Transportation Law 2013-2014 405 Tld-Hyc

TRANSPORTATION LAW 2013-2014 *405* TLD-HYC
CAVEAT: Ang orals na part, idk if sakto or dili ang mga answer, amo lang TRANSPORTATION LAW
gipakita para basin mubalik iya mga questions so you have an idea unsa ang
mga questions... ktnxbye CHAPTER ONE – GENERAL CONSIDERATIONS
 LONG AWAITED POINTERS JUD AMONG I.UNA, print at your own ORALS:
risk napud ta ani ha? I WARNED YOU!!!
 FIRST TIMERS: SCAN first before PRINTING.... SCAN, SCAN, AND  WHAT IS A CONTRACT OF TRANSPORTATION?
EDIT OR WHATEVER. Yay, this is a very kalas-ink transcript... ohh
ug maka.delete rapud mo sa orals if you like.... There is a contract of transportation when a person obligates
himself to transport persons or property from one place to another
Pointers in Transportation Law:
for a consideration (AH)
1. Contract of Carriage:
 WHO IS THAT PERSON WHO OBLIGES TRANSPORTING?
 Consignee as party
 Who is a passenger?
Asoque: Passenger
2. Common Carrier (CC):
 WHO IS THAT PERSON WHO OBLIGED HIMSELF TO
 Characteristics of CC TRANSPORT ANOTHER?
 Materiality of ownership of vessel vis-à-vis liability
 Travel agent, pipeline operator
Asoque: Common Carrier
 Registered owner rule and kabit system
 Obligations of CC (i.e., natural disaster and force
majeure as defenses, delay in transportation,  WHO ARE PARTIES TO A CONTRACT OF
presumption of negligence and how to rebut it, TRANSPORTATION?
Art. 1759 and 1763, NCC, contributory negligence,
hand carried baggage)
Asoque: Passenger and Common Carrier
 Diligence required of CC and of passenger
 Governing laws
 WITH RESPECT TO?
3. Extraordinary Diligence
Asoque: Transportation of Persons
 Why CC is obligated to observe?
 Inspection of carrier
 Surrender of bill (Art. 353, CC)  WHAT ABOUT WITH RESPECT TO GOODS?
4. Bill of Lading (BL): Asoque: Shipper, Common Carrier and Consignee
 Character of BL  WHY IS CONSIGNEE PARTY TO A CONTRACT?

 Clean bill and foul bill
 Notice of claim (Art. 366, CC)
 COGSA (misdelivery, limitation of liability, notice of Asoque: Consignee is the one who receives the goods from the
claim) Ambot if naa ba tanan sa discussion niya shipper through the common carrier
ang g.butang niya diri, g.dungag nlng pud nako
ang sa libro kevs...  GIVE AN EXAMPLE OF A CONSIGNEE AS PARTY TO A
 Paramount clause IDK this animal...
 Validity of stipulations (i.e., Arts. 1744, 1745, 1749 CONTRACT
and 1750, NCC)
Asoque: (Everett Steamship vs. CA)  There was a contract of
5. Actions and Damages carriage between a common carrier (Everett) and a shipper
 Culpa contractual v. culpa aquiliana (Maruman Trading). The consignee (Hernandez Trading) wants to
 Solidary liability get supplies from Maruman. The evidence of the contract was a bill
 Death indemnity, loss of earning capacity of lading signed by Maruman and Everett? Everett wanted
 Concepts and application of MENTAL
Hernandez to pay for the loss of the train... Hernandez pretended
that he was not part of the contract between Maruman and Everett
wherein Everett’s liability would only be 100,000 because Hernandez
did not sign the contract. There was a demand upon Hernandez.
Everett would only pay up to 100,000 and not the entire shipment.
Hernandez then filed a case against Everett.
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Supreme Court said that even though Hernandez did not sign or was The distinction between a “common or public carrier” and a “private
not part of the contract, he is deemed to be part of it because he or special carrier” lies in the character of the business, such that if
demanded payment since he accepted the goods. the undertaking is a single transaction, not a part of a general
business or occupation, although involving the carriage of the goods
SC: The consignee may be deemed to be bound by the terms and for a fee, the person or corporation offering such service is a private
conditions of the bill of lading where it was established that he carrier. (Planters Products from AH)
accepted the same and is trying to enforce the agreement (Everett
Shipping).  EXAMPLE OF A SINGLE TRANSACTION THAT WOULD FALL
IN A PRIVATE CARRIER
 WHICH IS IT, THE DELIVERY OF THE GOODS OR THE
DEMAND FOR PAYMENT? Alo: Mr. Gocuan asks me to take him to the airport for a one-time
transaction. One-time transaction is an isolated transaction.
Asoque: Demand for delivery of the goods Happens only ONCE.
 WHAT ABOUT DEMAND FOR PAYMENT? WHAT IS THE  IF YOUR SERVICE TO MR. GOCUAN HAPPENS NOT ONCE
SIGNIFICANCE OF THE DEMAND AND THE ACCEPTANCE? BUT TWICE, ARE YOU A PRIVATE CARRIER?
Asoque: If he demands, he is abiding by the contract. If he accepts, Alo: Yes. Even though it happened more than once, as long as it’s not
he also submits to the contract a part of my general course of business.
Licup: There are two possibilities where the consignee may be bound  BUT IS IT YOUR “OCCASIONAL” COURSE OF BUSINESS?
by the contract. First: if there is an agency relation between the
shipper and the consignee. Second is when the consignee demands Alo: Perhaps.
the fulfilment of the stipulations in the bill of lading. If you do not
want to pay, we can raise a defense by saying that you did not ask  ARE YOU AWARE THAT IN DE GUZMAN, THERE IS NO
for the importation of the goods, denying any agency relation with DISTINCTION? ....
the shipper and second is that, you refuse to accept the bill of lading.  EXAMPLE, YOU ARE ALL LIVING IN THE SAME SUBDIVISION,
IN GOING TO YOUR WORK, YOU PASS THE WORKPLACE OF
 ILLUSTRATE “DEMAND FOR FULFILLMENT OF THE YOUR NEIGHBORS. THEY RIDE WITH YOU AND PAY LESS
CONTRACT” THAN THE AMOUNT REQUIRED IN OTHER MODES OF
TRANSPORTATION. YOU HAVE TWO CLIENTS (ASOQUE
Licup: For instance, there is a stipulation in the bill of lading saying AND GOCUAN) AND YOU’RE DOING THIS IN A DAILY BASIS.
that the carrier only has limited liability. If the consignee will sue the ARE YOU A PRIVATE OR COMMON CARRIER?
carrier for the actual value of the goods, the consignee is actually
demanding for fulfilment of the contract. Alo: You are already a Common Carrier.
