Atty. Jose Amor M.

Amorado 18 March 2020

FEU Institute of Law Mid-term Exam
Transportation-JD4302 (On-line)

Instructions:

1. Disregard previous instructions in my email regarding on-line exam.

2. Download the Mid-term Exam questions from our common Google

Drive, i.e. FEU-Transportation (JD-4302) SY. 19-20, the file Mid-term
Examination Questions. It comes in both Word format and PDF
format. If you have any means to print it, please do, so that even if
you lose internet or wifi connection, you can still proceed to answer
the questionnaire. Should you have problems downloading it, inform
me by Zoom or text, viber, or whatsapp at (0917)847-8163.

3. I will be available in our Zoom Meeting (tonight at 8:00 PM) to

address your questions, if any, regarding the exams.

4. You may disconnect from our Zoom Meeting after I have taken your
attendance and after you have successfully downloaded the Mid-term
Examination Questions.

5. Your answers should be written in long-hand on yellow pads. Write

legibly. Do not write on the dorsal portion. Leave at least two (2)
spaces in between answers. Identify your answers by the number or
number (letter) of the questions being answered.

6. Each page of the yellow pad should contain your name and the
corresponding page.

7. This is an “open-notes open-books free-consultation” examination.

You should submit your answer sheets at the FEU-Institute of Law
Administration Office, more particularly at Room 607, Associate
Dean’s Office, within three (3) calendar days when classes resume.

8. We will validate your answers when we meet again during our first
regular class session.

QUESTIONS

Questions I to X are the Mid-term Examination questions. Question no. XI

is a bonus question for the Mid-term Exam. Your answer to Question No.
XI will also serve as one recitation grade. GOOD LUCK!
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I. Discuss exhaustively the principle embodied in Articles 1735 and

1756 of the Civil Code, to wit: Presumption of Liability of Common
Carriers. What exactly is the presumption? Why is there such
presumption? How can the presumption be overcome? (10 pts.)

In Art. 1735 the presumption is that the common carrier have been at fault
or to have acted negligently if the goods are lost, destroy or deteriorated in
all cases other than those instances mentioned in Article 1734.
In Art. 1756 the presumption is that the common carrier are presumed to
have been at fault or to have acted negligently in case of death or injuries
to passengers.

This presumption, however, may be overthrown by proof of extraordinary

diligence on the part of private respondent. Thus, in an action based on a
breach of contract of carriage, the aggrieved party does not have to prove
that the common carrier was at fault or was negligent. All that he has to
prove is the existence of the contract and the fact of its non-performance by
the carrier.1

- In both articles the passengers/ shippers need not to prove the fault or
negligence of the common carrier, all they have to prove is that there was a
contract of carriage and there is death or injury and goods were lost,
destroyed or has deteriorated.

-There is presumption because common carrier is imbued with public

interest. Therefore, there is a need to protect the public and ensure that the
people involved in the business of transporting goods or passengers will
exercise the highest degree of diligence required of them. Another reason
is that in cases of death or injury of passengers and loss, destruction or
deterioration of goods the common carrier are deemed to be liable.

-To overcome presumption of liability for loss, destruction or deterioration of

goods under Article 1735, the common carrier must prove that they
observed extraordinary diligence as required in Article 1733 of the Civil
Code.

1
China Air Lines, Ltd. v. Court of Appeals, G.R. Nos. 45985 & 46036, May 18, 1990, 185 SCRA 449,
457. Citing Air France v. Gillego
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II. Enumerate and discuss the obligations of the common carrier in the
carriage of goods. (10 pts.)

1. To accept goods without discrimination

In the case of F.C. Fisher V. Yangco Steamship Company, the court held
that at the time the case was decided the statute in place prohibits the
discrimination in accepting goods provides that it does not "require of a carrier, as a
condition to his continuing in said business, that he must carry anything and everything," and thereby
"render useless the facilities he may have for the carriage of certain lines of freight." It merely forbids
failures or refusals to receive persons or property for carriage which have the effect of giving an
"unreasonable or unnecessary preference or advantage" to any person, locality or particular kind of
traffic, or of subjecting any person, locality or particular kind of traffic to any undue or unreasonable
prejudice or discrimination.

