:
In all cases other than those mentioned in numbers 1, 2, 3, 4 and 5 of the preceding article, if the goods
are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed extraordinary diligence as required in Article
1733. (Emphasis supplied)

Applying the above-quoted Articles 1734 and 1735, we note firstly that the specific cause alleged in the
instant case — the hijacking of the carrier's truck — does not fall within any of the five (5) categories of
exempting causes listed in Article 1734. It would follow, therefore, that the hijacking of the carrier's
vehicle must be dealt with under the provisions of Article 1735, in other words, that the 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.

Petitioner insists that private respondent had not observed extraordinary diligence in the care of
petitioner's goods. Petitioner argues that in the circumstances of this case, private respondent should
have hired a security guard presumably to ride with the truck carrying the 600 cartons of Liberty filled
milk. We do not believe, however, that in the instant case, the standard of extraordinary diligence
required private respondent to retain a security guard to ride with the truck and to engage brigands in a
firelight at the risk of his own life and the lives of the driver and his helper.

The precise issue that we address here relates to the specific requirements of the duty of extraordinary
diligence in the vigilance over the goods carried in the specific context of hijacking or armed robbery.

As noted earlier, the duty of extraordinary diligence in the vigilance over goods is, under Article 1733,
given additional specification not only by Articles 1734 and 1735 but also by Article 1745, numbers 4, 5
and 6, Article 1745 provides in relevant part:

Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to
public policy:

xxx xxx xxx

(5) that the common carrier shall not be responsible for the acts or omissions of his or its employees;

(6) that the common carrier's liability for acts committed by thieves, or of robbers who do not act with
grave or irresistible threat, violence or force, is dispensed with or diminished; and

(7) that the common carrier shall not responsible for the loss, destruction or deterioration of goods on
account of the defective condition of the car vehicle, ship, airplane or other equipment used in the
contract of carriage. (Emphasis supplied)

Under Article 1745 (6) above, a common carrier is held responsible — and will not be allowed to divest
or to diminish such responsibility — even for acts of strangers like thieves or robbers, except where such
thieves or robbers in fact acted "with grave or irresistible threat, violence or force." 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."
In the instant case, armed men held up the second truck owned by private respondent which carried
petitioner's cargo. The record shows that an information for robbery in band was filed in the Court of
First Instance of Tarlac, Branch 2, in Criminal Case No. 198 entitled "People of the Philippines v. Felipe
Boncorno, Napoleon Presno, Armando Mesina, Oscar Oria and one John Doe." There, the accused were
charged with willfully and unlawfully taking and carrying away with them the second truck, driven by
Manuel Estrada and loaded with the 600 cartons of Liberty filled milk destined for delivery at
petitioner's store in Urdaneta, Pangasinan. The decision of the trial court shows that the accused acted
with grave, if not irresistible, threat, violence or force.3 Three (3) of the five (5) hold-uppers were armed
with firearms. The robbers not only took away the truck and its cargo but also kidnapped the driver and
his helper, detaining them for several days and later releasing them in another province (in Zambales).
The hijacked truck was subsequently found by the police in Quezon City. The Court of First Instance
convicted all the accused of robbery, though not of robbery in band. 4

In these circumstances, 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.

We, therefore, agree with the result reached by the Court of Appeals that private respondent Cendana
is not liable for the value of the undelivered merchandise which was lost because of an event entirely
beyond private respondent's control.

ACCORDINGLY, the Petition for Review on certiorari is hereby DENIED and the Decision of the Court of
Appeals dated 3 August 1977 is AFFIRMED. No pronouncement as to costs.

G.R. No. 101503 September 15, 1993

PLANTERS PRODUCTS, INC., petitioner,

Gonzales, Sinense, Jimenez & Associates for petitioner.

Siguion Reyna, Montecillo & Ongsiako Law Office for private respondents.

BELLOSILLO, J.:

Does a charter-party1 between a shipowner and a charterer transform a common carrier into a private
one as to negate the civil law presumption of negligence in case of loss or damage to its cargo?

Planters Products, Inc. (PPI), purchased from Mitsubishi International Corporation (MITSUBISHI) of New
York, U.S.A., 9,329.7069 metric tons (M/T) of Urea 46% fertilizer which the latter shipped in bulk on 16
June 1974 aboard the cargo vessel M/V "Sun Plum" owned by private respondent Kyosei Kisen Kabushiki
Kaisha (KKKK) from Kenai, Alaska, U.S.A., to Poro Point, San Fernando, La Union, Philippines, as
evidenced by Bill of Lading No. KP-1 signed by the master of the vessel and issued on the date of
departure.

On 17 May 1974, or prior to its voyage, a time charter-party on the vessel M/V "Sun Plum" pursuant to
the Uniform General Charter2 was entered into between Mitsubishi as shipper/charterer and KKKK as
shipowner, in Tokyo, Japan.3 Riders to the aforesaid charter-party starting from par. 16 to 40 were
attached to the pre-printed agreement. Addenda Nos. 1, 2, 3 and 4 to the charter-party were also
subsequently entered into on the 18th, 20th, 21st and 27th of May 1974, respectively.

Before loading the fertilizer aboard the vessel, four (4) of her holds4 were all presumably inspected by
the charterer's representative and found fit to take a load of urea in bulk pursuant to par. 16 of the
charter-party which reads:

16. . . . At loading port, notice of readiness to be accomplished by certificate from National Cargo Bureau
inspector or substitute appointed by charterers for his account certifying the vessel's readiness to
receive cargo spaces. The vessel's hold to be properly swept, cleaned and dried at the vessel's expense
and the vessel to be presented clean for use in bulk to the satisfaction of the inspector before daytime
commences. (emphasis supplied)

After the Urea fertilizer was loaded in bulk by stevedores hired by and under the supervision of the
shipper, the steel hatches were closed with heavy iron lids, covered with three (3) layers of tarpaulin,
then tied with steel bonds. The hatches remained closed and tightly sealed throughout the entire
voyage.5

Upon arrival of the vessel at her port of call on 3 July 1974, the steel pontoon hatches were opened with
the use of the vessel's boom. Petitioner unloaded the cargo from the holds into its steelbodied dump
trucks which were parked alongside the berth, using metal scoops attached to the ship, pursuant to the
terms and conditions of the charter-partly (which provided for an F.I.O.S. clause).6 The hatches
remained open throughout the duration of the discharge.7

Each time a dump truck was filled up, its load of Urea was covered with tarpaulin before it was
transported to the consignee's warehouse located some fifty (50) meters from the wharf. Midway to the
warehouse, the trucks were made to pass through a weighing scale where they were individually
weighed for the purpose of ascertaining the net weight of the cargo. The port area was windy, certain
portions of the route to the warehouse were sandy and the weather was variable, raining occasionally
while the discharge was in progress.8 The petitioner's warehouse was made of corrugated galvanized
iron (GI) sheets, with an opening at the front where the dump trucks entered and unloaded the fertilizer
on the warehouse floor. Tarpaulins and GI sheets were placed in-between and alongside the trucks to
contain spillages of the ferilizer.9

It took eleven (11) days for PPI to unload the cargo, from 5 July to 18 July 1974 (except July 12th, 14th
and 18th).10 A private marine and cargo surveyor, Cargo Superintendents Company Inc. (CSCI), was
hired by PPI to determine the "outturn" of the cargo shipped, by taking draft readings of the vessel prior
to and after discharge. 11 The survey report submitted by CSCI to the consignee (PPI) dated 19 July 1974
revealed a shortage in the cargo of 106.726 M/T and that a portion of the Urea fertilizer approximating
18 M/T was contaminated with dirt. The same results were contained in a Certificate of
Shortage/Damaged Cargo dated 18 July 1974 prepared by PPI which showed that the cargo delivered
was indeed short of 94.839 M/T and about 23 M/T were rendered unfit for commerce, having been
polluted with sand, rust and
dirt. 12