 DOES THE PHRASE “DEMAND FOR FULFILLMENT OF THE  IS IT NOT THAT YOUR TRANSACTION WITH ASOQUE IS A
CONTRACT” ACTUALLY REQUIRE THE FILING OF A CASE IN SINGLE TRANSACTION AND ANOTHER SINGLE
COURT? TRANSACTION WITH GOCUAN?
Licup: I don’t think so. Probably only a demand to the carrier to Alo: Special carrier should be for a particular instance only.
deliver the goods. If the consignee already knows that the goods are (na.confused nako unsaon pag incorporate sa ila oral battle, sorry)
missing, demand for damages.
 WHO IS A COMMON CARRIER?
 WHO IS A CARRIER?
Article 1732 (NCC): Common carriers are persons, corporations, firms
(Spouses Pereña vs. Spouses Zarate) or associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for
 TWO CLASSIFICATIONS OF A CARRIER compensation, offering their services to the public.
Alo: Common and Private  WHAT IF IT IS BY MEANS OF A “PIPELINE”? (First Philippine

Industrial Case)
 DISTINCTION BETWEEN COMMON AND PRIVATE
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Burdeos: A pipeline operator is considered a common carrier. Means Burdeos: No. In order for the train agency to be liable, it must be in
of transportation does not matter provided that the goods or relation to the job of the carrier that is to transport the passenger.
persons are transported from one place to another.
 DO YOU KNOW WHAT IS THE PURPOSE OF THAT PERSON
 ARE YOU SAYING THAT THE “TRANSPORTING FROM ONE IN GOING TO THE COMFORT ROOM?
PLACE TO ANOTHER” IS A REQUISITE FOR THE COMMON
OR PRIVATE CARRIER? Burdeos: No.
Burdeos: Not necessarily. There are instances where, for example, in  IS THE PURPOSE OR INTENTION RELEVANT?
a bus or jeepney, even though the purpose is for transportation, as
Burdeos: I believe so. The passenger must have the intention to use
long as the person is inside the vehicle, the obligation already arises.
the facilities for the carrier to be held liable.
For a jeepney, the moment the passenger catches the driver’s
 IF THE PURPOSE IS TO HIDE SOMETHING ILLEGAL?
attention like the “para action”.
Burdeos: The carrier is no longer liable.

 IS IT ALWAYS NECESSARY THAT THE PASSENGER MUST
MAKE SUCH SIGNAL TO THE DRIVER?
Burdeos: Not necessary. There are also instances where the jeepneys
-o- DISCUSSION -o-
have their own stopovers.
STOWAWAY - a person who secretly boarded a mode of conveyance
 GIVE AN EXAMPLE WHERE THE PASSENGER DID NOT MAKE
(carrier is not aware that there is this person who is a stowaway)
A SIGNAL AND YET THERE WAS A PERFECTED CONTRACT
OF CARRIAGE BETWEEN THE CARRIER AND THE The key there is AWARENESS. If the carrier is aware and allowed that
PASSENGER. person to ride even without any fare being paid (probably out of
pity), then the carrier is still liable/responsible as a common carrier.
Burdeos: The moment the passenger already has his ticket for the
train and the moment he is already in the premises where the train CONTRACT OF TRANSPORTATION
passes waiting for the train to come. For example there was an
accident due to the negligence of the driver, the train agency or the Definition is one-sided since it talks/focuses on the person who
driver will be held liable for the negligence. undertakes or obligates to transport persons or goods from one
place to another for a consideration or remuneration.
 WHAT IS THAT “PREMISES” YOU SPEAK OF?
Who are these persons who obligates? CARRIER – Either Common or
Burdeos: The premises covered by the contract. The stopovers of the Private
train.
TYPES of CONTRACT:
 FOR A PERFECTED CONTRACT OF CARRIAGE, WHAT ARE
THE REQUIREMENTS INSOFAR AS TRAIN IS CONCERNED? *CONTRACT TO CARRY – perfected by mere consent
A person who wants to board a train in a railway station must  British Airways vs. CA: an action for damages may be
purchase a ticket and must present himself at the proper place and sustained for breach of contract to carry
in a proper manner for transportation. Such person must have a
bona fide intention to use the facilities of the carrier, possess *CONTRACT OF CARRIAGE – actual use
sufficient fare with which to pay for his passage, and present himself
 Ganzon vs. CA: The vessel that would carry the goods to
to the carrier for transportation in the place and manner provided.
the place of destination was docked meters away from the
(AH)
port. So that the goods can be placed into the vessel, they
 EXAMPLE, IF THE PERSON, RIGHT AFTER PURCHASING THE have to use a lighter (smaller boats). So they have to put
TOKEN, WENT TO THE COMFORT ROOM AND WHILE the goods to that lighter or barge before they are placed
INSIDE, HE WAS SHOT TO DEATH, IS THE CARRIER LIABLE into that vessel that would bring the goods to the place of
FOR THE DEATH OF THAT PERSON? destination. It so happened, the employees/crew in that
lighter/barge were the same employees of the owner of
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the vessel. So when the goods were placed on that the driver or conductor, then there can be no perfected
barge/lighter, the lighter sank and the goods perished. contract.
 ISSUE: WON there was perfected contract of carriage
 SC: YES. The employees the manning the lighter/barge SIR: I believe the reason why the SC has held on the case of DANGWA
were employees of the owner of that vessel. (SAME) that it was a perfected contract of carriage was because Cudiamat
 BUT: if you have to revise the facts, assuming that there is was already standing on the platform and the conductor was
nothing to connect those that manned the lighter of the already aware that he was there standing on the platform.
barge and the owner of that vessel  SIR: IMO, there is
 If the situation was that he was still trying to catch up and
NO perfected contract of carriage. Therefore, the vessel
the driver or conductor does not know that he was trying
can always say that we have no responsibility.
to catch up, I would think there can be no perfected
 Why was there the “actual use” component (not mere
contract of carriage. But take note, it is a question of
consent) of the contract? BECAUSE the goods were already
testimonial evidence.
unconditionally placed/loaded on the barge/lighter taking
cue of the actual use of the carrier that makes it a real
AIRPLANE (KOREAN AIRLINES)
contract.