2. To seasonably deliver the goods to the destination

Article 1740 and Article 1747provide for the common carrier’s liability in
incurring delay without just cause. It requires common carrier to deliver the
goods on time.
Article 1747. If the common carrier, without just cause, delays the transportation of the goods or
changes the stipulated or usual route, the contract limiting the common carrier's liability cannot be

Article 1740. If the common carrier negligently incurs in delay in transporting the goods, a natural
disaster shall not free such carrier from responsibility.

In Maersk Line vs. CA 222 SCRA 108 the court held that While the common carriers are
not obligated by law to carry and to deliver merchandise, and persons are not vested with the right to
prompt delivery, unless such common carriers previously assume the obligation to deliver at a given
date or time (Mendoza v. Philippine Air Lines, Inc., 90 Phil. 836 [1952]), delivery of shipment or
cargo should at least be made within a reasonable time.

The oft-repeated rule regarding a carrier's liability for delay is 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 convey goods, the law implies a contract that they shall be delivered at destination
within a reasonable time, in the absence, of any agreement as to the time of delivery. But where a
carrier has made an express contract to transport and deliver properly within a specified time, it is
bound to fulfill its contract and is liable for any delay, no matter from what cause it may have arisen.
(Saludo, Jr. v. Court of Appeals (207 SCRA 498 [1992])

3. To deliver the goods to the proper place or destination

4. To deliver the goods to the proper person.

Article 1736. The extraordinary responsibility of the common carrier lasts from the time the goods
are unconditionally placed in the possession of, and received by the carrier for transportation until
the same are delivered, actually or constructively, by the carrier to the consignee, or to the person
who has a right to receive them, without prejudice to the provisions of article 1738.

Article 1736 of the Civil Code requires the common carriers to exercise extraordinary diligence in
transporting and delivering the goods to the person who has the right to receive them.
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5. To exercise extraordinary diligence in the performance of its duties.

Article 1736. The extraordinary responsibility of the common carrier lasts from the time the goods
are unconditionally placed in the possession of, and received by the carrier for transportation until
the same are delivered, actually or constructively, by the carrier to the consignee, or to the person
who has a right to receive them, without prejudice to the provisions of article 1738.

Article 1744. A stipulation between the common carrier and the shipper or owner limiting the liability
of the former for the loss, destruction, or deterioration of the goods to a degree less than
extraordinary diligence shall be valid, provided it be:

(1) In writing, signed by the shipper or owner;

(2) Supported by a valuable consideration other than the service rendered by the common
carrier; and

(3) Reasonable, just and not contrary to public policy.

III. Enumerate and discuss the obligations of the common carrier in the
carriage of passengers. (10 pts.)

1. To accept passengers without discrimination

Sec 16 Ra 9295, makes it illegal for domestic ship operators to refuse to

accept or carry passengers or cargo without just cause.

2. To seasonably bring the passenger to the destination

3. To bring the passenger to the proper place or destination
4. To exercise extraordinary diligence in the performance of its duties

IV. Enumerate and discuss the obligations of the shipper/consignee and

the passenger in a contract of carriage. (10 pts.)
1. Duty to exercise due diligence

The Shipper/Consignee and the passenger are required to pay the

consideration in the form of freight or for in exchange for the service
provided by the common carrier.

2. Duty to disclose
In the case of Saludo, it held that the carrier is entitled to fair
representation of the nature and value of the goods to be carried. Hence it
is the duty of the shipper/ consignee to let the carriers know of the nature of
the goods or shipment.
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3. Duties of passenger to pay the proper fare

Passenger has to pay for the consideration in form of fare for the service
provided by the common carrier for transporting them to the place od
destination.

4. Duty of the passenger to present himself on the proper place.

According to jurisprudence the common carrier has no obligation on their
part to let on intending passengers at other points than those appointed for
stoppage.

5. Duty of the passenger to present himself on the proper time.

The passenger cannot hold the common carrier at fault if he/ she failed to
present himself on the proper time agreed upon.

6. Duty of the passenger to bring a luggage which is not in excess of

weight and size prescribed by the contract or regulation
The passenger has to duty to comply with regards to the prescribed rules in
the weight and size of the luggage.