Consequently, PPI sent a claim letter dated 18 December 1974 to Soriamont Steamship Agencies (SSA),
the resident agent of the carrier, KKKK, for P245,969.31 representing the cost of the alleged shortage in
the goods shipped and the diminution in value of that portion said to have been contaminated with dirt.
13

Respondent SSA explained that they were not able to respond to the consignee's claim for payment
because, according to them, what they received was just a request for shortlanded certificate and not a
formal claim, and that this "request" was denied by them because they "had nothing to do with the
discharge of the shipment." 14 Hence, on 18 July 1975, PPI filed an action for damages with the Court of
First Instance of Manila. The defendant carrier argued that the strict public policy governing common
carriers does not apply to them because they have become private carriers by reason of the provisions
of the charter-party. The court a quo however sustained the claim of the plaintiff against the defendant
carrier for the value of the goods lost or damaged when it ruled thus: 15

. . . Prescinding from the provision of the law that a common carrier is presumed negligent in case of loss
or damage of the goods it contracts to transport, all that a shipper has to do in a suit to recover for loss
or damage is to show receipt by the carrier of the goods and to delivery by it of less than what it
received. After that, the burden of proving that the loss or damage was due to any of the causes which
exempt him from liability is shipted to the carrier, common or private he may be. Even if the provisions of
the charter-party aforequoted are deemed valid, and the defendants considered private carriers, it was
still incumbent upon them to prove that the shortage or contamination sustained by the cargo is
attributable to the fault or negligence on the part of the shipper or consignee in the loading, stowing,
trimming and discharge of the cargo. This they failed to do. By this omission, coupled with their failure
to destroy the presumption of negligence against them, the defendants are liable (emphasis supplied).

On appeal, respondent Court of Appeals reversed the lower court and absolved the carrier from liability
for the value of the cargo that was lost or damaged. 16 Relying on the 1968 case of Home Insurance Co.
v. American Steamship Agencies, Inc.,17 the appellate court ruled that the cargo vessel M/V "Sun Plum"
owned by private respondent KKKK was a private carrier and not a common carrier by reason of the time
charterer-party. Accordingly, the Civil Code provisions on common carriers which set forth a
presumption of negligence do not find application in the case at bar. Thus —

. . . In the absence of such presumption, it was incumbent upon the plaintiff-appellee to adduce
sufficient evidence to prove the negligence of the defendant carrier as alleged in its complaint. It is an old
and well settled rule that if the plaintiff, upon whom rests the burden of proving his cause of action, fails
to show in a satisfactory manner the facts upon which he bases his claim, the defendant is under no
obligation to prove his exception or defense (Moran, Commentaries on the Rules of Court, Volume 6, p.
2, citing Belen v. Belen, 13 Phil. 202).

But, the record shows that the plaintiff-appellee dismally failed to prove the basis of its cause of action,
i.e. the alleged negligence of defendant carrier. It appears that the plaintiff was under the impression
that it did not have to establish defendant's negligence. Be that as it may, contrary to the trial court's
finding, the record of the instant case discloses ample evidence showing that defendant carrier was not
negligent in performing its obligation . . . 18 (emphasis supplied).

Petitioner PPI appeals to us by way of a petition for review assailing the decision of the Court of Appeals.
Petitioner theorizes that the Home Insurance case has no bearing on the present controversy because
the issue raised therein is the validity of a stipulation in the charter-party delimiting the liability of the
shipowner for loss or damage to goods cause by want of due deligence on its part or that of its manager
to make the vessel seaworthy in all respects, and not whether the presumption of negligence provided
under the Civil Code applies only to common carriers and not to private carriers. 19 Petitioner further
argues that since the possession and control of the vessel remain with the shipowner, absent any
stipulation to the contrary, such shipowner should made liable for the negligence of the captain and
crew. In fine, PPI faults the appellate court in not applying the presumption of negligence against
respondent carrier, and instead shifting the onus probandi on the shipper to show want of due deligence
on the part of the carrier, when he was not even at hand to witness what transpired during the entire
voyage.

As earlier stated, the primordial issue here is whether a common carrier becomes a private carrier by
reason of a charter-party; in the negative, whether the shipowner in the instant case was able to prove
that he had exercised that degree of diligence required of him under the law.

It is said that etymology is the basis of reliable judicial decisions in commercial cases. This being so, we
find it fitting to first define important terms which are relevant to our discussion.

A "charter-party" is defined as a contract by which an entire ship, or some principal part thereof, is let by
the owner to another person for a specified time or use; 20 a contract of affreightment by which the
owner of a ship or other vessel lets the whole or a part of her to a merchant or other person for the
conveyance of goods, on a particular voyage, in consideration of the payment of freight; 21 Charter
parties are of two types: (a) contract of affreightment which involves the use of shipping space on
vessels leased by the owner in part or as a whole, to carry goods for others; and, (b) charter by demise
or bareboat charter, by the terms of which the whole vessel is let to the charterer with a transfer to him
of its entire command and possession and consequent control over its navigation, including the master
and the crew, who are his servants. Contract of affreightment may either be time charter, wherein the
vessel is leased to the charterer for a fixed period of time, or voyage charter, wherein the ship is leased
for a single voyage. 22 In both cases, the charter-party provides for the hire of vessel only, either for a
determinate period of time or for a single or consecutive voyage, the shipowner to supply the ship's
stores, pay for the wages of the master and the crew, and defray the expenses for the maintenance of
the ship.

Upon the other hand, the term "common or public carrier" is defined in Art. 1732 of the Civil Code. 23
The definition extends to carriers either by land, air or water which hold themselves out as ready to
engage in carrying goods or transporting passengers or both for compensation as a public employment
and not as a casual occupation. The distinction between a "common or public carrier" and a "private or
special carrier" lies in the character of the business, such that if the undertaking is a single transaction,
not a part of the general business or occupation, although involving the carriage of goods for a fee, the
person or corporation offering such service is a private carrier. 24
Article 1733 of the New Civil Code mandates that common carriers, by reason of the nature of their
business, should observe extraordinary diligence in the vigilance over the goods they carry.25 In the
case of private carriers, however, the exercise of ordinary diligence in the carriage of goods will suffice.
Moreover, in the case of loss, destruction or deterioration of the goods, common carriers are presumed
to have been at fault or to have acted negligently, and the burden of proving otherwise rests on them.26
On the contrary, no such presumption applies to private carriers, for whosoever alleges damage to or
deterioration of the goods carried has the onus of proving that the cause was the negligence of the
carrier.

It is not disputed that respondent carrier, in the ordinary course of business, operates as a common
carrier, transporting goods indiscriminately for all persons. When petitioner chartered the vessel M/V
"Sun Plum", the ship captain, its officers and compliment were under the employ of the shipowner and
therefore continued to be under its direct supervision and control. Hardly then can we charge the
charterer, a stranger to the crew and to the ship, with the duty of caring for his cargo when the
charterer did not have any control of the means in doing so. This is evident in the present case
considering that the steering of the ship, the manning of the decks, the determination of the course of
the voyage and other technical incidents of maritime navigation were all consigned to the officers and
crew who were screened, chosen and hired by the shipowner. 27

It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter of the
whole or portion of a vessel by one or more persons, provided the charter is limited to the ship only, as
in the case of a time-charter or voyage-charter. It is only when the charter includes both the vessel and
its crew, as in a bareboat or demise that a common carrier becomes private, at least insofar as the
particular voyage covering the charter-party is concerned. Indubitably, a shipowner in a time or voyage
charter retains possession and control of the ship, although her holds may, for the moment, be the
property of the charterer. 28

Respondent carrier's heavy reliance on the case of Home Insurance Co. v. American Steamship Agencies,
supra, is misplaced for the reason that the meat of the controversy therein was the validity of a
stipulation in the charter-party exempting the shipowners from liability for loss due to the negligence of
its agent, and not the effects of a special charter on common carriers. At any rate, the rule in the United
States that a ship chartered by a single shipper to carry special cargo is not a common carrier, 29 does
not find application in our jurisdiction, for we have observed that the growing concern for safety in the
transportation of passengers and /or carriage of goods by sea requires a more exacting interpretation of
admiralty laws, more particularly, the rules governing common carriers.