Several circumstances considered by the Court:
WHY are we so concerned about common carrier and private?
 The name of the passenger was already placed on the
BECAUSE of the THREE (3) FACTORS.
manifest, checked in, clearance from immigration and
customs, boarded the shuttle, proceeded to the ramp and
1. LAW APPLICABLE
the baggage was already loaded.
 Common Carrier – CIVIL CODE
 Private Carrier – CONTRACT
WHAT IF: a person is still walking along the chute leading to the
aircraft, can that person be considered as already a passenger?
2. STANDARD OF DILIGENCE REQUIRED
What if there was a bomb in the chute, it exploded and caused
 Common – Extraordinary
injuries to those persons walking along the chute, is the carrier
 Private – Ordinary
responsible?
 DEFENSE OF CARRIER: While there was a contract to carry,
3. BURDEN OF PROOF
there was no perfected contract of carriage here. It was
 Common – no burden of proof; burden of proof
still outside of our premises, outside of the aircraft.
is on the carrier to dispute presumption of
 TAKE NOTE: the chute is not owned by the carrier, it is part
negligence
of the facility of the airport terminal. To be safe, sue both
 Private – burden of proof lies on the one suing
the carrier and the operator of the terminal for negligence.
the case (based on quasi-delict)
HOW is this perfected Contract of Carriage MANIFESTED? WHAT IF: you are about to cross that portion connecting the chute
and the aircraft, ni.uyog ang aircraft kay ni.hangin, nya natangtang
 You have the 3 cases: DANGWA, KOREAN AIRLINES (with ang chute, then you fell on the ground, is there a perfected contract
respect to airplane), LRTA vs. NAVIDAD (trains) of carriage?
 You can use KOREAN AIRLINES but the defense is still non-
DANGWA vs. CA (still the applicable case when it comes to perfection of the contract aside from fortuitous event,
perfection) natural calamity or force majeure.
*CAUTION: while we know the prevailing doctrine, it is possible that

TRAIN (LRTA VS. NAVIDAD)
the circumstances maybe different.
IMPORTANT: The person should be at the PROPER PLACE.
- E.G. If we take the cue on the case of DANGWA, does it mean that
every time a bus or jeepney stops, it is considered to be inviting
IF you go to the C.R., depends on what you are doing:
passengers? NOT NECESSARILY, because there may be a reason for
 Peeing  part of the proper place because otherwise they
stopping.
would not put the C.R. there if it is not to be used.
 Assuming at the time a person tries to board or boarded a  Committing a crime  SIR: you are not a passenger
jeepney or bus was not with the knowledge or consent of because that facility is not for an act contrary to law.
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CONSIGNEE BEING A PARTY WHAT IF: pana.ugon ka? That is a VIOLATION.

 It is the carrier’s responsibility to make sure that a person
Two cases: Everett vs. CA and MOF vs. Shin Yang who it invited for transportation should be checked first if
he has the money to pay.
Consignee is originally not a party to the contract, normally  Buses that use the “puncher2x method”, that is the
evidenced by a bill of lading, but it becomes a party when he carrier’s risk.
demands fulfilment of that stipulation.
Q&A:
EVERETT CASE: there was a demand and the filing of a case. *In stowaway, that is not a question in consideration. It is a question
 It is not necessary that there should be “filing of a case” in of the carrier’s awareness that you were there. So how can it be
order to show “demanding fulfilment” although that is found to comply with its obligation when the carrier is not aware
what happened in the case of Everett. WHY? The case of that you were there because of the secrecy in boarding the
Everett cited several cases where there was only a demand conveyance.
made.
 SIR: personally, I don’t think that the filing of a case is a *Kanang ampao vendors mukalit lang ug sakay? That should not
requisite of the phrase “demanding fulfilment in the have been allowed. Assuming that happens, the carrier is aware that
stipulation in a bill of lading”. they are there. What the driver should do is stop and make them go
down because there was no contract.
SHIN YANG CASE: Shin Yang contended that it did not cause the - if they are allowed to board and sell in the bus, then they are
importation and that the bill of lading was prepared without its considered as passengers.
consent. (Because the expenses, ang pabayron kay si Shin Yang)
 Would it matter if dili si Shin Yang ang pabayron? *What if sa dagat? That is one of the risks that the carrier would
PROBABLY, he could have accepted it and of course upon have to shoulder because normally, the ticket would have to be
accepting it, he would have been considered as a party to inspected.
the contract. - CARRIER’s DEFENSE: advise the person that there was no contract
of carriage or that I am not responsible for whatever might happen
Shin Yang consistently denied in all of its pleadings that it authorized to him (then ilabay sa dagat :p)
Halla Trading to ship the goods or that it got hold of the Bill of Lading
covering the shipment or that it demanded the release of the cargo. -o- ADDITIONAL MOOLAH -o-
 It is not necessary that you should be sending a demand Kay wa na apil sa discussion ni sir pero apil sa iya pointers (ALL
letter. If you demand for the delivery of the cargo, then FROM THE BOOK –AH)
you are making yourself a party to the contract.
 There can be several manifestations of demanding for the WHO IS A PASSENGER?
performance of that stipulation.
A passenger is defined as one who travels in a public conveyance by
CARRIER virtue of contract, express or implied, with the carrier as to the
payment of fare or that which is accepted as an equivalent thereof.
DEFINITION OF A CARRIER: SPS. PEREÑA VS. SPS. ZARATE
 A carrier is a person or corporation who undertakes to -o- Well, carry on ta sa discussion -o-
transport or convey goods or persons from one place to
another, gratuitously or for hire. CONCERNS ON THE CONTRACT OF CARRIAGE:
 Similar to the definition of a Contract of Transpo but
instead of referring it to contract, this time, the Court said *IS IT THE SAME AS TOWAGE? NO (AH p. 21)
a Carrier is a PERSON or CORPORATION.
*STEVEDORING? It is also different.
 “GRATUITOUSLY OR FOR HIRE”  even if the passenger
- Stevedoring is actually the transportation of goods in the holds of
forgot to pay, that is not an excuse for the carrier not to
the vessel or from the ship’s tackle (the literal edge of the vessel) to
perform its obligation under the law. (It is different if “nag-
the cargo hold.
limot2x ka” because you do not have the bona fide
- Arrastre  within the ship’s tackle going to the warehouse
intention to ride since you did not bring something)
 SIR: the word “gratuitously” depends on the circumstances
*WHAT ABOUT RENT-A-CAR?
