Transpo Finals

Transportation Law | Atty.
Rivera
 The relation of passenger and carrier commences when one puts

CONTRACT OF TRANSPORTATION himself in the care of the carrier, or directly under its control, with
the bona fide intention of becoming a passenger, and is accepted as
Perfection of the Contract such by the carrier – as where he makes a contract for transportation
and presents himself at the proper place and in a proper manner to
Passengers be transported.
LRTA, et al. v. Navidad, et al.
Art. 1732. Common carriers are persons, corporations,
firms or associations engaged in the business of carrying or  The statutory provisions render a common carrier liable for death of
transporting passengers or goods or both, by land, water, or injury to passengers, when the same is inflicted:
or air, for compensation, offering their services to the o Through the negligence or willful acts of its employees
public. o On account of willful acts or negligence of other passengers
British Airways v. CA or of strangers, IF the common carriers employees, through
the exercise of due diligence, could have prevented or
Aspects of Contract of Carriage of Passengers stopped the act or omission.
 Contract “to carry (At some future time),” which is consensual  In any case of death or injury, the carrier is presumed to have been
and necessarily perfected by mere consent (Art. 1356) at fault or been negligent
 Contract “of carriage” or “of common carriage,” which does o By simple proof of injury, the passenger is relieved of the
not give rise to the obligation of the carrier until the carrier is duty to establish the fault or negligence of the carrier or of its
actually used. employees;
Korean Airlines Co. Ltd v. CA o Rather, the burden shifts upon the carrier to prove that the
injury is due to an unforeseen event or to force majeure.
A contract to transport passengers is different in kind and degree from any
other contractual relations. It is a public duty—particularly when discussing Article 1759. Common carriers are liable for the death of
air carriage. Passengers therefore have the RIGHT to be treated by the or injuries to passengers through the negligence or willful
carrier's employees with kindness, respect, courtesy and due consideration. acts of the formers employees, although such employees
They are therefore entitled to be protected against personal misconduct, may have acted beyond the scope of their authority or in
injurious language, indignities and abuses from such employees. violation of the orders of the common carriers.
Dangwa Transportation Co. Inc. v. CA This liability of the common carriers does not cease upon
As a rule, Common Carriers are bound to observe extraordinary diligence proof that they exercised all the diligence of a good father of
for the safety of the passengers transported by them, according to all the a family in the selection and supervision of their employees.
circumstances of each case. A common carrier is bound to carry the
passengers safely as far as human care and foresight can provide, using the
UTMOST DILIGENCE of very cautious persons, with a due regard for Article 1763. A common carrier is responsible for injuries
all the circumstances. suffered by a passenger on account of the willful acts or
negligence of other passengers or of strangers, if the
Jesusa Vda. De Nueca, et al. v. Manila Railroad Co. common carriers employees through the exercise of the
 A passenger is one who travels in a public conveyance by virtue of a diligence of a good father of a family could have prevented
contract, express or implied, with the carrier as to the payment of the or stopped the act or omission.
fare, or that which is accepted as an equivalent.
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Transportation Law | Atty. Rivera
Carriage of Goods  This is a closed list. If the cause of destruction, loss or deterioration
is other than the enumerated circumstances, then the carrier is liable
Ganzon v. CA therefor.
By the act of delivery, the goods were unconditionally placed in the
possession and control of the common carrier, and upon their receipt by the
Art. 1739. In order that the common carrier may be
carrier for transportation, the contract of carriage was deemed perfected, and
the petitioner-carrier's extraordinary responsibility for the loss, destruction exempted from responsibility, the natural disaster must
or deterioration of the goods commenced. have been the proximate and only cause of the loss.
However, the common carrier must exercise due diligence
 Pursuant to Art. 1736, such extraordinary responsibility would cease
to prevent or minimize loss before, during and after the
only upon the delivery, actual or constructive, by the carrier to the
consignee, or to the person who has a right to receive them. occurrence of flood, storm or other natural disaster in order
Art. 1736. The extraordinary responsibility of the common that the common carrier may be exempted from liability for
carrier lasts from the time the goods are unconditionally the loss, destruction, or deterioration of the goods. The
placed in the possession of, and received by the carrier for same duty is incumbent upon the common carrier in case of
transportation until the same are delivered, actually or an act of the public enemy referred to in Article 1734, No. 2.
constructively, by the carrier to the consignee, or to the
person who has a right to receive them, without prejudice to Art. 1743. If through the order of public authority the
the provisions of Article 1738. goods are seized or destroyed, the common carrier is not
responsible, provided said public authority had power to
issue the order.
 Petitioner also failed to show that the loss of the goods was due to
any of the following causes enumerated in the Civil Code,
which would have absolved him from liability. Cia. Maritima v. Insurance Co. of North America
The test as to whether the relation of shipper and carrier had been
established is “Had the control and possession of the cotton been
Art. 1734. Common carriers are responsible for the loss,
completely surrendered by the shipper to the railroad company?”
destruction, or deterioration of the goods, unless the same is
due to any of the following causes only:  Whenever the control and possession of goods passes to the carrier
1. Flood, storm, earthquake, lightning, or other natural and nothing remains to be done by the shipper, then it can be said
disaster or calamity; with certainty that the relation of shipper and carrier has
commenced
2. Act of the public enemy in war, whether international or
civil;  The liability of the carrier as common carrier begins with the actual
delivery of the goods for transportation, and NOT merely with
3. Act of omission of the shipper or owner of the goods; the formal execution of a receipt or bill of lading.
4. The character of the goods or defects in the packing or in o The issuance of a bill of lading is not necessary to complete
the containers; delivery and acceptance.
5. Order or act of competent public authority. o Even where it is provided by statute that liability commences
with the issuance of the bill of lading, actual delivery and
acceptance are sufficient to bind the carrier.
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 Accordingly, a common carrier is liable for actual or compensatory

