612 SUPREME COURT REPORTS ANNOTATED De Guzman vs. Court of Appeals No. L-47822. December 22, 1988.

* PEDRO DE GUZMAN, petitioner, vs. COURT OF APPEALS and ERNESTO CENDAA, respondents. Common Carriers; Definition of; Art. 1732 of the Civil Code makes no distinctions

between a person or enterprise offering transportation service on a regular or scheduled basis and such service on an occasional, episodic or unscheduled basis. The Civil Code defines persons, common carriers or in the or following or both, terms: by Article in 1732. the or Common of air for carriers carrying are or corporations, passengers firms, associations engaged land, business

transporting

goods

water,

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 deliberately refrained from making such distinctions. ________________

* THIRD DIVISION. 613

VOL. 168, DECEMBER 22, 1988 613 De Guzman vs. Court of Appeals

Same; Same; Same; The concept of common carrier under Art. 1732 coincides with the notion of Public Service under the Public Service Act (CA No. 1416).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. control Under in the Section 13, paragraph for hire or (b) of the Public with Service general Act, or public limited service clientele, includes: x x x every person that now or hereafter may own, operate, manage, or Philippines, compensation, 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, steamship freight or carrier ferries service and of any class, express in service, the steamboat, or of line, pontines, water craft, engaged transportation

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. x x x. Same; Same; Same; Same; A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers. 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 has Code also provisions complied governing with the and common carriers. of That liability arises the moment statute a person or firm acts as a common carrier, without regard to whether or not such carrier requirements has been the a applicable certificate of regulatory and or implementing regulations granted public convenience

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 614

614

SUPREME COURT REPORTS ANNOTATED De Guzman vs. Court of Appeals 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. Same; Same; or Same; Liability of of common goods they carriers carry; in case of loss, destruction or

deterioration

destruction

Extraordinary

diligence,

required;

Exceptions.Common carriers, by the nature of their business and for reasons of public policy, 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; (2) Act of the public enemy in war, whether international or civil; (3) Act or omission of the shipper or owner of the goods; (4) The character of the goods or defects in the packing or in the containers; and (5) Order or act of competent public authority. 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. Same; Same; Same; Same; Same; The hijacking of the carriers truck does not fall

within any of the five (5) categories of exempting causes in Art. 1734.Applying the above-quoted Articles 1734 and 1735, we note firstly that the specific cause alleged in the instant casethe hijacking of the carriers truckdoes 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 carriers 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. Same; Same; Same; Same; Same; Under Art. 1745(6), a common carrier is held

responsible even for acts of strangers like thieves or robbers except where such thieves or robbers acted with grave or irresistible threat, violence or force.As noted earlier, the duty of ex-

615

VOL. 168, DECEMBER 22, 1988 615 De Guzman vs. Court of Appeals traordinary 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 stipulat ions 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 carriers liability for acts committed by t hieves, 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. Under Article 1745 (6) above, a common carrier is held responsible and will not be allowed to divest or to diminish such responsibilityeven 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. Same; Same; Same; Same; Same; Common carriers are not made absolute insurers

against all risks of travel and of transport of goods and are not liable for fortuitous events; Case at bar.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 the with the rigorous by standard the of extraordinary diligence. We, therefore, agree with result reached Court of

Appeals that private respondent Cendaa is not liable for the value of the undelivered merchandise which was lost because of an event entirely beyond private respondents control. PETITION for certiorari to review the decision of the Court of Appeals.