We quote with approval the observations of Raoul Colinvaux, the learned barrister-at-law 30 —

As a matter of principle, it is difficult to find a valid distinction between cases in which a ship is used to
convey the goods of one and of several persons. Where the ship herself is let to a charterer, so that he
takes over the charge and control of her, the case is different; the shipowner is not then a carrier. But
where her services only are let, the same grounds for imposing a strict responsibility exist, whether he is
employed by one or many. The master and the crew are in each case his servants, the freighter in each
case is usually without any representative on board the ship; the same opportunities for fraud or
collusion occur; and the same difficulty in discovering the truth as to what has taken place arises . . .
In an action for recovery of damages against a common carrier on the goods shipped, the shipper or
consignee should first prove the fact of shipment and its consequent loss or damage while the same was
in the possession, actual or constructive, of the carrier. Thereafter, the burden of proof shifts to
respondent to prove that he has exercised extraordinary diligence required by law or that the loss,
damage or deterioration of the cargo was due to fortuitous event, or some other circumstances
inconsistent with its liability. 31

To our mind, respondent carrier has sufficiently overcome, by clear and convincing proof, the prima
facie presumption of negligence.

The master of the carrying vessel, Captain Lee Tae Bo, in his deposition taken on 19 April 1977 before
the Philippine Consul and Legal Attache in the Philippine Embassy in Tokyo, Japan, testified that before
the fertilizer was loaded, the four (4) hatches of the vessel were cleaned, dried and fumigated. After
completing the loading of the cargo in bulk in the ship's holds, the steel pontoon hatches were closed
and sealed with iron lids, then covered with three (3) layers of serviceable tarpaulins which were tied
with steel bonds. The hatches remained close and tightly sealed while the ship was in transit as the
weight of the steel covers made it impossible for a person to open without the use of the ship's boom.
32

It was also shown during the trial that the hull of the vessel was in good condition, foreclosing the
possibility of spillage of the cargo into the sea or seepage of water inside the hull of the vessel. 33 When
M/V "Sun Plum" docked at its berthing place, representatives of the consignee boarded, and in the
presence of a representative of the shipowner, the foreman, the stevedores, and a cargo surveyor
representing CSCI, opened the hatches and inspected the condition of the hull of the vessel. The
stevedores unloaded the cargo under the watchful eyes of the shipmates who were overseeing the
whole operation on rotation basis. 34

Verily, the presumption of negligence on the part of the respondent carrier has been efficaciously
overcome by the showing of extraordinary zeal and assiduity exercised by the carrier in the care of the
cargo. This was confirmed by respondent appellate court thus —

. . . Be that as it may, contrary to the trial court's finding, the record of the instant case discloses ample
evidence showing that defendant carrier was not negligent in performing its obligations. Particularly, the
following testimonies of plaintiff-appellee's own witnesses clearly show absence of negligence by the
defendant carrier; that the hull of the vessel at the time of the discharge of the cargo was sealed and
nobody could open the same except in the presence of the owner of the cargo and the representatives
of the vessel (TSN, 20 July 1977, p. 14); that the cover of the hatches was made of steel and it was
overlaid with tarpaulins, three layers of tarpaulins and therefore their contents were protected from the
weather (TSN, 5 April 1978, p. 24); and, that to open these hatches, the seals would have to be broken,
all the seals were found to be intact (TSN, 20 July 1977, pp. 15-16) (emphasis supplied).

The period during which private respondent was to observe the degree of diligence required of it as a
public carrier began from the time the cargo was unconditionally placed in its charge after the vessel's
holds were duly inspected and passed scrutiny by the shipper, up to and until the vessel reached its
destination and its hull was reexamined by the consignee, but prior to unloading. This is clear from the
limitation clause agreed upon by the parties in the Addendum to the standard "GENCON" time charter-
party which provided for an F.I.O.S., meaning, that the loading, stowing, trimming and discharge of the
cargo was to be done by the charterer, free from all risk and expense to the carrier. 35 Moreover, a
shipowner is liable for damage to the cargo resulting from improper stowage only when the stowing is
done by stevedores employed by him, and therefore under his control and supervision, not when the
same is done by the consignee or stevedores under the employ of the latter. 36

Article 1734 of the New Civil Code provides that common carriers are not responsible for the loss,
destruction or deterioration of the goods if caused by the charterer of the goods or defects in the
packaging or in the containers. The Code of Commerce also provides that all losses and deterioration
which the goods may suffer during the transportation by reason of fortuitous event, force majeure, or
the inherent defect of the goods, shall be for the account and risk of the shipper, and that proof of these
accidents is incumbent upon the carrier. 37 The carrier, nonetheless, shall be liable for the loss and
damage resulting from the preceding causes if it is proved, as against him, that they arose through his
negligence or by reason of his having failed to take the precautions which usage has established among
careful persons. 38

Respondent carrier presented a witness who testified on the characteristics of the fertilizer shipped and
the expected risks of bulk shipping. Mr. Estanislao Chupungco, a chemical engineer working with Atlas
Fertilizer, described Urea as a chemical compound consisting mostly of ammonia and carbon monoxide
compounds which are used as fertilizer. Urea also contains 46% nitrogen and is highly soluble in water.
However, during storage, nitrogen and ammonia do not normally evaporate even on a long voyage,
provided that the temperature inside the hull does not exceed eighty (80) degrees centigrade. Mr.
Chupungco further added that in unloading fertilizer in bulk with the use of a clamped shell, losses due
to spillage during such operation amounting to one percent (1%) against the bill of lading is deemed
"normal" or "tolerable." The primary cause of these spillages is the clamped shell which does not seal
very tightly. Also, the wind tends to blow away some of the materials during the unloading process.

The dissipation of quantities of fertilizer, or its daterioration in value, is caused either by an extremely
high temperature in its place of storage, or when it comes in contact with water. When Urea is drenched
in water, either fresh or saline, some of its particles dissolve. But the salvaged portion which is in liquid
form still remains potent and usable although no longer saleable in its original market value.

The probability of the cargo being damaged or getting mixed or contaminated with foreign particles was
made greater by the fact that the fertilizer was transported in "bulk," thereby exposing it to the inimical
effects of the elements and the grimy condition of the various pieces of equipment used in transporting
and hauling it.

The evidence of respondent carrier also showed that it was highly improbable for sea water to seep into
the vessel's holds during the voyage since the hull of the vessel was in good condition and her hatches
were tightly closed and firmly sealed, making the M/V "Sun Plum" in all respects seaworthy to carry the
cargo she was chartered for. If there was loss or contamination of the cargo, it was more likely to have
occurred while the same was being transported from the ship to the dump trucks and finally to the
consignee's warehouse. This may be gleaned from the testimony of the marine and cargo surveyor of
CSCI who supervised the unloading. He explained that the 18 M/T of alleged "bar order cargo" as
contained in their report to PPI was just an approximation or estimate made by them after the fertilizer
was discharged from the vessel and segregated from the rest of the cargo.
The Court notes that it was in the month of July when the vessel arrived port and unloaded her cargo. It
rained from time to time at the harbor area while the cargo was being discharged according to the
supply officer of PPI, who also testified that it was windy at the waterfront and along the shoreline
where the dump trucks passed enroute to the consignee's warehouse.