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 Rent-a-car is a contract of lease. Concept of chartered Q&A: If you bring your friend to the airport for a fee, are you a
party may apply (affreightment, bareboat or demise) common carrier? Not necessarily, because if you are only obligated
 Affreightment  there is a driver placed by the owner of to that person and no one else, you are a private carrier because it is
the car rental exclusive.
 Bareboat or demise  no driver placed  SIR: IMO, one person is not considered “public”. Probably
 The moment that you are the one leasing, the charterer or two, I will concede.
the lessee and you used it (e.g. namasahero ka), then you  Frequency is not an issue. It can be occasional, scheduled,
are a common carrier. etc.
 If for several classmates for a fee, even if only once, you
*WHAT ABOUT FUN RIDE OR AMUSEMENT RIDE? are a common carrier. Even if it is free, under 1758, you
- bump cars, Ferris wheel, etc. are still a common carrier.
- In Article 1732, the word used there is “transportation”.
DOES the case of Home Insurance on Private Carriers still apply?
ISSUE: is there transportation if you start at one point and you end  YES. But in the case of Planters, growing concern for
at the same point (e.g. roller coaster)? protection, safety of the public, then we cannot anymore
 If your client is the one injured, argue that the owner- apply Home Insurance.
operator is a common carrier  However, Home Insurance case was decided by the Court
 If your client is the operator, argue that it is a private en banc, Planters was by division.
carrier  FGU VS. G.P. SARMIENTO: SC held that G.P. Sarmiento was
 Since our law is Anglo-American, in the US, there was a private carrier because of the exclusivity of the contract
already a decision involving Disney Land. The Court held (only one client).
that Disney Land is a Common Carrier.  No case yet where two or three clients were catered. SIR:
 DISNEY LAND CASE (L.A.): It was a rollercoaster ride, one of IMO, I would say you are common carrier.
the honeymooners had an internal bleeding in the head  VALENCIA: From Davao to Cagayan de Oro, he let him ride
resulting from the ride. at the back (outside) of the vehicle instead of inside.
Injured. SC: Private Carrier, only happened once and only
WHAT IS THE DISTINGUISHING FACTORS BETWEEN COMMON AND for that person.
PRIVATE?
FUNERAL PARLOR? Goods mana or both  Common
1. PUBLIC EMPLOYMENT  Sps. Cruz: can be considered as a package already
 Common – Services are offered to the public
such that the carrier cannot refuse AMBULANCE OPERATOR? Common carrier, though no one saw them
 Private – If the carrier can refuse fit to be regulated maybe because it may hamper the services of the
hospital. But under 1732, it offers to the public.
2. REGULATION – Different colored plate numbers  Ambulances are considered as emergency vehicles insofar
 Common – Yellow plates as traffic regulations are concerned but not under 1732.
 Private – Green plates
 Airport taxis  combination of tourism, yellow What is the effect of a WAIVER?
with a tinge of green  It is VOID but assuming that there will be people who will
 School buses are common carriers  advised to be injured and assuming that they all signed a waiver, will
have their vehicles registered with LTFRB and all of them file a case? Probably not.
have their plates issued  And assuming that they will all file a case and my defense
 Vehicles from Chonghua to Fuente  subject to is that they all signed a waiver, are you 100% sure that the
regulation judge will rule in their favour? Not necessarily, so the
 Vehicles ferrying free rides by mall owners, waiver can help.
Carpools  Common
SIR: IMO, it doesn’t matter if you publish, what matters is that you Whether the owner of a TOWING company is a common carrier?
act (word used by the Court in the De Guzman Case) undertaking to  Issue is whether they are offering their services to the
transport persons or goods, it qualifies as a common carrier. public.
 One side: we are only forced to pull out this vehicle
because of the violation
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 Other side: You are offering your services to the public CHAPTER TWO – OBLIGATIONS OF THE PARTIES
because if there are those who will contract with you for
the towing of their vehicle, then that is offering your Discussion (continuation for Chapter 1)
services to the public.
If there is no consideration then the carrier is not common
pursuant to art. 1732?
SKYDIVE? Prior to skydive, you are being transported there  there
is a contract of transpo
SPS. PEREÑA VS. SPS. ZARATE case –
 If the contract is only to transport you up there before you
will dive, then that is the extent of the contract. The “gratuitously or for consideration” – still considered as
moment you dive, no more liability. But the concern there common carrier. I don’t know how the Supreme Court will
is the safety of the persons who will participate but the explain why a carrier can be considered a common carrier even
counterargument is that it is not the general public which if it is gratuitous carrier. Although you can also say that since
is involved since, pila raman ang mu.skydive? that the definition of carrier in this case was so broad that it
includes common as well as private.
NOTE: LACKING ITEMS AND CASES
- Governing Laws In Carpooling, there is a consideration. But it is a minimal
- Registered Owner Rule and Kabit System amount. Like in a subdivision for example, if you want your kid
CASES to be fetched by a person who is into such what we call
- No details on HOME INSURANCE and PLANTERS (mag.tigi ni
carpooling, like in going to school and they charge an amount,
sila)
- De Guzman vs. CA probably a month or per trip places then that person is to be
- Bascos vs. CA considered common carrier.
- Fabre vs. CA
- First Phil Industrial vs. CA
The trend now is basically, for the court to consider a carrier to
- Loadstar Shipping vs. CA
- Calvo vs. UCPB be common because there are only a few cases where the court
- Asia Lighterage vs. Shipping held that the carrier is private.
- AF Brokerage vs. CA
- Schmitz Transport vs. Transport Venture 1. American Home case (Home Insurance Co. vs. American
- Phil Charter vs. MV National Honor
- Lea Mer Industries Steamship Agencies Inc.): Can you still invoke American
- Loadstar Shipping vs. Pioneer Asia Home case? The problem with American Home is the
- Cebu Salvage vs. Phil Home Assurance failure of American Home to raise the issue of whether
- Unsworth vs. CA
- National Steel vs. CA
the carrier is private or common. Because it is very clear
- Valenzuela vs. CA in the petition before the Supreme Court there was only
- Crisostomo vs. CA one legal issue in the case of American Home, the validity
- Lim vs. CA
of the stipulation in the bill of lading. That means there
- FEB Leasing vs. Sps. Baylon
- Filcar vs. Espinas was never an issue in the case of American Home whether
the carrier is common or private. If that have been an
issue raised in the case of American Home then the
Supreme Court in the of Planter’s Products would not have
pronounced the inapplicability or the misapplication of the
case of American Homes. So that is why in the case of
Planter’s Products the Supreme Court said that the
invocation of whether the common carrier is common or
private is inapplicable, meaning the invocation of
American Home is misplaced because the issue in the
American Home is the validity of the stipulation. Number
two, the court also justified in the case of Planter’s
Products that because of the need to protect the safety of
passengers, the Supreme court did not apply the American
Homes Insurance case
2. National Steel vs. CA. What were the issues raised in the
National Steel? The issues raised in the National Steel were
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about seaworthiness, demorage and etc. there was never remain will only be the role of the customs broker
an issue whether the carrier is private or common. So in originally then, the carrier is not common
the same manner you cannot raise cannot invoke National
Steel in support of your issue before a court to determine Is it safe to say that if the carrier is common it is private?