damages under Article 2206 in relation to Article 1764 of the Civil
Parties
Code for deaths of its passengers caused by the breach of the contract
Baliwag Transit Corp. v. CA of transportation.
Since the suit is one for breach of contract of carriage, the Release of Claims PAL v. CA
executed by respondent, as the injured party, discharging petitioners from
any and all liability is valid and absolves Baliwag from liability. Petitioner is a common carrier engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air, for
 The contract of carriage was actually between George, as the paying compensation, offering their services to the public, as defined in Art. 1732
passenger, and Baliwag, as the common carrier, not respondents, NCC.
who are George’s parents.
 The law is clear in requiring a common carrier to exercise the highest
Since a contract may be violated only by the parties thereto, as against each degree of care in the discharge of its duty and business of carriage
other, in an action upon that contract, the real parties in interest, either as and transportation under Arts. 1733, 1755 and 1756 NCC.
plaintiff or as defendant, must be parties to said contract.
 In the absence of any contract of carriage between Baliwag and
Ancillary Contracts
George's parents, the latter are not real parties-in-interest in an
action for breach of that contract. Delgado Brothers Inc. v. Home Insurance Inc.
Everett Steamship Corp. v. CA Both as to the nature of the functions and the place of their performance
(upon wharves and piers shipside), petitioner's services are clearly not
It is required that the stipulation limiting the common carriers liability for
maritime. Arrastre operators are no different from these of a depository or a
loss must be reasonable and just under the circumstances, and has been
warehouseman. Granting arguendo, that petitioner's arrastre
freely and fairly agreed upon. The fact that the conditions were printed in
service depends on, assists, or furthers maritime transportation),
small letters does not make the bill of lading invalid.
it may be deemed merely incidental to its afore-mentioned
functions as arrastre operator and does not, thereby, make
petitioner's arrastre service maritime in character.
Exceptions
Mayer Steel Pipe Corp v. CA
Sulpicio v. CA
Section 3(6) of the Carriage of Goods by Sea Act (COGSA): ―...the
Under Article 2206 of the Civil Code of the Philippines, only deaths caused by carrier and the ship shall be discharged from all liability for loss or damage to
a crime as quasi-delict are entitled to actual and compensatory damages the goods if no suit is filed within one year after delivery of the goods or
without the need of proof of the said damages. the date when they should have been delivered.‖
 ―The amount of damages for death caused by a crime or quasi -elict  ONLY the carrier's liability is extinguished if no suit is brought
shall be at least PhP 3,000.00, even though there may have been within one year.
mitigating circumstances…‖
o The liability of the insurer is not extinguished because the
 Wherefore, damages arising from culpa contractual are not insurer's liability is based not on the contract of carriage but
compensable without proof of special damages sustained by the heirs on the contract of insurance.
of the victim.
o The COGSA governs the relationship between the carrier and
However, the Civil Code, in Article 1764 thereof, expressly makes Article the shipper, not the relationship between the shipper and the
2206 applicable ―to the death of a passenger caused by the breach of contract insurer, which is governed by the Insurance Code.
by a common carrier.‖
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DEFINITION & TEST OF COMMON CARRIER CONCEPT Caltex Phils v. Sulpicio Lines
Article 1732. Common carriers are persons, corporations, The charterer of a vessel has no obligation to ensure that the vessel it
firms or associations engaged in the business of carrying or chartered complied with all legal requirements before transporting its cargo.
transporting passengers or goods or both, by land, water, The duty rests upon the common carrier, simply for being engaged in "public
or air for compensation, offering their services to the public. service."
De Guzman v. CA  A charter party agreement is one by which an entire ship, or some
part thereof, is leased by the owner to another for a specified time or
Art. 1732 makes no distinction between one whose principal business activity use. They may be a contract of affreightment, or a bareboat charter.
is the carrying of persons or goods or both, and one who does such carrying
only as an ancillary activity. o A Contract of Affreightment, under which the charter-
party provides for the hire of the vessel only, either for a
● It also carefully avoids making any distinction between a person or determinate period of time or for a single or consecutive
enterprise offering transportation service on a regular or scheduled voyage, the ship owner to supply the ship's store, pay for the
basis and one offering such service on an occasional, episodic or wages of the master of the crew, and defray the expenses for
unscheduled basis. the maintenance of the ship. may be:
Neither does it distinguish between a carrier offering its services to the  A time charter, whereunder the leased vessel is
"general public," i.e., the general community or population, and one who leased to the charterer for a fixed period of time; or,
offers services or solicits business only from a narrow segment of the general
population.  A voyage charter, whereunder the ship is leased for
a single voyage.
First Philippine Industrial Corp. v. CA
o On the other hand, a Bareboat or Demise Charter, the
The test for determining whether a party is a common carrier of goods is: charterer mans the vessel with his own people and becomes,
1. He must be engaged in the business of carrying goods for others as a in effect, the owner for the voyage or service stipulated,
public employment, and must hold himself out as ready to engage in subject to liability for damages caused by negligence.
the transportation of goods for person generally as a business and  In Contracts of Affreightment, the liability rests with the shipowner,
not as a casual occupation;1 not the charterer, since said charterer does not take control of the
2. He must undertake to carry goods of the kind to which his business is operation of the vessel at any point in time. The opposite is true
confined; under a Bareboat or Demise Charter.
3. He must undertake to carry by the method by which his business is Coastwise Lighterage Corp. v. CA
conducted and over his established roads; and In bareboat charter of the vessel, the charterer will generally be regarded as
4. The transportation must be for hire. the owner for the voyage or service stipulated. Contract of
affreightment is one in which the owner of the vessel leases part or all of its
National Steel v. CA space to haul goods for others.
It has been held that the true test of a common carrier is the carriage of Virgines Calvo v. UCPB General Insurance Co.2
passengers or goods, provided it has space, for ALL who opt to avail
themselves of its transportation service for a fee. A carrier which does not Article 1732 also carefully avoids making any distinction between a person or
qualify under the above test is deemed a private carrier. enterprise offering transportation service on a regular or scheduled basis and
one offering such service on an occasional, episodic or unscheduled basis.
There is also no distinction made between a carrier offering its services to
1Compare with de Guzman decision, Art. 1732 makes no distinction between casual carriers and
professional carriers. 2 Same rulings in Philamgen v. PKS Shipping & Fabre Jr. v. CA, hence these cases are omitted.
2703 4
the general public, and one who offers services or solicits business only from
a narrow segment of the general population.
Distinction between Common Carriers, Private Carriers, and
Asia Lighterage and Shipping Inc. v. CA Other Types of Contracts
The test to determine whether a party is a common carrier is whether the Planters Product Inc. v. CA
given undertaking is a part of the business engaged in by the carrier which he
Art. 1733 requires that common carriers should observe extraordinary
has held out to the general public as his occupation. The quantity or extent of
diligence in the vigilance over the goods the carry. In case of loss,
the business transacted is NOT the determining factor.
destruction or deterioration of goods, common carriers are presumed to have
Sps. Cruz v. Sun Holidays Inc. been at fault or to have acted negligently. As to the recovery of damages
against common carrier on the goods shipped, the Rule is that the shipper or
Under the Civil Code, common carriers, from the nature of their business and
consignee should first prove the fact of shipment and its consequent
for reasons of public policy, are bound to observe extraordinary diligence
loss or damage while the goods are in the possession of the carrier.
for the safety of the passengers transported by them, according to all the
circumstances of each case. They are bound to carry the passengers safely as Art. 1733. Common carriers, from the nature of their
far as human care and foresight can provide, using the utmost diligence of business and for reasons of public policy, are bound to
very cautious persons, with due regard for all the circumstances. observe extraordinary diligence in the vigilance over the
Legal Effect goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.
Isaac v. A.L. Ammen Trans. Co.
Such extraordinary diligence in the vigilance over the goods
To prove the exercise of extraordinary diligence, the petitioner must do more is further expressed in Articles 1734,4 1735,5 and 1745,6 Nos.
than merely show the possibility that some other party could be responsible 5, 6, and 7, while the extraordinary diligence for the safety
for the damage. It must prove that it used ―all reasonable means to of the passengers is further set forth in Articles 17557 and
ascertain the nature and characteristic of goods tendered for transport 1756.8
and that it exercised due care in the handling thereof.‖
Cangco v. MRR
The Court differentiated Culpa Aquillana from Culpa 4 This refers to the list of circumstances exempting Common Carriers from liability for damage or
Contractual. Manresa discusses that if the master has not been guilty of injury.
any negligence in the selection and direction of the servant,3 he is NOT liable 5 Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article
for the acts of the latter, whatever done within the scope of his employment [A/N: That is, those circumstances in Art. 1734], 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
or not, if the damage done by the servant does not amount to a breach of the they observed extraordinary diligence as required in Article 1733.
contract between the master and the person injured. This is extra-contractual 6 Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and
culpa. contrary to public policy:
Philippine Rabbit Bus Lines v. IAC xxx
The court here reiterated that the principle of the last clear chance does not (5) That the common carrier shall not be responsible for the acts or omission 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
arise when passengers sue the carrier to enforce its contractual obligations. grave or irresistible threat, violence or force, is dispensed with or diminished;
This principle only arises in quasi-delicts. (7) That the common carrier is 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.
7 Article 1755. A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the
circumstances.
8 Article 1756. In case of death of or injuries to passengers, common carriers are presumed to have
been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence
3 As a rule, there exists a presumption that the master is negligent in choosing its employees. as prescribed in articles 1733 and 1755.
2703 5
association of persons are regarded as carriers and are classified as private

or special carriers and common or public carriers.
Cargolift Shipping Inc v. Actuario Marketing Corp
The Carrier is bound to observe ordinary diligence in the performance of its
obligation under a contract of towage. The negligence of the obligor in the
performance of the obligation renders him liable for damages for the OBLIGATIONS OF COMMON CARRIERS
resulting loss suffered by the obligee. Fault or negligence of the obligor
consists in his failure to exercise due care and prudence in the performance Duty to Accept
of the obligation as the nature of the obligation so demands. Fisher v. Yangco Steamship Co.
Delgado Brothers v. Home Insurance Inc. Whatever may have been the rule at common law, common carriers in this
The petitioner's functions as arrastre operator are (1) to receive, handle, care jurisdiction cannot lawfully decline to accept a particular class of goods for
for, and deliver all merchandise imported and exported, upon or passing over carriage to the prejudice of the traffic in those goods unless it appears that for
Government-owned wharves and piers in the Port of Manila, (2) as well as to some sufficient reason the discrimination against the traffic in such goods is
record or check all merchandise which may be delivered to said port at reasonable and necessary. Mere prejudice or whim will not suffice. The
shipside, and (3) in general, to furnish light and water services and other grounds of the discrimination must be substantial ones, such as will justify
incidental services in order to undertake its arrastre service. There is nothing the courts in holding the discrimination to have been reasonable and
in those functions which relate to the trade and business of navigation nor to necessary under all the circumstances of the case.
the use or operation of vessels. As such maritime law is inapplicable to It follows that the refusal by a particular vessel engaged as a common carrier
determine the liability of an arrastre operator. of merchandise in the coastwise trade in the Philippine Islands to accept such
Mindanao Terminal and Brokerage Services Inc. v. Phoenix explosives for carriage constitutes a violation of the prohibitions against
Assurance Co. of New York discrimination penalized under the statute, unless it can be shown that there
is so real and substantial a danger of disaster necessarily involved in the
ARRASTRE STEVEDORE 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
 Handling of the cargo in the discretion on the part of the shipowner.
 Hauling of cargo
holds of the vessel or between Southern Lines, Inc. v. CA
 Comprehends the the ship’s tackle and the holds
handling of cargo on the of the vessel The carrier is not relieved from liability if improper packing of goods was
wharf or between the apparent. — If the fact of improper packing is known to the carrier or his
 responsibility ends upon the
establishment of the servants, or apparent upon ordinary observation, but it accepts the goods
loading and stowing of the
consignee or shipper and notwithstanding such condition, it is not relieved of liability for loss or injury
cargo in the vessel
the ship’s tackle resulting therefrom.
 A stevedore is not a common
 Lasts until the delivery of
carrier, because it does not Martini, Ltd. v. Macondray & Co.
the cargo to the consignee
transport goods or
 Service performed by passengers; it is not akin to Where cargo is, with the owner's consent, transported on the deck of a sea-
longshoremen a warehousemen for it does going vessel upon a bill of lading exempting the ship's company from liability
not store goods for profit for damage, the risk of any damage resulting from carriage on deck, such as
the damage caused by rain or the splashing aboard of sea water, must be
borne by the owner.
Crisostomo v. CA
A contract of carriage or transportation is one whereby a certain person or
association of persons obligate themselves to transport persons, things,
or news from one place to another for a fixed price. Such person or
2703 6
Duty to Deliver Tan Chiong Sian v. Inchausti