Indeed, we agree with respondent carrier that bulk shipment of highly soluble goods like fertilizer
carries with it the risk of loss or damage. More so, with a variable weather condition prevalent during its
unloading, as was the case at bar. This is a risk the shipper or the owner of the goods has to face.
Clearly, respondent carrier has sufficiently proved the inherent character of the goods which makes it
highly vulnerable to deterioration; as well as the inadequacy of its packaging which further contributed
to the loss. On the other hand, no proof was adduced by the petitioner showing that the carrier was
remise in the exercise of due diligence in order to minimize the loss or damage to the goods it carried.

WHEREFORE, the petition is DISMISSED. The assailed decision of the Court of Appeals, which reversed
the trial court, is AFFIRMED. Consequently, Civil Case No. 98623 of the then Court of the First Instance,
now Regional Trial Court, of Manila should be, as it is hereby DISMISSED.

Costs against petitioner.

G.R. No. L-8095             March 31, 1915

F.C. FISHER, plaintiff,

Haussermann, Cohn and Fisher for plaintiff.

CARSON, J.:

The real question involved in these proceedings is whether the refusal of the owners and officers of a
steam vessel, duly licensed to engage in the coastwise trade of the Philippine Islands and engaged in
that trade as a common carrier, to accept for carriage "dynamite, powder or other explosives" from any
and all shippers who may offer such explosives for carriage can be held to be a lawful act without regard
to any question as to the conditions under which such explosives are offered to carriage, or as to the
suitableness of the vessel for the transportation of such explosives, or as to the possibility that the
refusal to accept such articles of commerce in a particular case may have the effect of subjecting any
person or locality or the traffic in such explosives to an undue, unreasonable or unnecessary prejudice or
discrimination.

Summarized briefly, the complaint alleges that plaintiff is a stockholder in the Yangco Steamship
Company, the owner of a large number of steam vessels, duly licensed to engage in the coastwise trade
of the Philippine Islands; that on or about June 10, 1912, the directors of the company adopted a
resolution which was thereafter ratified and affirmed by the shareholders of the company, "expressly
declaring and providing that the classes of merchandise to be carried by the company in its business as a
common carrier do not include dynamite, powder or other explosives, and expressly prohibiting the
officers, agents and servants of the company from offering to carry, accepting for carriage said
dynamite, powder or other explosives;" that thereafter the respondent Acting Collector of Customs
demanded and required of the company the acceptance and carriage of such explosives; that he has
refused and suspended the issuance of the necessary clearance documents of the vessels of the
company unless and until the company consents to accept such explosives for carriage; that plaintiff is
advised and believes that should the company decline to accept such explosives for carriage, the
respondent Attorney-General of the Philippine Islands and the respondent prosecuting attorney of the
city of Manila intend to institute proceedings under the penal provisions of sections 4, 5, and 6 of Act
No. 98 of the Philippine Commission against the company, its managers, agents and servants, to enforce
the requirements of the Acting Collector of Customs as to the acceptance of such explosives for carriage;
that notwithstanding the demands of the plaintiff stockholder, the manager, agents and servants of the
company decline and refuse to cease the carriage of such explosives, on the ground that by reason of
the severity of the penalties with which they are threatened upon failure to carry such explosives, they
cannot subject themselves to "the ruinous consequences which would inevitably result" from failure on
their part to obey the demands and requirements of the Acting Collector of Customs as to the
acceptance for carriage of explosives; that plaintiff believes that the Acting Collector of Customs
erroneously construes the provisions of Act No. 98 in holding that they require the company to accept
such explosives for carriage notwithstanding the above mentioned resolution of the directors and
stockholders of the company, and that if the Act does in fact require the company to carry such
explosives it is to that extent unconstitutional and void; that notwithstanding this belief of complainant
as to the true meaning of the Act, the questions involved cannot be raised by the refusal of the company
or its agents to comply with the demands of the Acting Collector of Customs, without the risk of
irreparable loss and damage resulting from his refusal to facilitate the documentation of the company's
vessels, and without assuming the company to test the questions involved by refusing to accept such
explosives for carriage.

The prayer of the complaint is as follows:

Wherefore your petitioner prays to this honorable court as follows:

First. That to the due hearing of the above entitled action be issued a writ of prohibition perpetually
restraining the respondent Yangco Steamship Company, its appraisers, agents, servants or other
representatives from accepting to carry and from carrying, in steamers of said company dynamite,
powder or other explosive substance, in accordance with the resolution of the board of directors and of
the shareholders of said company.

Second. That a writ of prohibition be issued perpetually enjoining the respondent J.S. Stanley as Acting
Collector of Customs of the Philippine Islands, his successors, deputies, servants or other
representatives, from obligating the said Yangco Steamship Company, by any means whatever, to carry
dynamite, powder or other explosive substance.

Third. That a writ of prohibition be issued perpetually enjoining the respondent Ignacio Villamor as
Attorney-General of the Philippine Islands, and W.H. Bishop as prosecuting attorney of the city of
Manila, their deputies representatives or employees, from accusing the said Yangco Steamship
Company, its officers, agents or servants, of the violation of Act No. 98 by reason of the failure or
omission of the said company to accept for carriage out to carry dynamite powder or other explosive.
Fourth. That the petitioner be granted such other remedy as may be meet and proper.

To this complaint the respondents demurred, and we are of opinion that the demurrer must be
sustained, on the ground that the complaint does not set forth facts sufficient to constitute a cause of
action.

It will readily be seen that plaintiff seeks in these proceedings to enjoin the steamship company from
accepting for carriage on any of its vessels, dynamite, powder or other explosives, under any conditions
whatsoever; to prohibit the Collector of Customs and the prosecuting officers of the government from
all attempts to compel the company to accept such explosives for carriage on any of its vessels under
any conditions whatsoever; and to prohibit these officials from any attempt to invoke the penal
provisions of Act No. 98, in any case of a refusal by the company or its officers so to do; and this without
regard to the conditions as to safety and so forth under which such explosives are offered for carriage,
and without regard also to any question as to the suitableness for the transportation of such explosives
of the particular vessel upon which the shipper offers them for carriage; and further without regard to
any question as to whether such conduct on the part of the steamship company and its officers involves
in any instance an undue, unnecessary or unreasonable discrimination to the prejudice of any person,
locality or particular kind of traffic.

There are no allegations in the complaint that for some special and sufficient reasons all or indeed any of
the company's vessels are unsuitable for the business of transporting explosives; or that shippers have
declined or will in future decline to comply with such reasonable regulations and to take such
reasonable precautions as may be necessary and proper to secure the safety of the vessels of the
company in transporting such explosives. Indeed the contention of petitioner is that a common carrier in
the Philippine Islands may decline to accept for carriage any shipment of merchandise of a class which it
expressly or impliedly declines to accept from all shippers alike, because as he contends "the duty of a
common carrier to carry for all who offer arises from the public profession he has made, and limited by
it."

In support of this contention counsel cites for a number of English and American authorities, discussing
and applying the doctrine of the common law with reference to common carriers. But it is unnecessary
now to decide whether, in the absence of statute, the principles on which the American and English
cases were decided would be applicable in this jurisdiction. The duties and liabilities of common carriers
in this jurisdiction are defined and fully set forth in Act No. 98 of the Philippine Commission, and until
and unless that statute be declared invalid or unconstitutional, we are bound by its provisions.

Sections 2, 3 and 4 of the Act are as follows:

SEC. 2. It shall be unlawful for any common carrier engaged in the transportation of passengers or
property as above set forth to make or give any unnecessary or unreasonable preference or advantage
to any particular person, company, firm, corporation or locality, or any particular kind of traffic in any
respect whatsoever, or to subject any particular person, company, firm, corporation or locality, or any
particular kind of traffic, to undue or unreasonable prejudice or discrimination whatsoever, and such
unjust preference or discrimination is also hereby prohibited and declared to be unlawful.