the character of the carrier. Not necessarily, because a person may not be a carrier in
the first place. Just like a travel agent, you never heard the
3. Valenzuela Hardwood and Industrial Supply Inc. vs. CA. Supreme Court saying that hey Crisostomo, you are not
There was an admission of the party filling the case common therefore, you are private. The Supreme Court
against the carrier that the carrier is private. did not say that because there was never any
transportation. It is only when there is transportation that
4. FGU Insurance Corp. vs. G.P. Sermiento Trucking Corp. you make a distinction whether it is common or whether it
The key there is the exclusivity of the contract. So you can is private.
invoke FGU if the circumstances are the same as in the
problem. CHARTER PARTY
My advice is for you to cite the case of Planters Products
FACTS: G.P. Sarmiento Trucking Corporation (GPS) case.
undertook to deliver on 18 June 1994 thirty (30) units of VOLUNTEER – Obligations of the Parties
Condura S.D. refrigerators aboard one of its Isuzu truck,
driven by Lambert Eroles, from the plant site of What are the obligations of the common carriers?
Concepcion Industries, Inc. While the truck was traversing
N: The common carrier is bound to accept any particular goods
the north diversion road along the highway, it collided
or any passengers without discrimination for carriage. It is also
with an unidentified truck, causing it to fall into a deep
bound once it has accepted to fulfil its duties in the contract
canal, resulting in damage to the cargoes.
which is to deliver the person or good in a particular place.
FGU Insurance Corporation (FGU), an insurer of the
shipment, paid to Concepcion Industries, Inc., the value of
What do you mean by “bound to accept without discrimination”?
the covered cargoes in the sum of P204,450.00. FGU, in
turn, being the subrogee of the rights and interests of N: In what is discussed in the book: a common carrier is
Concepcion Industries, Inc., sought reimbursement of the supposed to offer its services to the public. There is a
amount it had paid to the latter from GPS. Since the comparison to public office where being for the public interest
trucking company failed to heed the claim, FGU filed a you are not allowed to discriminate based on the carrier’s
complaint for damages and breach of contract of carriage personal or _(26:36)purposes as to which kind of passengers to
against GPS and its driver Lambert Erolesn. In its answer, accept so for example jeepney drivers cannot deny you
respondents asserted that GPS was the exclusive hauler transportation because you are Korean or will charge you
only of Concepcion Industries, Inc., since 1988, and it was double fare because you’re a foreigner. So, because it is for the
not so engaged in business as a common carrier. public convenience to treat everyone equal.
So what do we have: we have several cases: Can pregnant women be accepted in transport in airlines?
1. De Guzman, about the absence of a distinction;
2. Cases involving operators of school buses; What about if you are bringing a plant or plants? Can you bring
3. Fabre, Jr. v. CA 259 SCRA 426. where the Supreme Court those plants to the vessel?
held that Fabre was a common carrier even with the
N:… the plants are subject to the regulatory powers of the
absence of CBC. But it was already clarified in the case of
Government. For example especially like plants, you have to
Perena, owners and operators of school buses are
secure clearance from a department of the government.
common carriers.. You cannot anymore invoke that you
Technically while all goods must be accepted there are some
have only a limited clientele, no CPC and etc. because all of
good which the government has declared that needs clearance
these are settled.
before it can be transported like firearms.
4. Beach resorts, you have that case of Sps. Cruz vs. Sun
Holidays Inc. The key there is the undertaking to What about explosives?
transport. Just like in the case of Customs Brokers. You
take away that undertaking to transport and what will
40
N: Explosives: it depends if the common carrier is required to an expected time of arrival so they are not technically bound if
(28:00) to transport explosive. So I think right now the rule is they are delayed in 10 to 15 minutes.
you have to have a permit as a common carrier (28:10)
So if they are not bound, where does that fall? It is under the first,
What is the second obligation that is mentioned? where there is stipulation or second, where there is absence of
stipulation?
N: The duty to transport.
N: Second category, reasonable time, because there is really no
To transport? Where? time or guaranteed by the airline on what time you will arrive
on your destination. There is only an indication of the specified
N: If it’s in the case of passengers, to transport to the place
time of departure and an estimated time of arrival. So, they
designated as destination and for goods to the consignee.
would specify that you have to be here before the boarding
time (32.38) estimated time of arrival.
What about the time to transport? What are the rules?
What would be your example of the first?

N: It must within the reasonable period of time or … if not
stipulated within reasonable period of time
N: First would be example like, the boat usually have their
schedule made and post it on their bulletin board(33:01) For
What do you mean with “if not stipulated”?
example the boat will arrive on May 9, 2014…
N: Like for example like the airplanes leave: 7:30, arrive: 8:30,
So you have a specific date on your arrival?
manila. So if it’s 8:30 you will then consider you should arrive
there at least 8:30 or at least before 9. If it is not stipulated
N: Yes you have a specific date of the arrival.
then generally you can consider how similar voyage will take.
If the boat doesn’t arrive on May 9, 2014?
In case of airplane for example, if the airplane does not fly on the
time stipulated then the carrier can be sued? N: You should sue for whatever damages caused you by the
delay.
N: In the case of airplanes, I think it would depend on cause. If
the cause is not due to the fault of the carrier like storm then What if the delay is cause by a Fortuitous event as you have said?
the carrier is exempt from liability. However if it is due to
mechanical defects or (30:06)then the carrier should provide  N: (33:30) is temporarily suspended to the effect that as soon as
like meals, overnight, allowance and … there are certain rights the mission become possible for the carrier to make the delivery
that are (30:25). Like for example like for passenger if you then to do in a reasonable period of time.
missed something because of the delayed arrival of the aircraft
you can sue. Assuming there was a storm and the vessel arrived May 10, 2014?