Saludo Jr. v. CA Loss of a ship and of its cargo, in a wreck due to accident or force majeure
must, as a general rule, fall upon their respective owners, except in cases
While the extraordinary diligence statutorily required to be observed by the
where the wrecking or stranding of the vessel occurred through malice,
carrier instantaneously commences upon delivery of the goods thereto, for
carelessness or lack of skill on the part of the captain and in the remaining
such duty to commence there must in fact have been delivery of the cargo
cases indicated in article 841 of the Code of Commerce. Under article the
subject of the contract of carriage. Only when such fact of delivery has been
Code of Commerce, transportation of merchandise is for account, risk and
unequivocally established can the liability for loss, destruction or
hazard of the shipper, unless the contrary has been expressly stipulated. The
deterioration of goods in the custody of the carrier, absent the excepting
carrier is exempt from liability if he proves, as it is incumbent upon him to
causes under Article 1734, attach and the presumption of fault of the carrier
do, that the loss or destruction of the merchandise was due to accident and
under Article 1735 be invoked. The facts in the case belie the averment that
force majeure and not to fraud, fault, or negligence on the part of the captain
there was delivery of the cargo to the carrier on October 26, 1976. Rather, as
or owners of the ship.
earlier explained, the body intended to be shipped as agreed upon was, really
placed in the possession and control of PAL on October 28, 1976 and it was Trans-Asia Shipping Lines v. CA
from that date that private respondents became responsible for the agreed
Under Article 1733 of the Civil Code, the petitioner was bound to observe
cargo under their undertakings in PAL Airway Bill No. 079-01180454.
extraordinary diligence in ensuring the safety of the private respondent. That
Consequently, for the switching of caskets prior thereto which was not caused
meant that the petitioner was, pursuant to Article 1755 of the said Code,
by them, and subsequent events caused thereby, private respondents cannot
bound to carry the private respondent safely as far as human care and
be held liable.
foresight could provide, using the utmost diligence of very cautious persons,
Maersk Lines v. CA with due regard for all the circumstances.
While it is true that common carriers are not obligated by law to carry and to For a vessel to be seaworthy, it must be adequately equipped for the voyage
deliver merchandise, and persons are not vested with the right to prompt and manned with a sufficient number of competent officers and crew. The
delivery, unless such common carriers previously assume the obligation to failure of a common carrier to maintain in seaworthy condition its vessel
deliver at a given date or time, delivery of shipment or cargo should at least involved in a contract of carriage is a clear breach of its duty prescribed in
be made within a reasonable time. In Saludo, Jr. v. Court of Appeals, this Article 1755 of the Civil Code.
Court held: "The oft-repeated rule regarding a carrier's liability for delay is
Eastern Shipping v. CA
that in the absence of a special contract, a carrier is not an insurer against
delay in transportation of goods. When a common carrier undertakes to The common carrier's duty to observe the requisite diligence in the shipment
convey goods, the law implies a contract that they shall be delivered at of goods lasts from the time the articles are surrendered to or unconditionally
destination within a reasonable time, in the absence, of any agreement as to placed in the possession of, and received by, the carrier for transportation
the time of delivery. But where a carrier has made an express contract to until delivered to, or until the lapse of a reasonable time for their acceptance,
transport and deliver property within a specified time, it is bound to fulfill its by the person entitled to receive them When the goods shipped either are
contract and is liable for any delay, no matter from what cause it may have lost or arrive in damaged condition, a presumption arises against the carrier
arisen. ― of its failure to observe that diligence, and there need not be an express
finding of negligence to hold it liable. There are, of course, exceptional cases
An examination of the subject bill of lading shows that the subject shipment
when such presumption of fault is not observed but these cases, enumerated
was estimated to arrive in Manila on April 3, 1977. While there was no special
in Article 1734 of the Civil Code, are exclusive, not one of which can be
contract entered into by the parties indicating the date of arrival of the
applied to this case.
subject shipment, petitioner nevertheless, was very well aware of the specific
date when the goods were expected to arrive as indicated in the bill of lading Lu Do v. Binamira
itself. In this regard, there arises no need to execute another contract for the
purpose, as it would be a mere superfluity. In the case before us, we find that While delivery of the cargo to the customs authorities is not delivery to the
a delay in the delivery of the goods spanning a period of 2 months and 7 days consignee, or "to the person who has a right to receive them" contemplated in
falls way beyond the realm of reasonableness. Article 1736 of the New Civil Code, because in such case the goods are still in
2703 7
the hands of the Government and the owner cannot exercise dominion over Japan Airlines v. Asuncion
them, however the parties may agree to limit the liability of the carrier
Under Article 1755 of the Civil Code, a common carrier such as JAL is bound
considering that the goods have still to go through the inspection of the
to carry its passengers safely as far as human care and foresight can provide,
customs authorities before they are actually turned over to the consignee.
using the utmost diligence of very cautious persons, with due regard for all
This is a situation where the carrier loses control of the goods because of a
the circumstances. When an airline issues a ticket to a passenger, confirmed
custom regulation and it is unfair that it be made responsible for any loss or
for a particular flight on a certain date, a contract of carriage arises. The
damage that may be caused to the goods during the interregnum.
passenger has every right to expect that he be transported on that flight
and on that date and it becomes the carrier’s obligation to carry him and
his luggage safely to the agreed destination. If the passenger is not so
Extraordinary Diligence of Common Carriers
transported or if in the process of transporting he dies or is injured, the
Vigilance over Goods carrier may be held liable for a breach of contract of carriage.
Belgian Overseas v. Philippine First Insurance Co. Calalas v. CA
Well-settled is the rule that common carriers, from the nature of their  As a rule, the doctrine of proximate cause is only applicable in
business and for reasons of public policy, are bound to observe actions for quasi-delict, not in actions involving breach of contract.
extraordinary diligence and vigilance with respect to the safety of The doctrine is a device for imputing liability to a person where there
the goods and the passengers they transport. This extraordinary is no relation between him and another party. It is an obligation is
responsibility lasts from the time the goods are unconditionally placed in the created by law itself. However, where there in fact a pre-existing
possession of and received for transportation by the carrier until they are contractual relation between the parties, it is the parties themselves
delivered, actually or constructively,9 to the consignee or to the person who who create the obligation, and the function of the law is merely to
has a right to receive them. regulate the relation thus created.
Safety of Passengers  Contracts of Carriage operate thusly, and the provisions of law
(particularly the Civil Code), dictate the level of diligence required of
Juntilla v. Fontamar common carriers with regard to the safety of passengers, as well as
the presumption of negligence in cases of death or injury to
The source of a common carrier's legal liability is the contract of
passengers
carriage. By entering into the said contract, it binds itself to carry the
passengers safely as far as human care and foresight can provide,using the La Mallorca v. CA
utmost diligence of a very cautious person, with a due regard for all the
The relation of carrier and passenger does not necessarily cease where the
circumstances
latter, after alighting from the car, aids the carrier's servant or employee in
Kapalaran US Line v. Coronado removing his baggage from the car As a rule, the relation of carrier and
passenger does not cease at the moment the passenger alights from the
The law requires petitioner, as common carrier, to exercise extraordinary
carrier's vehicle at a place selected by the carrier at the point of destination,
diligence in carrying and transporting their passengers safely “as far as
but continues until the passenger has had a reasonable time or a
human care and foresight can provide, using the utmost diligence
reasonable opportunity11 to leave the carrier's premises.12
of very cautious persons, with due regard for all circumstances.”10
The beneficiaries of this mandate are not just the passengers but also
pedestrians and the owners and passengers of other vehicles who
are equally entitled to the safe and convenient use of our roads and highways.
11 What is a reasonable time or a reasonable delay within this rule is to be determined from all the
9 E.g. Consigned to an agent of the owner thereof. circumstances.
10 Art. 1755, NCC. 12 That is to say, not ONLY his vehicle, but his immediate premises.
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LIABILITIES OF COMMON CARRIERS Valenzuela Hardwood and Industrial Supply V. CA