7. Duty of the passenger to secure appropriate travel documents.

The carriers has no obligation to secure the passengers’ appropriate travel
document.

V. At the height of the onslaught of COVID-19 in Metro Manila, all the

buses of JAMA Transport, a common carrier, were leased by the
Inter-Agency Task Force (IATF) for thirty (30) days to serve as
shuttles for the frontline medical and health workers to and from their
respective hospitals/clinics. The IATF controlled the buses’ routes
and even their schedules.

A. During the period of the lease, were the JAMA buses common
carriers or private carriers? (5 points)

Art. 1732. Common carriers are persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by land, water, or air for
compensation, offering their services to the public.

The above article makes no distinction between one whose principal business activity is the carrying
of persons or goods or both, and one who does such carrying only as an ancillary activity (in local
idiom, as "a sideline"2

On the other hand, a private carrier is a carrier whose undertaking to transport

is an isolated transaction, not a part of the business or occupation, and the carrier
does not hold itself out to carry goods for the general public or to a limited
clientele, although involving the carriage of goods for a fee.
2
Sps Fabre v. CA
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In the case of Sps. Fabre in relying to an earlier case held that

[A] person who hires a public automobile and gives the driver directions as to the place to which he
wishes to be conveyed, but exercises no other control over the conduct of the driver, is not
responsible for acts of negligence of the latter or prevented from recovering for injuries suffered from
a collision between the automobile and a train, caused by the negligence or the automobile driver.  9

The court held that the Fabre case actually involves a contract of carriage and that Petitioners, the
Fabres, did not have to be engaged in the business of public transportation for the provisions of the
Civil Code on common carriers to apply to them.

Art. 1732. Common carriers are persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by land, water, or air for
compensation, offering their services to the public. The article makes no distinction between one
whose principal business activity is the carrying of persons or goods or both, and one who does
such carrying only as an ancillary activity (in local idiom, as "a sideline"). Article 1732 also carefully
avoids making any distinction between a person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled
basis. Neither does Article 1732 distinguish between a carrier offering its services to the "general
public," i.e., the general community or population, and one who offers services or solicits business
only from a narrow segment of the general population.

In the present case, the vehicles used are public vehicles which were leased by IATF are owned by
JAMA. The control of IATF over the said vehicles were limited only to the buses routes and schedule
hence, IATF exercises no other control over the conduct of the driver and not responsible for their
acts. It therefore follows that JAMA still has control over the vehicles through their drivers and should
be responsible for their acts.

B. If drivers of the Philippine Army were to drive those buses and

one of the buses, while making a sharp turn, turned turtle because
of a blown-out tire, causing injuries to its passengers, is JMA
Transport liable as a common carrier? Why or why not? (5 points)

No. JMA Transport is not liable as a common carrier. The common

carrier had no control over the vehicles. JMA now should be
considered as private carrier.

In this case, since it was the Philippine Army which has control over the
operation of the bus through the drivers. Just like in the case of a ship or
vessel the lease of a bus may be compared to that of a charter by demise
or bareboat charter3 where whole vessel is let to the charterer with a transfer to
him of its entire command and possession and consequent control over its
navigation, including the master and the crew, who are the charterer’s servants .
The common carrier now becomes a private carrier. Planters Products vs. CA
Since JMA no longer had a control over the navigation as well as to that of the
drivers, they are now considered as private carrier. Therefore, they can no longer
be held liable on the ground of presumptive negligence.

3
Planters Products vs. CA
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VI. Martin alighted from a bus operated and driven by Donato and owned
by and registered in the name of Greg. The bus does not have a
valid franchise, much less a certificate of public convenience (CPC).
As Martin was walking away from the bus, Donato stepped on the
gas and the bus slowly moved forward. However, the rear tire of the
bus ran over a stone as big as a closed fist causing it to catapult
directly at Martin, hitting the back of his head, and causing his
instantaneous death.

Martin’s heirs sued Donato and Greg for breach of contract of

carriage. Donato interposed the defense that he is not a common
carrier and that what happened was due to a fortuitous event. On the
other hand, Greg, to avoid liability, alleged that the contract of
carriage was already terminated when Martin started to walk away
from the bus.

A. Are Donato and Greg liable? Why or why not. (7 pts.)

Yes, they are both liable.