Is the storm an excuse? N: Yes sir.
So as to the time of transportation you said it depends of whether
it is stipulated and if it is not stipulated. And in the example when Going to the second, reasonable time. How did the Supreme Court
there is a stipulation you mentioned about the airplane. Did I did it interpret this reasonable time?
right?
N: So if there is no categorical time specified so it should
N: Yes sir. It is generally whether it is stipulated or it is not depend on: the type of transportation, the (34:40)
stipulated. If it is not stipulated then you apply reasonable
What about fortuitous event is it an excuse that the vessel did not
amount of time.
arrive at the reasonable time?
Let’s say an airplane there is a ticket right? Can you conceive of a
N: It will be excused that the vessel did not arrive because of
stipulation that says “so and so” as to the time of transportation,
the fortuitous event.
how is it worded in the ticket?
There is no distinction between the two? When it is stipulated or
N: Generally what is stipulated is departure time and estimated
when it is not stipulated. Meaning the fortuitous event can be an
time of arrival. So I think the airline knows this that it is not a
excuse.
contract per se where they stipulate the time of arrival, it’s just
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N: Technically there should be a difference because even if you And when does it end?
could say that in the first case it is a strict contract (35:45)
L: It ends. You have to pay into account the various factual
If you’re the owner would you commit yourself that the good circumstances but generally by the fact you alighted from the
would arrive on May 9, 2014? vessel or from the carrier it doesn’t mean that the duty ends
right there. I think there has to be a reasonable time from when
N: Of course not. I would say that it is subject to the weather you left the premises of the common carrier.
conditions.
What is reasonable time?
Ikaw, mu.recite ka?
L: It depends again upon the circumstances of the case.
Lenie: Ako? Are you calling me?
Can you give me an example of reasonable time?
What is it that you want to discuss? Chapter two.
L: The case I found in the book where there is a family bound to
L: I think I’ll be more comfortable reciting Extraordinary a certain place in Pampanga. There is the parents and the three
Diligence. children. When they alighted the bus, of course they are a
family travelling, there is bound to be a lot of baggage. The
Go, go.. What about extraordinary diligence?
father, when they alighted the bus, just (40:33) the family 5
meters away from the bus. And then the father went back to
L: Well it is stated here in the book that (36:55) by the nature of
the bus not knowing that his three year old child was following
the business is bound to exercise extraordinary diligence in the
him. And so when the father is getting the baggage in the
transportation of goods and in the transportation of
platform, the bus moved forward not knowing that that the 3-
passengers.
year old child was there, causing the death of that 3-year old
Is it one of the defences of a common carrier? Whether child. The Supreme Court say in that case that even if the family
extraordinary diligence is a defense of a common carrier? has already alighted the bus, the carrier is still liable because
the family is still within the premises. By the fact that they
L: No sir because by the contract of carriage. Because from the alighted does not mean that you are exculpated from the
cases, the Supreme Court held that it has to be distinguished, obligation to exercise due diligence in the transportation of
the contract of courage has to be distinguished from culpa your passengers does not terminate from the fact that
acquiliana or a mere tort. In a contract of carriage you cannot passengers have alighted.
interpose the defense of exercising extraordinary diligence
because you are prescribed by law, specifically by the civil code
to precisely by the nature of the business to exercise such But isn’t it not that they were not anymore in the premises? Except
extraordinary diligence. for the father, the mother and the children were already at a
distance from the bus?
When should a common carrier exercise?
L: In that case the Supreme Court give relevance to the fact that
L: You ask sir when the duty to exercise extraordinary diligence there was still luggage left in the bus. And so by that fact,
commences. If it is for the transportation of good the duty to technically, the family is still passengers of the bus. There is still
exercise extraordinary diligence commences from the time that an intention to go back.
the good are put in the unconditional control and possession of
the common carrier. If it is with the transport of passengers, it What about goods, when does it ends?
is different. The Supreme Court has emphasize that just by the
L: Goods, upon delivery to the consignee sir.
mere purchase of ticket does not necessarily bound the carrier
to exercise the…
Consignee alone?
So aside from the purchase what is the _(39:15)?
L: Consignee and to the person who has the right to receive it.
L: You have to present yourself to the place of/to the premises
Who is the person who has the right to receive it?
of the carrier as a passenger with a bona fide intention to use
the facilities provided. L: The notified party like in a case, a very complicated case.
40
What is that case? What did the Supreme Court say? predictable it is outside of man to control then it is considered
as fortuitous event sir.
What made the Supreme Court say that there was delivery?
What about if you consulted PAGASA and there was no storm from
L: Again they give relevance to the fact that there was this that time, it was only a monsoon which we normally experience
telefax that was given. Although it was conceded that in the nowadays.
contract it was only stated that GPC was only be notified partly
and not be as expressly stated as the consignee of the goods. C: I would say sir that the carrier is free from negligence from
The carrier gave due course to the telefax that was given by the his part, that its ship was cleared for shipping, it was only a
shipper. monsoon and it did all the precautionary measures. The carrier
exercise such diligence to prevent such loss of cargo
Aside from that.. L: And there was the perishable nature of the
goods
Aside from that. In the previous transactions, to whom was the DISCUSSION: 11/29/13
goods delivered?
In the 2004 book, the same authors, you can find on page 68 to 69
L: It was also delivered to GPC. GPC, the notified party. the required clearances which are not incorporated in the 2011. I
am not sure what are the reasons by the authors here but actually
What about delivery of fuel? When does it end? by the time it was published in the 2004 several years after under
3.6 the 2004 book it says about motor vehicles and parts because
L: It depends. Generally if we apply the general rule to the
before you need to get clearance from the traffic management
consignee, to the gas station… (44:45)
group before you can be allowed to transport your vehicle from one
port to another but that clearance was removed by the PNP because
If part of the fuel was already in the tank but the rest spilled on the
of the allegations of corruption. But the other clearances are still
sea cause it backflow, was there delivery?
required.
L: No sir. There was not delivery
3 Cbligations of a Common Carrier:
Why? L: Because what is generally agreed upon by the parties is that
1. Obligation to accept
all of the fuel must be delivered to the consignee.