In a contract of private carriage, the parties may validly stipulate that
Presumption of Negligence responsibility for the cargo rests solely on the charterer, exempting the
Ynchausti Steamship Co. v. Dexter shipowner from liability. The stipulation is valid because it is freely entered
into by the parties and the same is not contrary to law, morals, good customs,
Under Sec. 646 of the Administrative Code, it is the duty of the consignee to public order, or public policy.13
make a full notation of any loss, evidence or damage on the bill of lading.
Under the doctrine of presumption of negligence of a Common Carrier, APL v. Kleeper
the General Rule is that mere proof of delivery of goods in good order to a Where the bill of lading provides that a shipper or consignee who accepts the
carrier, and proof of their arrival at the place of destination in bad order, bill becomes bound by all the stipulations contained therein, the said shipper
makes a prima facie case against the carrier. The exception to this is where or consignee cannot elude its provisions simply because they
there is an explanation given which demonstrates that the loss or damage is prejudice him and take advantage of those that are beneficial to him.
due to accident or some other circumstance inconsistent with its
liability Edgar Cokaliong Shipping Lines, Inc v. UCPB Gen. Insurance Co.
Mirasol v. The Robert Dollar Co. A stipulation in the bill of lading limiting the common carriers liability for
loss or destruction of a cargo to a certain sum, unless the shipper or owner
As a rule, when goods are delivered on board ship in good order and declares a greater value, is sanctioned by law, particularly Articles 1749
condition, and the shipowner delivers them to the shipper in bad order and 1750 of the Civil Code.
and condition, it then devolves upon the shipowner to both allege and prove
that the goods were damaged by reason of some fact which legally exempts
him from liability; otherwise, the shipper would be left without any redress, Art. 1749. A stipulation that the common carrier's liability
no matter what may have caused the damage. is limited to the value of the goods appearing in the bill of
lading, unless the shipper or owner declares a greater
value, is binding.
Limitation of Liability for Negligence
Loadstar Shipping Co. Inc. v. CA
Art. 1750. A contract fixing the sum that may be recovered
The doctrine of limited liability does not apply where there was negligence on by the owner or shipper for the loss, destruction, or
the part of the vessel owner or agent. The petitioner in this case was at fault deterioration of the goods is valid, if it is reasonable and
or negligent in not maintaining a seaworthy vessel and in having allowed its just under the circumstances, and has been freely and fairly
vessel to sail despite knowledge of an approaching typhoon. Three kinds of
agreed upon.
stipulations have often been made in a bill of lading.
1. Exempting the carrier from any and all liability for loss or damage
occasioned by its own negligence. Available Defenses
2. Providing for an unqualified limitation of such liability to an agreed
Exercise of Extraordinary Diligence
valuation.
Art. 1735. In all cases other than those mentioned in Nos. 1,
3. Limiting the liability of the carrier to an agreed valuation unless the 2, 3, 4, and 5 of the preceding article, if the goods are lost,
shipper declares a higher value and pays a higher rate of freight.
destroyed or deteriorated, common carriers are presumed
According to an almost uniform weight of authority, the 1 st and 2nd kinds of
stipulations are INVALID as being contrary to public policy, but the 3rd is
VALID and ENFORCEABLE. 13Article 6 of the Civil Code provides that (r)ights may be waived, unless the waiver is contrary to law,
public order, public policy, morals, or good customs, or prejudicial to a person with a right recognized
by law.
2703 9
to have been at fault or to have acted negligently, UNLESS  Seaworthiness relates to a vessel's actual condition. Neither the
THEY PROVE THAT THEY OBSERVED granting of classification or the issuance of certificates establishes
EXTRAORDINARY DILIGENCE as required in Article seaworthiness. (2-A Benedict on Admiralty, 7-3, Sec. 62)
1733.  Diligence in securing certificates of seaworthiness does not satisfy
the vessel owner's obligation. Also securing the approval of the
shipper of the cargo, or his surveyor, of the condition of the vessel or
Force Majeure14 her stowage does not establish due diligence if the vessel was in fact
unseaworthy, for the cargo owner has no obligation in relation to
Eastern Shipping Lines v. The Nisshin Fire & Marine Insurance seaworthiness.
Co
Mecenas et al v. CA
The heavy seas and rains referred to in the master’s report were not caso
fortuito, but normal occurrences that an ocean going vessel, particularly in  In respect of the petitioners’ claim for exemplary damages, it is only
the month of September which, in our area, is a month of rains and heavy necessary to refer to Article 223215 of the Civil Code. Exemplary
seas would encounter as a matter of routine. damages are designed by our civil law to permit the courts to reshape
behaviour that is socially deleterious in its consequence by creating
Seaworthiness in Carriage by Sea negative incentives or deterrents against such behaviour.
 In requiring compliance with the standard which is in fact that of the
RIGHTS AND IMMUNITIES highest possible degree of diligence, from common carriers and in
Section 4. Neither the carrier nor the ship shall be liable creating a presumption of negligence against them, the law seeks to
for loss or damage arising or resulting from compel them to control their employees, to tame their reckless
unseaworthiness unless caused by want of due diligence on instincts and to force them to take adequate care of human beings
the part of the carrier to make the ship seaworthy… and their property.
Whenever loss or damage has resulted from Negros Navigation Co, Inc. v. CA
unseaworthiness, the burden of proving the exercise of due The rule is well-entrenched in our jurisprudence that a shipowner may be
diligence shall be on the carrier or other persons claiming held liable for injuries to passengers notwithstanding the exclusively real
exemption under the section. and hypothecary16 nature of maritime law if fault can be attributed to the
shipowner. In Mecenas, this Court found petitioner guilty of negligence in:
Delsan Transport Lines v. CA
1. Allowing or tolerating the ship captain and crew members in playing
Payment made by the private respondent for the insured value of the lost mahjong during the voyage,
cargo operates as a waiver of private respondent's right to enforce the term of
the implied warranty against Caltex under the marine insurance policy. 2. In failing to maintain the vessel seaworthy; and,
However, the same cannot be validly interpreted as an automatic admission 3. In allowing the ship to carry more passengers than it was allowed to
of the vessel's seaworthiness by the private respondent as to foreclose carry.
recourse against the petitioner for any liability under its contractual
obligation as a common carrier. The fact of payment grants the private Petitioner is, therefore, clearly liable for damages to the full extent.
respondent subrogatory right which enables it to exercise legal remedies that
would otherwise be available to Caltex as owner of the lost cargo against the
petitioner common carrier. 15 Art. 2332. In contracts and quasi-contracts, the court may exemplary damages if the defendant
acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.
16 Aboitiz Shipping Corp. v. General Accident Insurance [G.R. No. 100446 | January 21,
1993]: ―The real and hypothecary nature of maritime law simply means that the liability of the carrier
in connection with losses related to maritime contracts is confined to the vessel, which is hypothecated
14 Principal Source: Art. 1734, NCC. for such obligations or which stands as the guaranty for their settlement.‖
2703 10
Airworthiness in Carriage by Air of carriage, the court need not make an express finding of fault or negligence
on the part of the carrier in order to hold it responsible for the payment of
Abeto v. PAL damages sought by the passenger.17 This liability of the common carrier does
In an action based on a contract of carriage, the court need not make an not cease upon proof that it exercised all the diligence of a good father of a
express finding of fault or negligence on the part of the carrier in order to family in the selection of its employees. Clearly, by the contract of carriage,
hold it responsible to pay the damages sought for by the passenger. By the the carrier jeepney owned by Mallari, Sr. assumed the express obligation to
contract of carriage, the carrier assumes the express obligation to transport the passengers to their destination safely and to observe
transport the passenger to his destination safely and to observe extraordinary extraordinary diligence with due regard for all the circumstances, and any
diligence with a due regard for all the circumstances, and any injury that injury or death that might be suffered by its passengers is right away
might be suffered by the passenger is right away attributable to the fault or attributable to the fault or negligence of the carrier.
negligence of the carrier. This is an exception to the general rule that Phil Rabbit Bus Lines v. IAC
negligence must be proved.
 In delicts which are culpa contractual, the moment a passenger dies
Cathay Pacific Airways v. CA or is injured, the carrier is presumed to have been at fault or to have
 Moral damages are predicated upon a breach of contract of carriage, acted negligently, and this disputable presumption may only be
and may only be recoverable in instances where the mishap results in overcome by evidence that he had observed extraordinary
death of a passenger, or where the carrier is guilty of fraud or diligence, or that the death or injury of the passenger was due to a
bad faith. fortuitous event.
 In this case, while a breach in the contract of carriage is  In addition, the driver cannot be held jointly and severally liable
demonstrable, the airline in this case was not shown to have acted with the carrier in case of breach of the contract of carriage. The
fraudulently or in bad faith. As a rule, liability for damages is limited rationale behind this is readily discernible.
to the natural and probable consequences of the breach of obligation o Firstly, the contract of carriage is between the carrier and the
which the parties had foreseen or could have reasonably foreseen. passenger, and in the event of contractual liability, the
Thus, the airline’s liability ought not include moral and exemplary carrier is exclusively responsible therefore to the passenger,
damages. even if such breach be due to the negligence of his driver.
 Conversely, if the defendant airline is shown to have acted o Secondly, if the driver is made jointly and severally liable
fraudulently or in bad faith, the award of moral and exemplary with the carrier, that would make the carrier's liability
damages is proper. personal instead of merely vicarious and consequently,
Northwest Airlines v. Laya entitled to recover only the share which corresponds to the
driver, contradictory to the explicit provision of Article 2181
While the protection of passengers must take precedence over convenience, of the New Civil Code.
the implementation of security measures must be attended by basic
ourtesies. Any security measure must coincide with the passenger’s Sarkies Tours Phils, Inc v. CA
RIGHT to be treated by the carrier with kindness, respect and utmost The rule in this case is that where the common carrier accepted its
consideration in all matters relative to their trip. passengers baggage for transportation, and even had it placed in the vehicle
by its own employee, its failure to collect the freight charge is the
common carrier’s own lookout. It is responsible for the consequent loss of the
Good Condition in Carriage by Land baggage, notwithstanding the failure to make such a collection.
Mallari Sr. v. CA
The negligence and recklessness of the driver of the passenger jeepney is
binding against the owner thereof. As a rule, in an action based on contract
17 Refer to Abeto v. PAL, hereinabove.
2703 11
Negligence of Shipper/Owner
Sole & Proximate Cause: Absolute Defense BILL OF LADING
Art. 1739. In order that the common carrier may be Magellan Mfg. Marketing Corp v. CA
exempted from responsibility, the natural disaster must An on-board bill of lading is issued immediately after the goods are
have been the proximate and only cause of the loss. already placed in the vessel which will transport such; On the other
However, the common carrier must exercise due diligence hand, a shipment bill of lading is issued upon receipt of goods for a later
to prevent or minimize loss before, during and after the date of shipping, that the goods are not yet placed in the vessel yet.19
occurrence of flood, storm or other natural disaster in order Samar Mining Co, Inc v. Nordeutcher Lloyd, et al.
that the common carrier may be exempted from liability for
Under Article 1736, the carrier may be relieved of the responsibility for loss
the loss, destruction, or deterioration of the goods. The
or damage to the goods upon actual or constructive delivery of the
same duty is incumbent upon the common carrier in case of same by the carrier to the consignee, or to the person who has a right to
an act of the public enemy referred to in Article 1734, No. receive them. There is actual delivery in contracts for the transport of goods
2.18 when possession has been turned over to the consignee or to his duly
authorized agent and a reasonable time is given him to remove the goods.
The court a quo found that there was actual delivery to the consignee through
Art. 1742. Even if the loss, destruction, or deterioration of
its duly authorized agent, the carrier.
the goods should be caused by the character of the goods, or
the faulty nature of the packing or of the containers, the Article 1736. The extraordinary responsibility of the
common carrier must exercise due diligence to forestall or common carrier lasts from the time the goods are
lessen the loss. unconditionally placed in the possession of, and received by
the carrier for transportation until the same are delivered,
Contributory Negligence: Partial Defense actually or constructively, by the carrier to the consignee,
or to the person who has a right to receive them, without
Art. 1741. If the shipper or owner merely contributed to the
prejudice to the provisions of article 1738.20
loss, destruction or deterioration of the goods, the
proximate cause thereof being the negligence of the
common carrier, the latter shall be liable in damages, which Contract of Adhesion
however, shall be equitably reduced. Sweet Lines Inc. v. Teves
With respect to the conditions printed at the back of the tickets (commonly
Art. 1762. The contributory negligence of the passenger known as contracts of adhesion), the validity and/or enforceability of
does not bar recovery of damages for his death or injuries, such depend on the peculiar circumstances obtaining in each case and nature
if the proximate cause thereof is the negligence of the of the conditions or terms sought to be enforced. This is because these
common carrier, but the amount of damages shall be agreements, and the terms thereof, have been almost uniformly drafted by
equitably reduced. only one party. These are contracts of adhesion, because the only
participation of the party is the signing of his signature or his ―adhesion‖
thereto.
Art. 1761. The passenger must observe the diligence of a
good father of a family to avoid injury to himself. 19This distinction is only relevant in this case because the contracting parties required an on-board bill
of lading in their agreement.
20 Art. 1738. The extraordinary liability of the common carrier continues to be operative even during
the time the goods are stored in a warehouse of the carrier at the place of destination, until the
consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to
18 i.e. ―(2) Act of the public enemy in war, whether international or civil;…‖ remove them or otherwise dispose of them.
2703 12
Servando v. Philippine Steam Navigation, Co 6. That the common carrier's liability for acts committed by
Agreement was in iteration of Article 1174, which states that ―Except in cases thieves, or of robbers who do not act with grave or
expressly specified by the law, or when it is otherwise declared by stipulation, irresistible threat, violence or force, is dispensed with or
or when the nature of the obligation requires the assumption of risk, no diminished;
person shall be responsible for those events which could not be foreseen, or 7. That the common carrier is not responsible for the
which, though foreseen, were inevitable.‖21 loss, destruction, or deterioration of goods on
Stipulations account of the defective condition of the car, vehicle,
Art. 1744. A stipulation between the common carrier and ship, airplane or other equipment used in the contract of
the shipper or owner limiting the liability of the former for carriage.
the loss, destruction, or deterioration of the goods to a
degree less than extraordinary diligence shall be valid, Art. 1752. Even when there is an agreement limiting the
provided it be: liability of the common carrier in the vigilance over the
1. In writing, signed by the shipper or owner; goods, the common carrier is disputably presumed to have
2. Supported by a valuable consideration other than the been negligent in case of their loss, destruction or
service rendered by the common carrier; and deterioration.
3. Reasonable, just and not contrary to public policy.
Art. 1745. Any of the following or similar stipulations shall H.E. Heacock Co v. Macondray & Company, Inc
be considered UNREASONABLE, UNJUST and Stipulations regarding liability of carrier for loss of or damage to
CONTRARY TO PUBLIC POLICY: cargo; validity of such stipulations: Three kinds of stipulation have
1. That the goods are transported at the risk of the owner often been made in a bill of lading:
or shipper;  The first is one exempting the carrier from any and all liability
2. That the common carrier will not be liable for any loss, for loss or damage occasioned by its own negligence. (invalid as
destruction, or deterioration of the goods; being contrary to public policy)
3. That the common carrier need not observe any  The second is one providing for an unqualified limitation of such
diligence in the custody of the goods; liability to an agreed valuation. (invalid as being contrary to
4. That the common carrier shall exercise a degree of public policy)
diligence less than that of a good father of a family,
 The third is one limiting the liability of the carrier to an agreed
or of a man of ordinary prudence in the vigilance over the valuation unless the shipper declares a higher value and pays a
movables transported; higher rate of freight. (valid and enforceable.)
5. That the common carrier shall not be responsible for
INVALID: A stipulation in a bill of lading which either exempts the carrier
the acts or omission of his or its employees; from liability for loss or damage occasioned by its negligences or provides
for an unqualified limitation of such liability to an agreed valuatio
21 'Caso fortuito' presents the following essential characteristics: Vlaid and enforceable: Astipulation in such bill of lading which limits the
1. The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to liability of the carrier to a specified amount unless the shipper declares a
comply with his obligation, must be independent of the human will; higher value and pays a higher rate of freight.
2. It must be impossible to foresee the event which constitutes the 'caso fortuito', or if it can be
foreseen, it must be impossible to avoid;  Thus, if a common carrier gives to a shipper the choice of two rates,
3. The occurrence must be such as to render it impossible for the debtor to fulfill his obligation
in a normal manner; and, the lower of them conditioned upon his agreeing to a stipulated
4. The obligor must be free from any participation in the aggravation of the injury resulting to valuation of his property in case of loss, even by the carrier's
the creditor.
2703 13
negligence, if the shipper makes the choice understandingly and 3. OBJECT, which is the transportation of the passenger from the
freely, and names his valuation, he cannot thereafter recover more place of departure to the place of destination which are stated in the
than the value which he thus places upon his property. ticket.
Shewaram v. PAL Phil Am Gen Insurance Co. Inc v. Sweet Line et al.
The law that may be invoked in this connection is Art. 175022 of the New Civil Stipulations in bills of lading or other contracts of shipment which require
Code. In accordance with the above provision, the pecuniary liability of a notice of claim for loss of or damage to goods shipped in order to impose
common carrier may, by contract, be limited to a fixed amount. It is liability on the carrier operate to prevent the enforcement of the contract
required, however, that the contract must be "reasonable and just under the when not complied with, that is, notice is a condition precedent and the
circumstances and has been fairly and freely agreed upon." carrier is not liable if notice is not given in accordance with the stipulation, as
the failure to comply contract of carriage with respect to notice of loss or
Evidence
claim for damage bars recovery for the loss or damage suffered.
COGSA, Sec. 3 (4). Such a bill of lading shall be prima
facie evidence of the receipt by the carrier of the goods as Receipt
therein described in accordance with paragraphs (3) (a), Saludo Jr. v. CA
(b), and (c) of this section: Provided, That nothing in this
A bill of lading23 is a written acknowledgment of the receipt of the
Act shall be construed as repealing or limiting the goods and an agreement to transport and deliver them at a specified place to
application of any part of the Act, as amended, entitled "An a person named or on his order. This Bill is both a receipt and a contract: it is
Act relating to bills of lading in interstate and foreign a receipt as to the quantity and description of the goods shipped and a
commerce," approved August 29, 1916… contract to transport the goods to the consignee or other person therein
designated, on the terms specified in such instrument.
De Guerrero, et al v. Madrigal Shipping Co. Inc.
Wallem Phils. Shipping et al., v. Prudential Guarantee &
Where the complaint shows that appellants' cause of action is predicated on Assurance Inc. et al.
the failure of appellee to comply with its contract of carrying safely the
deceased from one place to another, in that the vessel on which he was riding Since the relationship of an arrastre operator and a consignee is akin to that
belonging to appellee capsized because of the reckless and imprudent between a warehouseman and a depositor, then, in instances when the
manner it was managed and steered by its crew, it can be implied that the consignee claims any loss, the burden of proof is on the arrastre operator to
transportation was under taken by virtue of a written contract of carriage. show that it complied with the obligation to deliver the goods and that the
losses were not due to its negligence or that of its employee. Failing to
It is a matter of common knowledge that whenever a passenger boards a ship present the necessary evidence, ATI was unable to overcome the presumption
for transportation from one place to another he is issued a ticket by the of its own negligence while in the custody of the goods
shipper which has all the elements of a written contract namely:
1. the CONSENT of the contracting parties manifested by the fact that
the passenger boards the ship and the shipper consents or accepts Notice of Claim
him in the ship for transportation; NCC, Art. 1144. The following actions must be brought
2. CAUSE or consideration which is the fare paid by the passenger as within ten years from the time the right of action accrues:
stated in the ticket; and (1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
22Art. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss,
destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances,
and has been fairly and freely agreed upon. 23 Such instrument may also be called a shipping receipt, forwarder's receipt and receipt for
transportation.
2703 14
NCC, Art. 1145. The following actions must be commenced