Greg for breach of contract of carriage. Franchise is not a requirement and

the lack of license will not exempt him from his liability when they are
operating as common carrier. In this case the bus is operating as a
common carrier because it is engaged in the business of carrying or
transporting passengers by land for compensation, offering services to the
public.

Also under the registered owner rule, the person who is registered owner
of a vehicle is liable for any damage caused by the negligent operation of
the vehicle although the same was already sold or conveyed to another
person at the time of the accident. This rule is a matter of public interest.
The registered owner is liable to the injured party subject to his right of
recourse against the transferee or the buyer.

Donato may be held liable for civil damages. *elaborate*

The defense that contract of carriage was already terminated when Martin
started to walk away from the bus does not hold water. In La Mallorca v.
Court of Appeals, it has been recognized as a rule that the relation of
carrier and passenger does not cease at the moment the passenger alights
from the carrier's vehicle at a place selected by the carrier at the point of
destination, but continues until the passenger has had a reasonable time or
a reasonable opportunity to leave the carrier's premises. And, what is a
reasonable time or a reasonable delay within this rule is to be determined
from all the circumstances. In this case, Martin was just walking away from
the bus when the rear tire of the bus ran over a stone causing it to catapult
directly at Martin, hitting the back of his head. It may be inferred from the
facts that Martin is still within the vicinity of the bus hence the vehicle ‘s
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duty had not yet ceased. The common carrier failed to observe the
diligence required by not affording the passenger some time to settle or
move to a reasonable and safe distance from the bus.

B. Will your answers be the same if the bus had a franchise/CPC?

(3 pts.)

Yes, my answer would still be the same. Because a franchise is not one of
the requirements for a vehicle to be considered as a common carrier. The
test to determine a common carrier is "whether the given undertaking is a part of the business
engaged in by the carrier which he has held out to the general public as his occupation rather than
the quantity or extent of the business transacted." . . . The holding of the Court in De Guzman vs.
Court of Appeals is instructive. Hence basis of the action is the breach of contract of
carriage.
Therefore, the common carrier may still be held liable regardless of
whether they possess a franchise or not.

VII. Kario went to Germany to buy the state-of-the art X-ray machine from
Swastika Medical Supplies, Inc. for PhP10.0 Million. By way of down
payment, he caused the transfer of PhP 5.0 Million to Swastika’s
bank account via wire. He signed a promissory note that he would
cause the wiring of the balance within 48 hours from the time the
vessel that will carry the machine to the Philippines, departs the port
of Hamburg. The machine was loaded in the hold of the vessel, with
Kario as shipper and his company in the Philippines as consignee. It
was insured against all risks with Cguro, Phils. Inc. During the
voyage, rain water, brought about by a squall, seeped inside the hold
of the vessel, causing major damage to the X-ray Machine, so much
so that it was rendered as a total loss. Thereafter, the captain of the
vessel received an email message from the Swastika Medical
Supplies, Inc. informing the Captain that it was exercising its right of
stoppage in-transitu because Kario did not wire the balance of the
purchase price. Upon reaching the Port of Manila, the damaged X-
ray machine was unloaded and the captain released it to the
company of Kario after being presented with a copy of the bill of
lading. The Cguro Phils., Inc. paid Kario PhP10.0 Million after the
latter claimed on the policy insurance. Cguro Phils. Inc., as
subrogee, sued the vessel owner for reimbursement.

A. Was the common carrier correct in releasing the X-ray machine to

Kario’s company? Why or Why not? (2.5 pts.)

-No because Swastika timely exercised its right of stoppage in-

transitu. Swastika had made known to the carrier that it is
exercising its right of stoppage in-transitu through an email while
the goods are still in transit and based on a valid ground that the
buyer/consignee did not pay the Swastika.
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B. Was Swastika Medical Supplies, Inc. correct when it exercised its

right of stoppage in transitu? Why or Why not? (2.5 pts.)

-Yes. In accordance with Article 1530 of the new Civil Code, the right of
stoppage in transitu is available when the unpaid seller has parted with the
possession of the goods or when the goods are still in transit. In this case
Swastika is an unpaid seller because Kario did not wire the balance of the
purchase price as agreed upon by them. Hence, Swastika as an unpaid
seller can exercise the right of stoppage in transitu.