2. Obligation to deliver
Discussed about Art. 1734 3. Obligation to exercise Extraordinary Diligence
C: Article 1734 talks about common carriers are responsible for While probably after you have studied the first part of chapter two
loss and destruction of goods on shipment unless the same will you may have that knowledge already that a jeepney driver, a taxi
be due to either of the exclusive enumerations found in 1734. driver, a bus driver is obligated to accept you for transportation
hinay-hinay lang when you assert that right because I am not sure if
If a vessel was sank because of the big waves of the sea and on you can use your knowledge in defending against illegal assault or
that vessel were cargos, ca the owner invoke Art. 1734? whatever crime that may be committed against you. Although if
there is a crime committed then you still have a right under
C: It depends. There are requisites in order to availed of the transportation law.
exclusion of the right.
The duty or the obligation to accept
What would be your ground? What ground do you invoke? If you
are the lawyer of the common carrier. is the very reason why if there is a driver who will ask where
you are getting, where you are going to or where is your
C: I will invoke sir that it was due to fortuitous event. destination that is a violation. And there is even a violation for
refusal to convey. The moment that you will be ask where you
Why? Why was there a fortuitous event?
are going to and you will answer and the driver will not accept
C: I would argue that there was storm sir and it was you for carriage or transportation that is a violation because as
unpredictable. And even if it was predictable, under the stated, the carrier has that first obligation to accept.
requisite of fortuitous event, it was under number 2. Even if it is
But you will have to note, there can be discrimination but it
has to be reasonable discrimination. That is why the
40
requirement of clearances that is in relation or a manifestation  There is stipulation

of a reasonable discrimination  .There is no stipulation, then must be within reasonable
time (should be based on the circumstances of the case)
. I am not sure if there is a standard with respect to pregnant
women because as far as I know it depends on the carrier The case of Maerksline vs CA citing Saludo, the court said, “The oft-
involved and it depends on whether there is a medical repeated rule regarding a carrier's liability for delay is that in the
certificate issued by a medical practitioner. absence of a special contract, a carrier is not an insurer against
delay in transportation of goods…” “But where a carrier has made
IMPROPER TANK OR DEFECTIVE CONTAINERS an express contract to transport within a specified time, it is bound
to fulfil its contract and is liable for any delay; no matter from what
Improper tank or defective containers delivered to the carrier cause it may have arisen.”
and the question would be whether the carrier is mandated to
Be careful in looking at the time, place in the contract of carriage.
accept? Because even if you don’t see the word estimated and you would
see the words around and about, those are indications that the time
The carrier may refuse to accept. is not specific. Now another thing is this, in practice involving
transpo, you have the ticket as your best evidence, stipulations
Now assuming, that the carrier will accept or will choose to there.
accept? The carrier may limit liability.
What about if there are publications, announcements at the
Limitation of liability in Obligation to Accept premises of the common carrier which are not found in the ticket,
are you bound whatever announcements published in the premises?
Article 1747. If the common carrier, without just cause,
delays the transportation of the goods or changes the No, unless there is a phrase there in the ticket that whatever
stipulated or usual route, the contract limiting the
may be published by the common carrier around or within or in
common carrier's liability cannot be availed of in case of
the loss, destruction, or deterioration of the goods. the premises then the passenger or the shipper is bound by the
terms of that.
Article 1749. A stipulation that the common carrier's
liability is limited to the value of the goods appearing in Why should we be concerned of the time of delivery?
the bill of lading, unless the shipper or owner declares a
Because if the common carrier cannot deliver based on the
greater value, is binding.
time specified, there can be delay but do not think that all
Take Note: Do not conclude that well there is a limitation of liability delays will lead to liability. There can be delays which will not
then the carrier is free of all liability or is free to do anything that it lead to liability like if the cause of delay is beyond the control
may want in relation to that improperly packed goods or goods of the common carrier. If there is delay:
packed in defective containersbecause you have Article 1742 of the
1. Article 1740 (NCC). If common carrier negligently delays
New Civil code that when it comes to defective containers or when
in transporting the goods, a natural disaster shall not free
there is defect in the character of the goods the carrier is still
it from responsibility.
expected to exercise due diligence
Art. 1742. Even if the loss, destruction, or deterioration of the 2. Article 1747 (NCC). If common carrier delays, without
goods should be caused by the character of the goods, or the just cause, in transporting the goods or changes the
faulty nature of the packing or the containers, the common stipulated or usual route, the contract limiting its liability
carrier must exercise due diligence to forestall or lessen the cannot be availed of in case of the loss, destruction, or
loss. deterioration of the goods.
Diligence to what? To forestall or lessen the loss. So you have to

What are the effects of delay involving contract of transportation?
reconcile all these concepts: from acceptance, from the character of
the goods, limitation of liability and then with respect to the duty to 1. Natural disaster cannot free a common carrier under
exercise due diligence to lessen the loss. Article 1740 and;
2. Article 1747, that the carrier cannot avail of limitation of
The duty or the obligation to deliver
liability.
Now as to time, we have to distinguish if:

For Consignee: If there is delay can abandon. Meaning the
consignee may not accept the good that will be delivered.
40
What about the place of delivery? It depends upon the agreement they are temporarily unloaded or stored in transit, unless the
and of course normally it is indicated in the bill of lading. shipper or owner has made use of the right of stoppage in transit.
To whom delivery must be made?  Another Article 1738,
1. To the Consignee ARTICLE 1738. The extraordinary liability of the common carrier
2. To the person who is authorized to accept the goods. continues to be operative even during the time the goods are stored
in a warehouse of the carrier at the place if destination, until the
Note: that the case of Macam vs CA is very exceptional. It does not consignee has been advised of the arrival of the goods and has had
happen at all times, there are peculiar circumstances. Like the reasonable opportunity thereafter to remove them or otherwise
export invoices clearly show or named GPC as the buyer-importer dispose of them
and also in the demand letter GPC was named s buyer-importer. And
the court said that delivery to the buyer-importer has the effect of Note: the case of Servando vs. Phil. Steam Navigation Co.
delivery. .
While the goods were placed in the customs warehouse, it was
What should be done if the consignee refuses to receive? You have not placed in the carrier’s warehouse, but of course the
Article 369 of the Code of Commerce. You need to file a case before Supreme Court has to apply 1738. The issue there was delivery
the Municipal judge to provide the deposit of goods. And what is the to the consignee and therefore if there is delivery then the
problem now is we don’t have rules under maritime law common carrier has no more duty to exercise the required
promulgated by the Supreme Court. diligence.