within six years:
(1) Upon an oral contract; DAMAGES FOR BREACH OF CONTRACT BY COMMON
(2) Upon a quasi-contract. CARRIERS
COGSA, Section 3. (1) The carrier shall be bound, before Villa Rey Transit Inc. v. CA
and at the beginning of the voyage, to exercise due diligence  The determination of such amount depends, mainly upon two (2)
to — factors:
(a) Make the ship seaworthy; 1. The number of years on the basis of which the damages shall
(b) Properly man, equip, and supply the ship; be computed; and
(c) Make the holds, refrigerating and cooling chambers, and 2. The rate at which the losses sustained by said respondents
all other parts of the ship in which goods are carried, fit and should be fixed
safe for their reception carriage and preservation.  The determination of the indemnity to be awarded to the heirs of a
deceased person has therefore no fixed basis. Much is left to the
Cordoba v. Warner, Barnes & Co. discretion of the court considering the moral and material damages
As a rule, receipt of the merchandise in the warehouse is not that receipt involved, and so it has been said that there can be no exact or
of merchandise contemplated in Art. 366 of the Commercial Code. uniform rule for measuring the value of a human life and the
This article, which prescribes the time to present claims (twenty-four (24) measure of damages cannot be arrived at by precise mathematical
hours from receipt of merchandise), is inapplicable in the instant case, calculation, but the amount recoverable depends on the particular
since this prescriptive period does not commence until the consignee has facts and circumstances of each case.
received possession of the merchandise in a manner allowing ―the ordinary
control pertinent to ownership.‖  The life expectancy of the deceased or of the beneficiary, whichever is
shorter, is an important factor; other factors that are usually
Roldan v. Lim Ponzo & Co. considered are:
Article 366 of the Commercial Code is limited to cases of claims for 1. pecuniary loss to plaintiff or beneficiary
damage to goods actually turned over by the carrier and received by the 2. loss of support
consignee, whether those damages be apparent from an examination of the 3. loss of service
packages in which the goods are delivered, or of such a character that the
4. loss of society
nature and extent of the damage is not apparent until the packages are
opened and the contents examined. It has no application in cases wherein the 5. mental suffering of beneficiaries
goods entrusted to the carrier are NOT delivered by the carrier to the 6. medical and funeral expenses
consignee. In such cases there can be no question of a claim for damages
Baliwag Transit v. CA
suffered by the goods while in transport, since the claim for damages arises
exclusively out of the failure to make delivery. In the absence of any contract of carriage between Baliwag and George's
parents, the latter are not real parties-in-interest in an action for breach
of that contract. The contract of carriage was actually between George, as the
paying passenger, and Baliwag, as the common carrier. As such carrier,
Baliwag was bound to carry its passengers safely as far as human care and
foresight could provide, and is liable for injuries to them through the
negligence or wilful acts of its employees (Articles 1755 and 1759, Civil
Code). Thus, George had the RIGHT to be safely brought to his destination
and Baliwag had the correlative obligation to do so. Since a contract may be
2703 15
violated only by the parties thereto, as against each other, in an action upon MARITIME LAW
that contract, the real parties in interest, either as plaintiff or as defendant,
must be parties to said contract. Real & Hypothecary Nature26
PAL v. CA  General Rule: ―No vessel, no liability‖ – The liability of ship owner is
Petitioner contends that under the Warsaw Convention, its liability, if any, limited to the amount of interest in said vessel, such that where
cannot exceed US $20.00 based on weight as private respondent Co did not vessel is entirely lost, the obligation is EXTINGUISHED.
declare the contents of his baggage nor pay additional charges before the o This operates to limit the liability of the ship owner to the
flight. We find no merit in that contention. In Samar Mining Company, value of the vessel, earned freightage, and insurance
Inc. vs. Nordeutscher Lloyd (132 SCRA 529), this Court ruled: "The
liability of the common carrier for the loss, destruction or proceeds, if any.
deterioration of goods transported from a foreign country to the Philippines o The vessel, meanwhile, also stands as the guaranty for the
is governed primarily by the New Civil Code. In all matters not regulated by settlement of any and all claims against the ship owner.
said Code, the rights and obligations of common carriers shall be governed by  This doctrine applies not only to goods shipped, but also in other
the Code of Commerce and by Special Laws." Since the passenger's similar cases, such as death or injury to passengers.
destination in this case was the Philippines, Philippine law governs the
 Nonetheless, in case of damage or injury, the ship owner is
liability of the carrier for the loss of the passenger's luggage.
presumed negligent or at fault, and must demonstrate the
exercise of extraordinary diligence; otherwise the doctrine of limited
Carlos Singson v. CA liability cannot apply.
Although the rule is that moral damages predicated upon a breach of contract
of carriage may only be recoverable in instances where the mishap results Exceptions
in the death of the passenger,24 or where the carrier is guilty of fraud or 1. Claims under Workmen’s Compensation;27
bad faith, there are situations where the negligence of the carrier is so gross 2. Injury or damage due to shipowner or to the concurring
and reckless as to virtually amount to bad faith,25 in which case the negligence of the shipowner and the captain;
passenger likewise becomes entitled to recover moral damages. 3. The vessel is insured;
4. Expenses for repair and provisioning of the ship before its loss;
and,
5. In case there is no total loss and the vessel is not abandoned.
24 Art 1764, NCC. Damages in cases comprised in this Section shall be awarded in accordance with Abueg v. San Diego
Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger
caused by the breach of contract by a common carrier. The liability imposed by the Workmen’s Compensation Act is not liability
Art. 2206, NCC. The amount of damages for death caused by a crime or quasi-delict shall be at least
three thousand pesos, even though there may have been mitigating circumstances. In addition: for the damage to cargo, or injury to persons, but a liability created by
(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the a statute to compensate employees and labourers in cases of injury received
indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be by or inflicted upon them, while engaged in the performance of their work or
assessed and awarded by the court, unless the deceased on account of permanent physical
disability not caused by the defendant, had no earning capacity at the time of his death; employment, or the heirs and dependents and labourers and employees in
(2) If the deceased was obliged to give support according to the provisions of Article 291, the the event of death caused by their employment
recipient who is not an heir called to the decedent's inheritance by the law of testate or
intestate succession, may demand support from the person causing the death, for a period
not exceeding five years, the exact duration to be fixed by the court; ―Such compensation has nothing to do with the provisions of the Code
(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may of Commerce regarding maritime commerce. It is an item in the cost
demand moral damages for mental anguish by reason of the death of the deceased.
25Art. 2220, NCC. Willful injury to property may be a legal ground for awarding moral damages if the
court should find that, under the circumstances, such damages are justly due. The same rule applies to 26 Also known as the Doctrine of Limited Liability
breaches of contract where the defendant acted fraudulently or in bad faith. 27 Employees Compensation Commission under the Labor Code;
2703 16
of production, which must be included in the budget of any well-managed 7. For arrivals under stress; and,
industry.‖ 8. Damages due to non-observance of marine regulations.
Government of the Phil. v. Maritime Captains/Masters