SEC. 3. No common carrier engaged in the carriage of passengers or property as aforesaid shall, under
any pretense whatsoever, fail or refuse to receive for carriage, and as promptly as it is able to do so
without discrimination, to carry any person or property offering for carriage, and in the order in which
such persons or property are offered for carriage, nor shall any such common carrier enter into any
arrangement, contract or agreement with any other person or corporation whereby the latter is given
an exclusive or preferential or monopolize the carriage any class or kind of property to the exclusion or
partial exclusion of any other person or persons, and the entering into any such arrangement, contract
or agreement, under any form or pretense whatsoever, is hereby prohibited and declared to be
unlawful.

SEC. 4. Any willful violation of the provisions of this Act by any common carrier engaged in the
transportation of passengers or property as hereinbefore set forth is hereby declared to be punishable
by a fine not exceeding five thousand dollars money of the United States, or by imprisonment not
exceeding two years, or both, within the discretion of the court.

The validity of this Act has been questioned on various grounds, and it is vigorously contended that in so
far as it imposes any obligation on a common carrier to accept for carriage merchandise of a class which
he makes no public profession to carry, or which he has expressly or impliedly announced his intention
to decline to accept for carriage from all shippers alike, it is ultra vires, unconstitutional and void.

We may dismiss without extended discussion any argument or contention as to the invalidity of the
statute based on alleged absurdities inherent in its provisions or on alleged unreasonable or impossible
requirements which may be read into it by a strained construction of its terms.

We agree with counsel for petitioner that the provision of the Act which prescribes that, "No common
carrier ... shall, under any pretense whatsoever, fail or refuse to receive for carriage ... to carry any
person or property offering for carriage," is not to be construed in its literal sense and without regard to
the context, so as to impose an imperative duty on all common carriers to accept for carriage, and to
carry all and any kind of freight which may be offered for carriage without regard to the facilities which
they may have at their disposal. The legislator could not have intended and did not intend to prescribe
that a common carrier running passenger automobiles for hire must transport coal in his machines; nor
that the owner of a tank steamer, expressly constructed in small watertight compartments for the
carriage of crude oil must accept common carrier must accept and carry contraband articles, such as
opium, morphine, cocaine, or the like, the mere possession of which is declared to be a criminal offense;
nor that common carriers must accept eggs offered for transportation in paper parcels or any
merchandise whatever do defectively packed as to entail upon the company unreasonable and
unnecessary care or risks.

Read in connection with its context this, as well as all the other mandatory and prohibitory provisions of
the statute, was clearly intended merely to forbid failures or refusals to receive persons or property for
carriage involving any "unnecessary or unreasonable preference or advantage to any particular person,
company, firm, corporation, or locality, or any particular kind of traffic in any respect whatsoever," or
which would "subject any particular person, company, firm, corporation or locality, or any particular
kind of traffic to any undue or unreasonable prejudice or discrimination whatsoever."

The question, then, of construing and applying the statute, in cases of alleged violations of its provisions,
always involves a consideration as to whether the acts complained of had the effect of making or giving
an "unreasonable or unnecessary preference or advantage" to any person, locality or particular kind of
traffic, or of subjecting any person, locality, or particular kind of traffic to any undue or unreasonable
prejudice or discrimination. It is very clear therefore that the language of the statute itself refutes any
contention as to its invalidity based on the alleged unreasonableness of its mandatory or prohibitory
provisions.

So also we may dismiss without much discussion the contentions as to the invalidity of the statute,
which are based on the alleged excessive severity of the penalties prescribed for violation of its
provisions. Upon general principles it is peculiarly and exclusively within the province of the legislator to
prescribe the pains and penalties which may be imposed upon persons convicted of violations of the
laws in force within his territorial jurisdiction. With the exercise of his discretion in this regard where it is
alleged that excessive fines or cruel and unusual punishments have been prescribed, and even in such
cases the courts will not presume to interfere in the absence of the clearest and most convincing
argument and proof in support of such contentions. (Weems vs. United States, 217 U.S., 349; U.S. vs.
Pico, 18 Phil. Rep., 386.) We need hardly add that there is no ground upon which to rest a contention
that the penalties prescribed in the statute under consideration are either excessive or cruel and
unusual, in the sense in which these terms are used in the organic legislation in force in the Philippine
Islands.

But it is contended that on account of the penalties prescribed the statute should be held invalid upon
the principles announced in Ex parte Young (209 U.S., 123, 147, 148); Cotting vs. Goddard (183 U.S., 79,
102); Mercantile Trust Co. vs. Texas Co. (51 Fed., 529); Louisville Ry. vs. McCord (103 Fed., 216); Cons.
Gas Co. vs. Mayer (416 Fed., 150). We are satisfied however that the reasoning of those cases is not
applicable to the statute under consideration. The principles announced in those decisions are fairly
indicated in the following citations found in petitioner's brief:

But when the legislature, in an effort to prevent any inquiry of the validity of a particular statute, so
burdens any challenge thereof in the courts that the party affected is necessarily constrained to submit
rather than take the chances of the penalties imposed, then it becomes a serious question whether the
party is not deprived of the equal protection of the laws. (Cotting vs. Goddard, 183 U. S., 79, 102.)

It may therefore be said that when the penalties for disobedience are by fines so enormous and
imprisonment so severe as to intimidate the company and its officers from resorting to the courts to test
the validity of the legislation, the result is the same as if the law in terms prohibited the company from
seeking judicial construction of laws which deeply affect its rights.

It is urged that there is no principle upon which to base the claim that a person is entitled to disobey a
statute at least once, for the purpose of testing its validity, without subjecting himself to the penalties
for disobedience provided by the statute in case it is valid. This is not an accurate statement of the case.
Ordinarily a law creating offenses in the nature of misdemeanors or felonies relates to a subject over
which the jurisdiction of the legislature is complete in any event. In the case, however, of the
establishment of certain rates without any hearing, the validity of such rates necessarily depends upon
whether they are high enough to permit at least some return upon the investment (how much it is not
now necessary to state), and an inquiry as to that fact is a proper subject of judicial investigation. If it
turns out that the rates are too low for that purpose, then they are illegal. Now, to impose upon a party
interested the burden of obtaining a judicial decision of such a question (no prior hearing having been
given) only upon the condition that, if unsuccessful, he must suffer imprisonment and pay fines, as
provided in these acts, is, in effect, to close up all approaches to the courts, and thus prevent any
hearing upon the question whether the rates as provided by the acts are not too low, and therefore
invalid. The distinction is obvious between a case where the validity of the act depends upon the
existence of a fact which can be determined only after investigation of a very complicated and technical
character, and the ordinary case of a statute upon a subject requiring no such investigation, and over
which the jurisdiction of the legislature is complete in any event.

We hold, therefore, that the provisions of the acts relating to the enforcement of the rates, either for
freight or passengers, by imposing such enormous fines and possible imprisonment as a result of an
unsuccessful effort to test the validity of the laws themselves, are unconstitutional on their face, without
regard to the question of the insufficiency of those rates. (Ex parte Young, 209 U.S., 123 147, 148.)