C. Can the common carrier avoid liability by interposing the defense

that a squall is a natural calamity/fortuitous event? (2.5 pts.)

Yes. a caso fortuito presents the following essential characteristics: (1) The cause of the unforeseen and
unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of
the human will. (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. (3) The occurrence must be such as to render it impossible for the
debtor to fulfill his obligation in a normal manner. And (4) the obligor (debtor) must be free from any
participation in the aggravation of the injury resulting to the creditor." (5 Enciclopedia Juridica Española,
309.) (LASAM CASE) However, in order that a common carrier may be absolved from liability in case of  force
majeure, it is not enough that the accident was caused by force majeure. The common carrier must still prove
that it was not negligent in causing the injuries resulting from such accident (BACHELOR EXPRESS,
INCORPORATED,v. COURT OF APPEALS)

D. Is Kario liable to Swastika Medical Supplies, Inc.? Why or why

not? If he is liable, for how much? (2.5 pts.)

Yes, Kario is liable to Swastika Medical because it has

VIII. Evelio is engaged in the buying and selling of second-hand vehicles.

He owns a Toyota Innova himself, which he uses for personal
purposes. He possesses a non-professional driver’s license. During
his spare time, he accommodates friends, relatives and close
acquaintances who request for transportation services, and he gets
paid for his services in whatever amount his friends, relatives and
acquaintances tender. Sometimes, he is just reimbursed for gas and
toll. However, he does not advertise that his van is for lease or for
hire. One stormy night (Typhoon Signal No. 3), his van, while
bringing a cousin to Parañaque, figured in an accident in the Skyway,
causing the death of his cousin.

The surviving spouse of his cousin filed suit against Evelio for
damages based on breach of contract of carriage. Evelio countered
that he is not a common carrier. He further interposed the defense
that the typhoon (a fortuitous event) was the proximate and only
cause of the death of his cousin.

A. Is Evelio a common carrier? Why or why not? (5 pts.)

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*Private carrier

B. Is Evelio liable? What is the basis of his liability, culpa contractual

or culpa aquiliana? Explain. (2.5 pts.)

C. Under the factual circumstances, is Typhoon signal No. 3 a

fortuitous event, which should exempt Evelio from liability? (2.5
pts.)

Yes, a Typhoon is a fortuitous event however in order that a common carrier may be
absolved from liability in case of force majeure, it is not enough that the accident was caused by force majeure.
The common carrier must still prove that it was not negligent in causing the injuries resulting from such
accident. In this case

IX. Bogart shipped five hundred bales of cotton from China bound for
Manila aboard M/V Vagal, owned and operated by Reliable Shipping
Corp. (RSC). Bogart was both the shipper and consignee and he
joined the vessel’s journey to Manila. Because of the unpredictable
weather at that time and the fragile nature of Bogart’s shipment, he
signed an agreement with RSC stipulating that in view of said
circumstances, Bogart was waiving the exercise of extraordinary
diligence by RSC and that ordinary diligence would suffice, and that
in case of injury or death in the course of the journey, RSC’s liability
for indemnity is limited to a maximum of PhP100,000.00.

In the middle of the journey, M/V Vagal was hit by strong winds and
big waves which caused her to list from side to side. Water seeped
inside the hold of the vessel where the bales of cotton were placed
securely on pallets and wrapped with plastic. Nonetheless, sea water
found its way inside the plastic wrappings causing substantial
damage to the cotton. During the incident, Bogart was sleeping
inside his cabin and he was thrown off his bed with his head hitting a
metal corner, which impact caused his death.

Bogart’s spouse sued RSC for damages premised on breach of

contract of carriage. RSC interposed the defense of limited liability
and fortuitous event and offered a settlement of PhP100,000.00 as
death indemnity and none for the damage to the cotton.

You are the judge. Decide with reasons. (10 pts.)

As to the death

Article 1757 provides that the responsibility to observe extraordinary or

utmost diligence provided for in Article 1733 and 1755 cannot be dispensed
with or lessened through stipulation of posting of notices. Hence, the
stipulation regarding the sufficiency of ordinary diligence of RSC as a
common carrier in transporting passenger Bogart is contrary to law and
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therefore not valid. RSC is liable for the death of Bogart for its breach of
contract of carriage.