As a general rule, the owners of a vessel and the vessel itself are liable for  The Captain, master or patron of the ship is the chief or commander
necessary repairs. Naturally the total destruction of the vessel extinguishes a of the ship. In general, he performs three (3) distinct roles. These
maritime lien, as there is no longer any res to which it can attach. But the are:
total destruction of the vessel does not affect the liability of the owners for 1. General Agent of the Ship Owner
repairs on the vessel completed before its loss. 2. Commander & Technical Director of the Vessel; and,
3. Representative of the Country under whose Flag he
Parties to Maritime Transportation Contracts Navigates.
 A ship captain must be accorded a reasonable measure of
Shipowners discretionary authority to decide what the safety of the ship and of its
 The shipowner (proprietario) is the person who has ownership, crew and cargo specifically requires on a stipulated ocean voyage.
possession, control and management of the vessel and the  The captain is not liable for:
consequent right to direct her navigation and receive freight earned 1. Damages cause to the vessel or to the cargo by force majeure;
and paid, while his possession continues. and,
 Civil Liabilities of the Ship Owner 2. Obligations contracted for the repair, equipment, and
1. All contracts of the captain, whether authorized or not, to provisioning of the vessel unless he has expressly bound
repair, equip, and provision the vessel;28 himself personally or has signed a bill of exchange or
2. Loss and damage to the goods loaded on the vessel without promissory note in his name.31
prejudice to their right to free themselves from liability by  The captain may not substitute himself with another in the absence
abandoning the vessel to the creditors.29 of any consent from the ship owner; If he does so, he is liable for all
 Solidary Liabilities of the Ship Owner for Captain’s Acts30 the acts of the substitute, and bound to pay the indemnity for
1. Damages to vessel and to cargo due to lack of skill and damage caused by such substitute.32
negligence;
2. Theft and robberies of the crew; Officers/Crew
3. Losses and fines for violation of laws;
 The complement of the vessel are all persons on board, from the
4. Damages due to mutinies;
captain to management, maneuvers, and service, thus including the
5. Damages due to misuse of power,
crew, the sailing mates, engineers, stokers, and other employees on
6. For deviations;
board not having specific designations; but, it shall not include the
28 Article 586, Code of Commerce. The shipowner and the ship agent shall be civilly liable for the 31 Article 620, Code of Commerce. The captain shall not be liable for the damages caused to the
acts of the captain and for the obligations contracted by the latter to repair, equip, and provision the vessel or to the cargo by force majeure; but he shall always be so for those arising through his own
vessel, provided the creditor proves that the amount claimed was invested for the benefit of the same. fault, no agreement to the contrary being valid. Neither shall he be personally liable for the obligations
By ship agent is understood the person entrusted with provisioning or representing the vessel in the he may have contracted for the repair, equipment, and provisioning of the vessel, which shall devolve
port in which it may be found. upon the ship agent, unless the former has expressly bound himself personally or has signed a bill of
29 Article 587, Code of Commerce. The ship agent shall also be civilly liable for the indemnities in exchange or promissory note in his name.
favor of third persons which may arise from the conduct of the captain in the care of the goods which 32 Article 615, Code of Commerce. Without the consent of the agent, the captain cannot have
he loaded on the vessel; but he may exempt himself therefrom by abandoning the vessel with all her himself substituted by another person; and should he do so, besides being liable for all the acts of the
equipments and the freight it may have earned during the voyage. substitute and bound to the indemnities mentioned in the foregoing articles, the captain as well as the
30 Article 618, Code of Commerce. substitute may be discharged by the ship agent.
2703 17
passengers or the persons whom the vessel is transporting. (Art. 648,  The term generally connotes a person taken on board at a particular
Code of Commerce) place for the purpose of conducting a ship through a river, road or
 The officers or crew are freed from obligation to render service in the channel, or from a port. He becomes the master pro hac vice34 in the
following cases: command and navigation of the ship.
1. If, before beginning voyage, captain attempts to change it, or o While exercising his functions a pilot is in sole command of
a naval war with the power to which the vessel was destined the ship and supersedes the master in the command and
occurs; navigation of the ship
2. If a disease breaks out and be officially declared an epidemic o HOWEVER, the master does not surrender his vessel to the
in the port of destination; pilot and the pilot is not the master.
3. If the vessel should change owner or captain (Art 647, Code o There are occasions when the master may and should
of Commerce) interfere and even displace the pilot, as when the pilot is
 Just Causes for the Discharge of Seaman While Contract Subsists33 obviously incompetent and intoxicated.
1. Perpetration of a crime;
Charter Party
2. Repeated insubordination, want of discipline;
3. Repeated incapacity and negligence; A Charter Party Agreement is a contract whereby an entire ship or some
4. Habitual drunkenness; principal part of the said ship, is let by the owner thereof to a merchant or
5. Physical incapacity; or, other person for a specified time or use for the conveyance of goods, in
6. Desertion. consideration, of the payment of freight.
Supercargoes Bareboat Charter