An examination of the general provisions of our statute, of the circumstances under which it was
enacted, the mischief which it sought to remedy and of the nature of the penalties prescribed for
violations of its terms convinces us that, unlike the statutes under consideration in the above cited
cases, its enactment involved no attempt to prevent common carriers "from resorting to the courts to
test the validity of the legislation;" no "effort to prevent any inquiry" as to its validity. It imposes no
arbitrary obligation upon the company to do or to refrain from doing anything. It makes no attempt to
compel such carriers to do business at a fixed or arbitrarily designated rate, at the risk of separate
criminal prosecutions for every demand of a higher or a different rate. Its penalties can be imposed only
upon proof of "unreasonable," "unnecessary" and "unjust" discriminations, and range from a maximum
which is certainly not excessive for willful, deliberate and contumacious violations of its provisions by a
great and powerful corporation, to a minimum which may be a merely nominal fine. With so wide a
range of discretion for a contention on the part of any common carrier that it or its officers are
"intimidated from resorting to the courts to test the validity" of the provisions of the statute prohibiting
such "unreasonable," "unnecessary" and "unjust" discriminations, or to test in any particular case
whether a given course of conduct does in fact involve such discrimination. We will presume, for the
purpose of declaring the statute invalid, that there is so real a danger that the Courts of First Instance
and this court on appeal will abuse the discretion thus conferred upon us, as to intimidate any common
carrier, acting in good faith, from resorting to the courts to test the validity of the statute. Legislative
enactments, penalizing unreasonable discriminations, unreasonable restraints of trade, and
unreasonable conduct in various forms of human activity are so familiar and have been so frequently
sustained in the courts, as to render extended discussion unnecessary to refute any contention as to the
invalidity of the statute under consideration, merely it imposes upon the carrier the obligation of
adopting one of various courses of conduct open to it, at the risk of incurring a prescribed penalty in the
event that the course of conduct actually adopted by it should be held to have involved an
unreasonable, unnecessary or unjust discrimination. Applying the test announced in Ex parte Young,
supra, it will be seen that the validity of the Act does not depend upon "the existence of a fact which can
be determined only after investigation of a very complicated and technical character," and that "the
jurisdiction of the legislature" over the subject with which the statute deals "is complete in any event."
There can be no real question as to the plenary power of the legislature to prohibit and to penalize the
making of undue, unreasonable and unjust discriminations by common carriers to the prejudice of any
person, locality or particular kind of traffic. (See Munn vs. Illinois, 94 U.S., 113, and other cases
hereinafter cited in support of this proposition.)

Counsel for petitioner contends also that the statute, if construed so as to deny the right of the
steamship company to elect at will whether or not it will engage in a particular business, such as that of
carrying explosives, is unconstitutional "because it is a confiscation of property, a taking of the carrier's
property without due process of law," and because it deprives him of his liberty by compelling him to
engage in business against his will. The argument continues as follows:

To require of a carrier, as a condition to his continuing in said business, that he must carry anything and
every thing is to render useless the facilities he may have for the carriage of certain lines of freight. It
would be almost as complete a confiscation of such facilities as if the same were destroyed. Their value
as a means of livelihood would be utterly taken away. The law is a prohibition to him to continue in
business; the alternative is to get out or to go into some other business — the same alternative as was
offered in the case of the Chicago & N.W. Ry. vs. Dey (35 Fed. Rep., 866, 880), and which was there
commented on as follows:

"Whatever of force there may be in such arguments, as applied to mere personal property capable of
removal and use elsewhere, or in other business, it is wholly without force as against railroad
corporations, so large a proportion of whose investment is in the soil and fixtures appertaining thereto,
which cannot be removed. For a government, whether that government be a single sovereign or one of
the majority, to say to an individual who has invested his means in so laudable an enterprise as the
construction of a railroad, one which tends so much to the wealth and prosperity of the community,
that, if he finds that the rates imposed will cause him to do business at a loss, he may quit business, and
abandon that road, is the very irony of despotism. Apples of Sodom were fruit of joy in comparison.
Reading, as I do, in the preamble of the Federal Constitution, that it was ordained to "establish justice," I
can never believe that it is within the property of an individual invested in and used for a purpose in
which even the Argus eyes of the police power can see nothing injurious to public morals, public health,
or the general welfare. I read also in the first section of the bill of rights of this state that "all men are by
nature free and equal, and have certain inalienable rights, among which are those of enjoying and
defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining
safety and happiness;" and I know that, while that remains as the supreme law of the state, no
legislature can directly or indirectly lay its withering or destroying hand on a single dollar invested in the
legitimate business of transportation." (Chicago & N.W. Ry. vs. Dey, 35 Fed. Rep., 866, 880.)

It is manifest, however, that this contention is directed against a construction of the statute, which, as
we have said, is not warranted by its terms. As we have already indicated, the statute does not "require
of a carrier, as a condition to his continuing in said business, that he must carry anything and
everything," and thereby "render useless the facilities he may have for the carriage of certain lines of
freight." It merely forbids failures or refusals to receive persons or property for carriage which have the
effect of giving an "unreasonable or unnecessary preference or advantage" to any person, locality or
particular kind of traffic, or of subjecting any person, locality or particular kind of traffic to any undue or
unreasonable prejudice or discrimination.

Counsel expressly admits that the statute, "as a prohibition against discrimination is a fair, reasonable
and valid exercise of government," and that "it is necessary and proper that such discrimination be
prohibited and prevented," but he contends that "on the other hand there is no reasonable warrant nor
valid excuse for depriving a person of his liberty by requiring him to engage in business against his will. If
he has a rolling boat, unsuitable and unprofitable for passenger trade, he may devote it to lumber
carrying. To prohibit him from using it unless it is fitted out with doctors and stewards and staterooms to
carry passengers would be an invalid confiscation of this property. A carrier may limit his business to the
branches thereof that suit his convenience. If his wagon be old, or the route dangerous, he may avoid
liability for loss of passengers' lives and limbs by carrying freight only. If his vehicles require expensive
pneumatic tires, unsuitable for freight transportation, ha may nevertheless carry passengers. The only
limitation upon his action that it is competent for the governing authority to impose is to require him to
treat all alike. His limitations must apply to all, and they must be established limitations. He cannot
refuse to carry a case of red jusi on the ground that he has carried for others only jusi that he was green,
or blue, or black. But he can refuse to carry red jusi, if he has publicly professed such a limitation upon
his business and held himself out as unwilling to carry the same for anyone."

To this it is sufficient answer to say that there is nothing in the statute which would deprive any person
of his liberty "by requiring him to engage in business against his will." The prohibitions of the statute
against undue, unnecessary or unreasonable regulations which the legislator has seen fit to prescribe for
the conduct of the business in which the carrier is engaged of his own free will and accord. In so far as
the self-imposed limitations by the carrier upon the business conducted by him, in the various examples
given by counsel, do not involve an unreasonable or unnecessary discrimination the statute would not
control his action in any wise whatever. It operates only in cases involving such unreasonable or
unnecessary preferences or discriminations. Thus in the hypothetical case suggested by the petitioner, a
carrier engaged in the carriage of green, blue or black jusi, and duly equipped therefor would manifestly
be guilty of "giving an unnecessary and unreasonable preference to a particular kind of traffic" and of
subjecting to "an undue and reasonable prejudice a particular kind of traffic," should he decline to carry
red jusi, to the prejudice of a particular shipper or of those engaged in the manufacture of that kind of
jusi, basing his refusal on the ground of "mere whim or caprice" or of mere personal convenience. So a
public carrier of passengers would not be permitted under this statute to absolve himself from liability
for a refusal to carry a Chinaman, a Spaniard, an American, a Filipino, or a mestizo by proof that from
"mere whim or caprice or personal scruple," or to suit his own convenience, or in the hope of increasing
his business and thus making larger profits, he had publicly announced his intention not to carry one or
other of these classes of passengers.

The nature of the business of a common carrier as a public employment is such that it is clearly within
the power of the state to impose such just and reasonable regulations thereon in the interest of the
public as the legislator may deem proper. Of course such regulations must not have the effect of
depriving an owner of his property without due process of law, nor of confiscating or appropriating
private property without just compensation, nor of limiting or prescribing irrevocably vested rights or
privileges lawfully acquired under a charter or franchise. But aside from such constitutional limitations,
the determination of the nature and extent of the regulations which should be prescribed rests in the
hands of the legislator.