The facts are stated in the opinion of the Court. Vicente D. Millora for petitioner. Jacinto Callanta for private respondent. 616

616 SUPREME COURT REPORTS ANNOTATED De Guzman vs. Court of Appeals FELICIANO, J.:

Respondent Ernesto Cendaa, 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 petitioners 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, respondents 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 P22,150.00, the claimed value of the lost merchandise, plus damages and attorneys fees. Petitioner argued that private respondent, diligence being a of common him by carrier, the and having be failed held to exercise for the the extraordinary value of the required law, should liable

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 617

VOL. 168, DECEMBER 22, 1988 617 De Guzman vs. Court of Appeals force majeure. On 10 December 1975, the trial court rendered a Decision1 finding private respondent to be a common carrier and holding him liable for the value of the undelivered goods (P22,150.00) as well as for P4,000.00 as damages and P2,000.00 as attorneys 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 attorneys 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 ca sual occupationa 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 respondents 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 Cendaa 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 _______________

1 Rollo, p. 14. 618

618 SUPREME COURT REPORTS ANNOTATED De Guzman vs. Court of Appeals carefully an or avoids making episodic and one any or who distinction between basis. or a person does or Article only enterprise 1732 from offering

transportation service on a regular or scheduled basis and one offering such service on occasional, population, unscheduled offers Neither solicits distinguish a narrow between a carrier offering its services to the general public, i.e., the general community services business segment of the general population. We think that Article 1733 deliberately refrained from 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: 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, 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. x x x. (Italics 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 backhauling was done on a periodic or occasional rather than regular or scheduled manner, and even though private respondents 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; 619

VOL. 168, DECEMBER 22, 1988 619 De Guzman vs. Court of Appeals that 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 and requirements has been of the a applicable certificate of regulatory statute and or implementing regulations granted public convenience

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. _______________

2 Article 1733, Civil Code. 620

620 SUPREME COURT REPORTS ANNOTATED De Guzman vs. Court of Appeals 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; (2) Act of the public enemy in war, whether international or civil; (3) Act or omission of the shipper or owner of the goods; (4) The character of the goods or defects in the packing or in the containers; and (5) Order or act of competent public authority. 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. (Italics supplied) Applying the above-quoted Articles 1734 and 1735, we note firstly that the specific cause alleged in the instant casethe hijacking of the carriers truckdoes not fall within any of the five (5) that to categories the of exempting of at the fault causes carriers or to listed vehicle have in Article be 1734. dealt It would follow, the therefore, is hijacking been must with This under

provisions of Article 1735, in other words, that the private respondent as common carrier presumed have acted negligently. 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 petitioners goods. Petitioner argues that in the circumstances of this case, private respondent should have hired a security guard presumably to 621

VOL. 168, DECEMBER 22, 1988 621 De Guzman vs. Court of Appeals 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 firefight 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: x x x x x x x x x

(5) that the common carrier shall not be responsible for the acts or omissions of his or its employees; (6) that the common carriers 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. (Italics supplied) Under Article 1745 (6) above, a common carrier is held responsible and will not be allowed to divest or to diminish such responsibilityeven 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 threat, violence or force. In the instant case, armed men held up the second truck owned by private respondent which carried petitioners cargo. The record shows that an information for robbery in band was 622 is attended by grave or irresistible

622 SUPREME COURT REPORTS ANNOTATED De Guzman vs. Court of Appeals 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 petitioners 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 Cendaa is not liable for the value of the undelivered merchandise which was lost because of an event entirely beyond private respondents 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. _______________

3 Rollo, p. 22. 4 The evidence of the prosecution did not show that more than three (3) of the five (5) hold-uppers were armed. Thus, the existence of a band within the technical meaning of Article 306 of the Revised Penal Code, was not affirmatively proved by the prosecution. 623

VOL. 168, DECEMBER 22, 1988 623 Valenzuela vs. Court of Appeals SO ORDERED.

Fernan (C.J.), Gutierrez, Jr., Bidin and Corts, JJ., concur. Petition denied. Decision affirmed. Notes.Right of reimbursement of company held liable for damages against the

owner/operator of ferry boat for actual negligence for drawing passengers. (Sarkies Tours Phils, Inc. vs. IAC, 124 SCRA 588.) The owner of a vessel is liable in damages arising from the act of its captain in bypassing a pre-scheduled port of call. (Sweet Lines vs. Court of Appeals, 121 SCRA 769.) o0o [De Guzman vs. Court of Appeals, 168 SCRA 612(1988)]