As for the damage to the cotton

In case of carriage of goods, there must be a stipulation of lowering the degree of

diligence to less than extraordinary diligence, in order for it to be validly invoked
as a defense. This is in accordance with Article 1744 which provides that a
stipulation between the common carrier and the shipper or owner limiting the
liability of the former for the loss, destruction, or deterioration of the goods to a
degree less than the extraordinary diligence shall be valid, provided that it be; 1. In
writing, signed by the shipper or owner; 2. Supported by a valuable consideration
other than the service rendered by the common carrier; and 3. Reasonable, just and
not contrary to public policy

On the defense that the death was due to a fortuitous event, jurisprudence provides
that in order that a common carrier may be absolved from liability in case of force majeure, it is not enough
that the accident was caused by force majeure. The common carrier must still prove that it was not negligent
in causing the injuries resulting from such accident. In this case I

X. XYZ Corporation is a corporation which is 80% owned by an

American conglomerate and 20% owned by a Japanese company. It
is registered with the Securities and Exchange Commission as a
foreign corporation authorized to do business in the Philippines. It
leases buses to ABC Transport Inc. a domestic corporation with
LTFRB franchise. One of XYZ Corporation’s buses being used by
ABC Transport, Inc. figured in an accident, because the two front tires
blew out, causing the bus to turn turtle and resulting in the death of
the driver and all its forty passengers. The heirs sued XYZ
Corporation and ABC Transport, Inc. for damages based on breach
of contract of carriage. XYZ Corp. alleged that it is not a common
carrier. It further alleged that the tires that blew out were new tires
which were manufactured by Sturdy Tires, Inc. ABC Transport, Inc.
interposed the defense that the bus involved in the accident does not
belong to it. The heirs amended the complaint to implead Sturdy
Tires, Inc.

Decide on the respective liabilities of the three corporations, if any(10

pts.)

XYZ
ABC- it is ABC whi has the franchise

Sturdy Tiles -In Necesito v. Court of Appeals it held that While the carrier is not an
insurer of the safety of the passengers, it should nevertheless be held to answer for the laws its equipment if
such flaws were at all discoverable. The rationale of the carrier’s liability is the fact that the passenger has no
privity with the manufacturer of the defective equipment; hence, he has no remedy against him, while the
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carrier usually has. Therefore Sturdy Tiles merely being a manufacturer of the said defective material has no
liability to the passengers on the absence of privity between them.

Common Carrier-

XI. Reconcile/Harmonize the following rules:

1. Common carriers are not insurers of the passengers’ safety or the

safety of the goods that they are transporting.

2. On the other hand, common carriers are presumptively liable in

case of loss, destruction, or deterioration of the goods, and death
or injury to passengers that they are transporting.

3. Furthermore, common carriers have the onus of proving that it

exercised extraordinary diligence.

*Common carriers are not made absolute insurers against all risks of travel and of transport of goods, and are
not held liable for acts or events which cannot be foreseen or are inevitable, provided that they shall have
complied with the rigorous standard of extraordinary diligence.(De Guzman v. Court of Appeals)

* The presumption of negligence, being a presumption of law, laid the burden of evidence on the carrier’s
shoulders to establish that they had not been negligent. 26 It was the law no less that required them to prove
their observance of extraordinary diligence in seeing to the safe and secure carriage of the passengers to their
destination (Pereñ as case)

* The law requires petitioner as common carrier to exercise extraordinary diligence incarrying and transporting their
passanger safely "as far as human care and foresight can proved, using the utmost diligence of very cautious persons, with due
regard for all circumstances." 10 In requiring the highest possible degree of diligence from common carriers and creating a
presumption of negligence against them, the law compels them to curb the recklessness of their drivers. (Kapalaran Case)

It is clear that the carrier is not an insurer of the passengers’ safety. His liability rests upon negligence, his
failure to exercise the "utmost" degree of diligence that the law requires, and by Art. 1756, in case of a
passenger’s death or injury the carrier bears the burden of satisfying the court that he has duly discharged
the duty of prudence required. (Necesito v. Natividad)