 Under a Bareboat Charter, the Ship Owner leases to the charterer
 Persons who discharge administrative duties assigned to them by the whole vessel, transferring to the latter the entire command,
ship agent or shippers, keeping an account and record of transaction possession and consequent control over the vessel’s navigation,
as required in the accounting book of the captain (Art. 649, Code of including the master and the crew, who thereby becomes the
Commerce). charterer’s ―servant.‖
 A supercargo may be authorized to sell the goods at the port of  Effects of a Bareboat Charter
destination and purchase goods for the return voyage. 1. The charterer becomes the owners pro hac vice;
2. Charterer is liable for the expense of the voyage including the
Pilot wages of the seamen;
 A person duly qualified and licensed to conduct a vessel into or out of 3. The charterer is also liable for damages arising from
ports, or in certain waters. In broad sense, the term ―pilot‖ includes negligence;
both 4. Charterer assumes the customary rights and liabilities of the
a. Those whose duty is to guide vessels into or out of ports or in shipowner in relation to third persons dealing with him or
particular waters; and, with the vessel;
b. Those entrusted with the navigation of vessels on the high 5. The captain of the vessel becomes the agent of the charterer;
seas. 6. If it is a common carrier, it is converted into a private carrier.
33 Article 637, Code of Commerce. 34 i.e. ―For the time being‖

2703 18
Contract of Affreightment the person liable for demurrage is the one who assumed the duty to unload or
 A Contract of Affreightment is one whereby the owner of the vessel load the cargo but failed to fulfill it.
leases part or all of its space to haul goods for others. It may come in Exceptions
one of two kinds: 1. Where Delay is unavoidable (e.g. a delay caused by a natural disaster
1. Time Charter – vessel is chartered for a fixed period or time. or the fault of the carrier); or,
2. Voyage or Trip Charter – the vessel is leased for one or series 2. Where it is the carrier who unreasonably delays in providing
of voyages. transportation to customers.
 Effects of a Contract of Affreightment Averages
1. The charterer hires the vessel only;
2. Captain and crew remain in the employ of the shipowner;  Average in maritime commerce refers to an extraordinary or
3. The charterer acquires the right to utilize the carrying accidental expense incurred during the voyage in order to
capacity and facilities of the vessel and to designate her preserve the cargo, the vessel, or both, and all damages or
destinations for the duration of the time or voyage deterioration suffered by the vessel from departure to the port of
stipulated; destination, and to the cargo from the port of loading to the port of
4. Shipowner remains as the owner of the vessel; consignment.35
5. Shipowner liable for the expenses of the voyage.  The person whose property has been saved must contribute to
6. If it is a common carrier, it is not converted into a private reimburse the damage caused or expense incurred if the situation
carrier constituted general average.
 An average presupposes that the loss or damage is due to:
Transshipment
o An inherent defect of the goods;
 Transshipment is the act of taking cargo out of one ship and loading o An accident of the sea;
it in another, or the transfer of goods from the vessel stipulated in the o Force majeure; or,
contract of affreightment to another vessel before the place of o Negligence of the crew of the carrier.
destination named in the contract has been reached, or the transfer
for further transportation from one ship or conveyance to another. Simple or Particular
 If done without legal excuse, however, competent and safe the vessel Damages or expenses caused to the vessel or cargo that did not inure to the
into which the transfer is made, is a violation of contract and common benefit, and borne by respective owners. (Art. 809)
infringement of right of shipper and subjects carrier to liability if
freight is lost event by cause otherwise excepted. The owner of the goods which gave rise to the expense or suffered the
damage shall bear this average. (Art. 810)
Demurrage
Demurrage is a separate freight charge imposed according to the terms of a
carriage contract, upon the person responsible for unreasonable delays in 35Article 806, Code of Commerce. For the purposes of this code the following shall be considered
loading or unloading cargo. averages:
1. All extraordinary or accidental expenses which may be incurred during the voyage in order
Demurrage is intended to serve the public interest by facilitating the flow of to preserve the vessel, the cargo, or both.
commerce through the prompt loading and unloading of cargo. In general, 2. Any damages or deteriorations which the vessel may suffer from the time it puts to sea from
the port of departure until it casts anchor in the port of destination, and those suffered by
the merchandise from the time they are loaded in the port of shipment until they are
unloaded in the port of their consignment.
2703 19
General or Gross c. entry of the resolution in the logbook

Damages or expenses deliberately caused in order to save the vessel, its cargo d. detailed minutes; and,
or both from real and known risk (Art. 811). e. delivery of the minutes to the maritime judicial authority of
the first port within 24 hours from arrival ratification by
All the persons having an interest in the vessel and the cargo therein at the captain under oath.
time of the occurrence of the average shall contribute to satisfy this average
in proportion to the value of the owner’s property saved. The insurers and York-Antwerp Rules
lenders on bottomry and respondentia shall likewise contribute (Arts. 812, The York-Antwerp Rules are a set of maritime rules that were established
859 and 732) in 1890, outlining the rights and obligations of both ship and cargo owners in
case that cargo must be jettisoned in order to save a ship.
Requisites of Gross or General Average
1. Common Danger The Rules state three clear principles, all of which must be met in order for
Both the ship and the cargo are subject to the same danger, provided the rule to be applied.
that the circumstances producing the peril should be First, stipulation is that danger to the ship must be imminent;
certain and imminent. Second, there must be a voluntary jettison of a portion of the ship’s
cargo in order to save the whole; and,
2. Deliberate Sacrifice Third, the attempt to avoid the danger must be successful.
The expense or damage is deliberately incurred to save the
vessel and cargo. Usually sacrifice is made through the jettison If a situation meets all the stipulations, then all parties involved in the
of the cargo or part of the ship is thrown overboard during the maritime adventure must share proportionately in the financial burden
voyage. Also, general average may be incurred where the sinking of of the losses incurred to the owner or owners of any of the cargo that was
a vessel is necessary to extinguish a fire in a port, roadsteads, creek jettisoned in order to save the vessel.
or bay. Arrival under Stress
Likewise, there is general average where cargo is transferred to
lighten the ship on account of a storm to facilitate entry into a port.36  This refers to the arrival of a vessel at the nearest and most
convenient port instead of the port of destination, if during the
3. Success voyage the vessel cannot continue the trip to the port of
To be able to demand general contribution the vessel and the cargo destination.38
or portion thereof must be SAVED by reason of the expense or  Grounds to Allow Arrival under Stress
damage incurred or caused.
4. Proper formalities and legal steps37 38 Article 819, Code of Commerce. If during the voyage the captain should believe that the vessel
These are: cannot continue the trip to the port of destination on account of the lack of provisions, well-founded
a. assembly and deliberation; fear of seizure, privateers, or pirates, or by reason of any accident of the sea disabling it to navigate, he
shall assemble the officers and shall summon the persons interested in the cargo who may be present,
b. resolution of the captain; and who may attend the meeting without the right to vote; and if, after examining the circumstances of
the case, the reason should be considered well-founded, the arrival at the nearest and most convenient
port shall be agreed upon, drafting and entering the proper minutes, which shall be signed by all, in the
36 Article 818, Code of Commerce. If, as a necessary measure to extinguish a fire in a port, log book.
roadstead, creek, or bay, it should be decided to sink any vessel, this loss shall be considered gross The captain shall have the deciding vote, and the persons interested in the cargo, may make the
average, to which the vessels saved shall contribute. objections and protests they may deem proper, which shall be entered in the minutes in order that they
37 NOTE: Sir did not discuss this, so it might not be relevant. But it’s in the code, so it’s here. may make use thereof in the manner they may consider advisable.
2703 20
1. Captain should determine during the voyage if there is well o The maximum liability is US$500.00 per package, unless the
founded fear of seizure, privateers and other valid grounds; shipper or owner of the goods declares a higher value. It may
2. Captain shall assemble the officers and summon the persons be lowered by agreement put down in the bill of lading.
interested in the cargo who may attend the meeting but  This one-year prescriptive period also applies to the shipper, the
without a right to vote; consignee, the insurer of the goods or any legal holder of the bill of
3. The officers shall determine and agree if there is well- lading
founded reason after examining the circumstances. The Prescriptive Period
captain shall have the deciding vote;  The prescriptive period is one (1) year from date of delivery or the
4. The agreement shall be drafted and the proper minutes shall date when they should have been delivered to the arrastre operator.
be signed and entered in the log book,  The prescriptive period is interrupted by the following instances:
5. Objections and protests shall likewise be entered in the 1. An action has been filed in court; or,
minutes. 2. There is an express agreement that extra-judicial
claims/demands for damages will suspend the running of the
Collisions prescriptive period.
 A collision is an impact or sudden contact of a moving body