Common carriers exercise a sort of public office, and have duties to perform in which the public is
interested. Their business is, therefore, affected with a public interest, and is subject of public
regulation. (New Jersey Steam Nav. Co. vs. Merchants Bank, 6 How., 344, 382; Munn vs. Illinois, 94 U.S.,
113, 130.) Indeed, this right of regulation is so far beyond question that it is well settled that the power
of the state to exercise legislative control over railroad companies and other carriers "in all respects
necessary to protect the public against danger, injustice and oppression" may be exercised through
boards of commissioners. (New York etc. R. Co. vs. Bristol, 151 U.S., 556, 571; Connecticut etc. R. Co. vs.
Woodruff, 153 U.S., 689.)
Regulations limiting of passengers the number of passengers that may be carried in a particular vehicle
or steam vessel, or forbidding the loading of a vessel beyond a certain point, or prescribing the number
and qualifications of the personnel in the employ of a common carrier, or forbidding unjust
discrimination as to rates, all tend to limit and restrict his liberty and to control to some degree the free
exercise of his discretion in the conduct of his business. But since the Granger cases were decided by the
Supreme Court of the United States no one questions the power of the legislator to prescribe such
reasonable regulations upon property clothed with a public interest as he may deem expedient or
necessary to protect the public against danger, injustice or oppression. (Munn vs. Illinois, 94 U.S., 113,
130; Chicago etc. R. Co. vs. Cutts, 94 U.S., 155; Budd vs. New York, 143 U.S., 517; Cotting vs. Goddard,
183 U.S., 79.) The right to enter the public employment as a common carrier and to offer one's services
to the public for hire does not carry with it the right to conduct that business as one pleases, without
regard to the interest of the public and free from such reasonable and just regulations as may be
prescribed for the protection of the public from the reckless or careless indifference of the carrier as to
the public welfare and for the prevention of unjust and unreasonable discrimination of any kind
whatsoever in the performance of the carrier's duties as a servant of the public.

Business of certain kinds, including the business of a common carrier, holds such a peculiar relation to
the public interest that there is superinduced upon it the right of public regulation. (Budd vs. New York,
143 U.S., 517, 533.) When private property is "affected with a public interest it ceases to be juris privati
only." Property becomes clothed with a public interest when used in a manner to make it of public
consequence and affect the community at large. "When, therefore, one devotes his property to a use in
which the public has an interest, he, in effect, grants to the public an interest in that use, and must
submit to be controlled by the public for the common good, to the extent of the interest he has thus
created. He may withdraw his grant by discontinuing the use, but so long as he maintains the use he
must submit to control." (Munn vs. Illinois, 94 U.S., 113; Georgia R. & Bkg. Co. vs. Smith, 128 U.S., 174;
Budd vs. New York, 143 U.S., 517; Louisville etc. Ry. Co. vs. Kentucky, 161 U.S., 677, 695.)

Of course this power to regulate is not a power to destroy, and limitation is not the equivalent of
confiscation. Under pretense of regulating fares and freight the state can not require a railroad
corporation to carry persons or property without reward. Nor can it do that which in law amounts to a
taking of private property for public use without just compensation, or without due process of law.
(Chicago etc. R. Co. vs. Minnesota, 134 U.S., 418; Minneapolis Eastern R. Co. vs. Minnesota, 134 U.S.,
467.) But the judiciary ought not to interfere with regulations established and palpably unreasonable as
to make their enforcement equivalent to the taking of property for public use without such
compensation as under all the circumstances is just both to the owner and to the public, that is, judicial
interference should never occur unless the case presents, clearly and beyond all doubt, such a flagrant
attack upon the rights of property under the guise of regulations as to compel the court to say that the
regulation in question will have the effect to deny just compensation for private property taken for the
public use. (Chicago etc. R. Co. vs. Wellman, 143 U.S., 339; Smyth vs. Ames, 169 U.S., 466, 524;
Henderson Bridge Co. vs. Henderson City, 173 U.S., 592, 614.)

Under the common law of England it was early recognized that common carriers owe to the public the
duty of carrying indifferently for all who may employ them, and in the order in which application is
made, and without discrimination as to terms. True, they were allowed to restrict their business so as to
exclude particular classes of goods, but as to the kinds of property which the carrier was in the habit of
carrying in the prosecution of his business he was bound to serve all customers alike (State vs. Cincinnati
etc. R. Co., 47 Ohio St., 130, 134, 138; Louisville etc. Ry. Co. vs. Quezon City Coal Co., 13 Ky. L. Rep., 832);
and it is to be observed in passing that these common law rules are themselves regulations controlling,
limiting and prescribing the conditions under which common carriers were permitted to conduct their
business. (Munn vs. Illinois, 94 U. S., 113, 133.)

It was found, in the course of time, that the correction of abuses which had grown up with the
enormously increasing business of common carriers necessitated the adoption of statutory regulations
controlling the business of common carriers, and imposing severe and drastic penalties for violations of
their terms. In England, the Railway Clauses Consolidation Act was enacted in 1845, the Railway and
Canal Traffic Act in 1854, and since the passage of those Acts much additional legislation has been
adopted tending to limit and control the conduct of their business by common carriers. In the United
States, the business of common carriers has been subjected to a great variety of statutory regulations.
Among others Congress enacted "The Interstate Commerce Act" (1887) and its amendments, and the
Elkins Act as amended (1906); and most if not all of the States of the Union have adopted similar
legislation regulating the business of common carriers within their respective jurisdictions. Unending
litigation has arisen under these statutes and their amendments, but nowhere has the right of the state
to prescribe just and reasonable regulations controlling and limiting the conduct of the business of
common carriers in the public interest and for the general welfare been successfully challenged, though
of course there has been wide divergence of opinion as to the reasonableness, the validity and legality
of many of the regulations actually adopted.

The power of the Philippine legislator to prohibit and to penalize all and any unnecessary or
unreasonable discriminations by common carriers may be maintained upon the same reasoning which
justified the enactment by the Parliament of England and the Congress of the United States of the above
mentioned statutes prohibiting and penalizing the granting of certain preferences and discriminations in
those countries. As we have said before, we find nothing confiscatory or unreasonable in the conditions
imposed in the Philippine statute upon the business of common carriers. Correctly construed they do
not force him to engage in any business his will or to make use of his facilities in a manner or for a
purpose for which they are not reasonably adapted. It is only when he offers his facilities as a common
carrier to the public for hire, that the statute steps in and prescribes that he must treat all alike, that he
may not pick and choose which customer he will serve, and, specifically, that he shall not make any
undue or unreasonable preferences or discriminations whatsoever to the prejudice not only of any
person or locality but also of any particular kind of traffic.

The legislator having enacted a regulation prohibiting common carriers from giving unnecessary or
unreasonable preferences or advantages to any particular kind of traffic or subjecting any particular kind
of traffic to any undue or unreasonable prejudice or discrimination whatsoever, it is clear that whatever
may have been the rule at the common law, common carriers in this jurisdiction cannot lawfully decline
to accept a particular class of goods for carriage, to the prejudice of the traffic in those goods, unless it
appears that for some sufficient reason the discrimination against the traffic in such goods is reasonable
and necessary. Mere whim or prejudice will not suffice. The grounds for the discrimination must be
substantial ones, such as will justify the courts in holding the discrimination to have been reasonable
and necessary under all circumstances of the case.

The prayer of the petition in the case at bar cannot be granted unless we hold that the refusal of the
defendant steamship company to accept for carriage on any of its vessels "dynamite, gunpowder or
other explosives" would in no instance involve a violation of the provisions of this statute. There can be
little doubt, however, that cases may and will arise wherein the refusal of a vessel "engaged in the
coastwise trade of the Philippine Islands as a common carrier" to accept such explosives for carriage
would subject some person, company, firm or corporation, or locality, or particular kind of traffic to a
certain prejudice or discrimination. Indeed it cannot be doubted that the refusal of a "steamship
company, the owner of a large number of vessels" engaged in that trade to receive for carriage any such
explosives on any of its vessels would subject the traffic in such explosives to a manifest prejudice and
discrimination. The only question to be determined therefore is whether such prejudice or
discrimination might in any case prove to be undue, unnecessary or unreasonable.