with an obstruction in its line of motion. As applied in
AVIATION LAW
maritime commerce, collision is an impact or sudden contact of a Edna Diago Lhuiller v. British Airways
vessel with another whether both are in motion or one is stationary.
The expression "international carriage" means any carriage in which,
 Liability for negligence in the absence of contract is governed by the
according to the contract made by the parties, the place of departure and the
Civil Code provisions on quasi-delict. However, the liabilities of ship
place of destination, whether or not there be a break in the carriage or a
owners and ship agents as well as the captain or crew in collision
transhipment, are situated either within the territories of two High
cases is still governed by the Code of Commerce provisions on
Contracting Parties, or within the territory of a single High
collision.
Contracting Party, if there is an agreed stopping place within a
territory subject to the sovereignty, suzerainty, mandate or
International Carriage of Goods by Sea authority of another Power, even though that Power is not a party to this
Convention.40
 COGSA supplements the Civil Code, and applies to all contracts of
carriage of goods coming to or from Philippine ports in foreign trade. Warsaw Convention
 GENERAL RULE: When there is damage to the goods, notice must The Warsaw Convention applies to "all international transportation of
be given by the recipient to the carrier or his agent upon receipt of persons, baggage or goods performed by any aircraft for hire." It seeks to
the goods. But if the damage is apparent/externally visible, notice accommodate or balance the interests of passengers seeking recovery for
must be given within 3 days from receipt of the goods.39 personal injuries and the interests of air carriers seeking to limit potential
o However, failure of the recipient to notify the carrier will not liability. It employs a scheme of strict liability favoring passengers and
prevent the filing of a suit for the loss/damage of the goods. imposing damage caps to benefit air carriers. The cardinal purpose of the
Warsaw Convention is to provide uniformity of rules governing claims arising
from international air travel; thus, it precludes a passenger from maintaining
39 Cokaliong Shipping Lines vs. UCPB General Insurance Co., GR 146018, June 25, 2003. 40 Article 1.2, Warsaw Convention.
2703 21
an action for personal injury damages under local law when his or her claim This being said, liability may still be claimed in full (i.e. actual damages), in
does not satisfy the conditions of liability under the Convention.41 the following instances:
1. Willful misconduct;43
2. Default amounting to willful misconduct;
Binding Effect of the Convention
3. Accepting passengers without ticket; or,
This Convention applies to all international carriage of persons,
4. Accepting goods without airway bill or baggage without baggage
luggage or goods performed by aircraft for reward. It applies equally to
check.
gratuitous carriage by aircraft performed by an air transport undertaking.42
Stipulations Waiving Liability

Limitations on Liability Any provision tending to relieve the carrier of liability or to fix a lower limit
1. In the carriage of persons – 250,000 francs for each passenger. than that which is laid down in this Convention shall be null and void but
Nevertheless, by special contract, the carrier and the passenger may the nullity of such provision does not involve the nullity of the whole
agree to a higher limit of liability. contract.44
2. In the carriage of registered baggage and of cargo – Two PUBLIC UTILITIES & PUBLIC SERVICE
hundred and fifty (250) francs per kilogram, unless the passenger or
consignor has made, at the time when the package was handed over
A public utility is a business or service engaged in regularly supplying the
to the carrier, a special declaration of interest in delivery at
public with some commodity or service of public consequence such as
destination and has paid a supplementary sum if the case so requires.
electricity, gas, water, transportation, telephone or telegraph service.
3. NOTE: In the case of loss, damage or delay of part of registered

Sec. 13 (b), Public Service Act. The term "public service"
baggage or cargo, or of any object contained therein, the weight to be
includes every person that now or hereafter may own,
taken into consideration in determining the amount to which the
operate, manage, or control in the Philippines, for hire or
carrier's liability is limited shall be only the total weight of the
compensation… any common carrier… either for freight or
package or packages concerned. Nevertheless, when the loss, damage
passenger… or dock, ice plant… gas, electric light, heat and
or delay of a part of the registered baggage or cargo, or of an object
power water supply and power, petroleum, sewerage
contained therein, affects the value of other packages covered by the
system, wire or wireless communications system… and
same baggage check or the same air waybill, the total weight of such
other similar public services…
package or packages shall also be taken into consideration in
determining the limit of liability.
Article XII, Section 11, 1987 Philippine Constitution.
As regards objects of which the passenger takes charge himself – No franchise, certificate, or any other form of authorization
Five thousand (5,000) francs per passenger. (Art. 22) for the operation of a public utility shall be granted except
to citizens of the Philippines or to corporations or
NOTE: Carrier is not entitled to the foregoing limit if the damage is caused by associations organized under the laws of the Philippines, at
willful misconduct or default on its part (Art. 25)
43 This has generally been taken to include:
1. Knowledge that an action will probably result in injury or damage
2. Reckless disregard of the consequences of an action, or
41 PAL v. Judge Savillo and Simplicio-Griño, G.R. No. 149547, July 4, 2008. 3. Deliberately failing to discharge a duty related to safety.
42 Article 1.1, Warsaw Convention. 44 Article 23, Warsaw Convention.
2703 22
least sixty per centum of whose capital is owned by o It is property, representing the right and authority to operate
such citizens; nor shall such franchise, certificate, or facilities for public service, and therefore cannot be taken or
authorization be exclusive in character or for a longer interfered with without due process of law.
period than fifty years. Neither shall any such franchise or
Requisites for the Grant of a CPC48
right be granted except under the condition that it shall be
subject to amendment, alteration, or repeal by the Congress 1. Applicant must be a citizen of the Philippines. If the applicant is a
when the common good so requires. The State shall Corporation, 60% of its capital must be owned by Filipinos
encourage equity participation in public utilities by the 2. Applicant must prove public necessity
general public. The participation of foreign investors in the 3. Applicant must prove the operation of proposed public service will
promote public interest in a proper and suitable manner; and
governing body of any public utility enterprise shall be
4. Applicant must have sufficient financial capability to undertake
limited to their proportionate share in its capital, and all proposed services and meeting responsibilities incidental to its
the executive and managing officers of such corporation or operation.
association must be citizens of the Philippines.
Requisites for Transfer
Rates
1. No approval of sale and transfer of a CPC shall be accepted where the
 The Public Service Commission has the power to fix and determine validity of CPC being conveyed is less than 6 months on the date of
the following which shall be imposed observed and followed its filing with the LTFRB.
thereafter by any public service:45 2. No application for approval of sale and transfer of a CPC shall be
1. Individual or joint rates accepted unless the units authorized therein are registered with the
2. Tolls LTO for the current year.
3. Charges 3. Where the authorized units under the CPC conveyed have all not
4. Classifications been registered with the LTO for the current year, the application for
5. Schedules the approval of sale and transfer will be accepted and processed only
6. Commutation for the actual number of registered units corresponding to the CPC
7. Mileage conveyed.
8. Kilometrage 4. No application for approval of sale and transfer of a CPC shall be
9. Other special rates. (Sec 16) accepted, unless all fees/dues have been fully paid to the LTO and
Franchise v. Certificate of Public Convenience LTFRB, and taxes to the BIR.49
 A CPC is a formal written authority issued for the operation of Revocation of Certificate of Public Convenience
public services for which no franchise, either municipal or
legislative, is required by law, such as a common carrier. The Public Service Law gives the Public Service Commission the power to
 On the other hand, a franchise is privilege or authority to operate revoke certificates of public convenience on two occasions:
appropriate private property for public use vested by Congress
through legislation.46 1. Whenever the facts and circumstances on the strength of which said
 Under the Public Service Law, a certificate of public convenience is certificate was issued have been misrepresented or materially
transferrable by the holder thereof, being considered a changed; and,
property right.47
45 Sec. 16, Public Service Act, C.A. No. 89.

46 Metropolitan Cebu Water District (MCWD) v. Margarita Adala, G.R. No. 168914, July 4, 2007. 48 Kilusang Mayo Uno v. Garcia G.R. No. 108584, Dec. 22, 1994.
47 Limjoco v. Intestate Estate of Fragrante, G.R. No. L-770 April 27, 1948. 49 DOTC Order 2010-34
2703 23
2. Whenever the holder thereof has violated or willfully and

contumaciously refused to comply with any order rule or regulation
of the Commission or Law.
2703 24

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Transportation Law | Atty.

 The relation of passenger and carrier commences when one puts

 Accordingly, a common carrier is liable for actual or compensatory

culpa. contrary to public policy:

Philippine Rabbit Bus Lines v. IAC xxx

association of persons are regarded as carriers and are classified as private

Duty to Deliver Tan Chiong Sian v. Inchausti

Belgian Overseas v. Philippine First Insurance Co. Calalas v. CA

LIABILITIES OF COMMON CARRIERS Valenzuela Hardwood and Industrial Supply V. CA

NCC, Art. 1145. The following actions must be commenced

Government of the Phil. v. Maritime Captains/Masters

Supercargoes Bareboat Charter

33 Article 637, Code of Commerce. 34 i.e. ―For the time being‖

General or Gross c. entry of the resolution in the logbook

 A collision is an impact or sudden contact of a moving body

Stipulations Waiving Liability

3. NOTE: In the case of loss, damage or delay of part of registered

45 Sec. 16, Public Service Act, C.A. No. 89.

2. Whenever the holder thereof has violated or willfully and

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