This of course is, in each case, a question of fact, and we are of the opinion that the facts alleged in the
complaint are not sufficient to sustain a finding in favor of the contentions of the petitioner. It is not
alleged in the complaint that "dynamite, gunpowder and other explosives" can in no event be
transported with reasonable safety on board steam vessels engaged in the business of common carriers.
It is not alleged that all, or indeed any of the defendant steamship company's vessels are unsuited for
the carriage of such explosives. It is not alleged that the nature of the business in which the steamship
company is engaged is such as to preclude a finding that a refusal to accept such explosives on any of its
vessels would subject the traffic in such explosives to an undue and unreasonable prejudice and
discrimination.

Plaintiff's contention in this regard is as follows:

In the present case, the respondent company has expressly and publicly renounced the carriage of
explosives, and expressly excluded the same terms from the business it conducts. This in itself were
sufficient, even though such exclusion of explosives were based on no other ground than the mere
whim, caprice or personal scruple of the carrier. It is unnecessary, however, to indulge in academic
discussion of a moot question, for the decision not a carry explosives rests on substantial grounds which
are self-evident.

We think however that the answer to the question whether such a refusal to carry explosives involves
an unnecessary or unreasonable preference or advantage to any person, locality or particular kind of
traffic or subjects any person, locality or particular to traffic to an undue or unreasonable prejudice and
discrimination is by no means "self-evident," and that it is a question of fact to be determined by the
particular circumstances of each case.

The words "dynamite, powder or other explosives" are broad enough to include matches, and other
articles of like nature, and may fairly be held to include also kerosene oil, gasoline and similar products
of a highly inflammable and explosive character. Many of these articles of merchandise are in the nature
of necessities in any country open to modern progress and advancement. We are not fully advised as to
the methods of transportation by which they are made commercially available throughout the world,
but certain it is that dynamite, gunpowder, matches, kerosene oil and gasoline are transported on many
vessels sailing the high seas. Indeed it is a matter of common knowledge that common carriers
throughout the world transport enormous quantities of these explosives, on both land and sea, and
there can be little doubt that a general refusal of the common carriers in any country to accept such
explosives for carriage would involve many persons, firms and enterprises in utter ruin, and would
disastrously affect the interests of the public and the general welfare of the community.
It would be going to far to say that a refusal by a steam vessel engaged in the business of transporting
general merchandise as a common carrier to accept for carriage a shipment of matches, solely on the
ground of the dangers incident to the explosive quality of this class of merchandise, would not subject
the traffic in matches to an unnecessary, undue or unreasonable prejudice and discrimination without
proof that for some special reason the particular vessel is not fitted to carry articles of that nature. There
may be and doubtless are some vessels engaged in business as common carriers of merchandise, which
for lack of suitable deck space or storage rooms might be justified in declining to carry kerosene oil,
gasoline, and similar products, even when offered for carriage securely packed in cases; and few vessels
are equipped to transport those products in bulk. But in any case of a refusal to carry such products
which would subject any person, locality or the traffic in such products would be necessary to hear
evidence before making an affirmative finding that such prejudice or discrimination was or was not
unnecessary, undue or unreasonable. The making of such a finding would involve a consideration of the
suitability of the vessel for the transportation of such products ; the reasonable possibility of danger or
disaster resulting from their transportation in the form and under the conditions in which they are
offered for carriage; the general nature of the business done by the carrier and, in a word, all the
attendant circumstances which might affect the question of the reasonable necessity for the refusal by
the carrier to undertake the transportation of this class of merchandise.

But it is contended that whatever the rule may be as to other explosives, the exceptional power and
violence of dynamite and gunpowder in explosion will always furnish the owner of a vessel with a
reasonable excuse for his failure or refusal to accept them for carriage or to carry them on board his
boat. We think however that even as to dynamite and gunpowder we would not be justified in making
such a holding unaided by evidence sustaining the proposition that these articles can never be carried
with reasonable safety on any vessel engaged in the business of a common carrier. It is said that
dynamite is so erratic an uncontrollable in its action that it is impossible to assert that it can be handled
with safety in any given case. On the other hand it is contended that while this may be true of some
kinds of dynamite, it is a fact that dynamite can be and is manufactured so as to eliminate any real
danger from explosion during transportation. These are of course questions of fact upon which we are
not qualified to pass judgment without the assistance of expert witnesses who have made special
studies as to the chemical composition and reactions of the different kinds of dynamite, or attained a
thorough knowledge of its properties as a result of wide experience in its manufacture and
transportation.

As we construe the Philippine statute, the mere fact that violent and destructive explosions can be
obtained by the use of dynamite under certain conditions would not be sufficient in itself to justify the
refusal of a vessel, duly licensed as a common carrier of merchandise, to accept it for carriage, if it can
be proven that in the condition in which it is offered for carriage there is no real danger to the carrier,
nor reasonable ground to fear that his vessel or those on board his vessel will be exposed to
unnecessary and unreasonable risk in transporting it, having in mind the nature of his business as a
common carrier engaged in the coastwise trade in the Philippine Islands, and his duty as a servant of the
public engaged in a public employment. So also, if by the exercise of due diligence and the taking of
unreasonable precautions the danger of explosions can be practically eliminated, the carrier would not
be justified in subjecting the traffic in this commodity to prejudice or discrimination by proof that there
would be a possibility of danger from explosion when no such precautions are taken.
The traffic in dynamite, gunpowder and other explosives is vitally essential to the material and general
welfare of the people of these Islands. If dynamite, gunpowder and other explosives are to continue in
general use throughout the Philippines, they must be transported by water from port to port in the
various islands which make up the Archipelago. We are satisfied therefore that the refusal by a
particular vessel, engaged as a common carrier of merchandise in the coastwise trade of the Philippine
Islands, to accept any or all of these explosives for carriage would constitute a violation of the
prohibitions against discriminations penalized under the statute, unless it can be shown by affirmative
evidence that there is so real and substantial a danger of disaster necessarily involved in the carriage of
any or all of these articles of merchandise as to render such refusal a due or a necessary or a reasonable
exercise of prudence and discretion on the part of the shipowner.

The complaint in the case at bar lacking the necessary allegations under this ruling, the demurrer must
be sustained on the ground that the facts alleged do not constitute a cause of action.

A number of interesting questions of procedure are raised and discussed in the briefs of counsel. As to
all of these questions we expressly reserve our opinion, believing as we do that in sustaining the
demurrer on the grounds indicated in this opinion we are able to dispose of the real issue involved in
the proceedings without entering upon the discussion of the nice questions which it might have been
necessary to pass upon had it appeared that the facts alleged in the complaint constitute a cause of
action.

We think, however, that we should not finally dispose of the case without indicating that since the
institution of these proceedings the enactment of Acts No. 2307 and No. 2362 (creating a Board of
Public Utility Commissioners and for other purposes) may have materially modified the right to institute
and maintain such proceedings in this jurisdiction. But the demurrer having been formallly submitted for
judgment before the enactment of these statutes, counsel have not been heard in this connection. We
therefore refrain from any comment upon any questions which might be raised as to whether or not
there may be another adequate and appropriate remedy for the alleged wrong set forth in the
complaint. Our disposition of the question raised by the demurrer renders that unnecessary at this time,
though it may not be improper to observe that a careful examination of those acts confirms us in the
holding upon which we base our ruling on this demurrer, that is to say "That whatever may have been
the rule at the common law, common carriers in this jurisdiction cannot lawfully decline to accept a
particular class of goods for carriage, to the prejudice of the traffic in those goods, unless it appears that
for some sufficient reason the discrimination against the traffic in such goods is reasonable and
necessary. Mere prejudice or whim will not suffice. The grounds of the discrimination must be
substantial ones, such as will justify the courts in holding the discrimination to have been reasonable
and necessary under all the circumstances of the case."

Unless an amended complaint be filed in the meantime, let judgment be entered ten days hereafter
sustaining the demurrer and dismissing the complaint with costs against the complainant, and twenty
days thereafter let the record be filed in the archives of original actions in this court. So ordered.