Obligation to exercise Extraordinary Diligence What were the important facts in Servando? Servando has
already withdrawn part of the goods that were placed. So the
 Goods. court conclude, if the consignee has already withdrawn part of
 Compania Maritima vs. Insurance Co. of North the goods then it has already been advised of the arrival and
America. had reasonable opportunity, in fact, it has already even
When goods are unconditionally placed in possession exercise its right to remove those goods. So 1738 has been
and received by the carrier then the duty to exercise complied.
starts. Now please be cautious also of the case of
Compania Meritima. Why? Because based on the  When does this duty to exercise ends?
facts, the goods were not yet placed in the vessel Delsan Transport Lines Inc. vs. American Home Assurance
that would take the goods to the place of destination. Corp.
They were unloaded in the barge before they be a very peculiar case (I believe). Because it was diesel oil
loaded into the vessel. But before loading the good discharged from the vessel which backed flowed and
into the vessel, the barge sank. So note ang mga spilled into the ocean. So the contention of petitioner, the
gipanggamit sa cases na gitawag ug ligther. So it’s diesel was already completely delivered to CALEBS. SC
actually referring to a small craft. And then also uses said, “the discharging of oil products has not yet been
the word “patron”, captain of small craft. finished, Delsan still has the duty to guard and to preserve
the cargo”.
What constrained the SC to conclude that the acceptance of
the goods by the barge that there was already complete The good were in the customs warehouse although the
delivery and therefore the duty to exercise also started? There law says the storage of the goods in the warehouse of the
is the same owner of the lighter and the ship, and the receipt. common carrier or the place of destination, the carrier still
There was that receipt signed by the patron of the lighter. The has the responsibility. So it would depend on whether the
receipt signed says “receiving the cargo in behalf of (30:31)”. consignee has been properly advised and etc. It does not
matter who owns the warehouse? Yes, it will not matter.
 The exercise of the diligence you have Article 1737, the law Although the carrier also can contend it is already beyond
says the duty remains even if there is temporary unloading or our responsibility and 1738 says common carrier’s
storage in transit unless the owner or the shipper made use of warehouse not customs’ warehouse. So we’re already off
his right of stoppage in transit. that. So what you’re saying sir, if the carrier informed the
consignee that it’s with customs already sir, it removes
ARTICLE 1737. The common carrier’s duty to observe extraordinary their liability, does it? No, because there is “and
diligence over the goods remains in full force and effect even when reasonable opportunity to remove them”.
40
 Passengers ORALS:
 LRTA vs. Navidad
The start of duty is when a person 1. purchases a Give one defense of a common carrier.
ticket, and 2. present himself in the proper place and
C: Fortuitous event sir, natural calamity sir
in a proper manner.
 Dangwa Transportation vs. Del Prado
Are they the same? Why are they the same?
In the case of Dangwa Transportation. Kudiamat, he C: Unforeseeable, even foreseen, inevitable

was already standing on the platform, unya
pag.accelerate, pag.move sa vehicle nahulog siya. The Can you foresee an earthquake?
court said there was perfected contract of carriage
and the moment the bus stops, it is making a C:I cannot sir.
continuing offer.
So is an earthquake a fortuitous event? C: Yes sir.
In Del Prado vs. Manila Electric the court said, there Is it a natural calamity? C: It is.
was already a perfected contract of carriage. In the
case, Del Prado was trying to catch up a slowly So there is not difference?
moving vehicle. He was trying to catch up the hand
post, which he failed. And the court said, there was C: There is sir. Natural calamity, act of God vs Fortuitous event,
negligence on the part of that person but this may or may not be an act of God.
negligence does not absolve the carrier from liability.
The court said, negligence may be mitigated the What made you say that Natural calamity is an act of God?
damages.
C: Because it is beyond human control sir. In a case, Supreme
court has held hijacking as a fortuitous event.
The issue in Dangwa is the findings of facts that
supports the ruling, wala mani sa issue of negligence When is hijacking a fortuitous event? De guzman vs ca case
in Dangwa. In Del Prado, one of the issues is
negligence of that passenger. Take note of this, it’s a What do mean by the hijacking was so grave?
matter of evidence.
What made you say that there were hijackers?
This is in the case of Dangwa, “this is now the pronouncement
of the court of appeals which the Supreme Court has held was Definition in the case on who are hijackers.
correct… from the testimony of appeallee’s own witness in the
person of Italiano Safarita it is evident that the subject bus was C: There reason why the Supreme Court considered those
hijackers as fortuitous event is because it was beyond the
at full stop when the victim Pedro Kudyamat boarded it…
contrary to the assertion of the appeallees, the victim did control of the common carrier, it was unforeseeable.
indicate his intention to board the bus.” Is it material? Yes.
What made it beyond the control? C: Something unforeseeable.
“Indicate his intention to board the bus as can be seen from the
testimony of the said witness where he declared that Pedrito Why was it unforeseeable?
Kudyamat was no longer walking”. So there was an indication
of Kudyamat to board the bus. That is factual. What about in C: The carrier do not control to know that by that time there
Del Prado? There was also an indication. In Del Prado, “raised will be hijackers. As long as the carrier exercise the necessary
his hand as an indication to the motorman of his desire in diligence the Supreme Court held that the hijacker is considered
response to which the motorman eases up a little without as Fortuitous event as contemplated in 1734.
stopping”. My point is, in these two cases, there was meeting of
minds. So, it’s just my own opinion. It may be hard to say when What made the Supreme Court say that there were hijackers?
bus stops it makes a continuing offer. That is very risky. What if
Since you cite de guzman case and you said it is a fortuitous event,
there is no meeting of minds? But probably the Supreme Court
why was it a fortuitous event?
made that pronouncement on the basis of that factual ruling by
the court of appeals.
December 12, 2014

40
C: According to the Supreme Court that it was fortuitous event If fortuitous event as you say is a defense, what is your legal basis?
because it was beyond the control of the common carrier. The Is it Aricle 1734?
book
C: That is 1734 paragraph 1, mentions about the word
Why was it beyond the control? fortuitous event.
C: Because the act of the hijackers was so grave that the Are you sure that the words caso fortuito are mentioned there?
common carrier cannot anymore .. the duty of the common
carrier… C: It did not.
Did the Supreme Court use the term hijackers? If you said that fortuitous event falls under 1734 parragraph 1,
then why did you said earlier that fortuitous even tis different from
C: Term used: robbers natural disaster?
And what were the robbers are bring during the time of the What is the catch all word there in paragraph 1 under 1734?
incident?
C: Natural disaster or calamity
C: They were armed.
Is a fortuitous event a natural disaster? C: Yes sir
Is it material that they were armed at that time?
It is? Are all fortuitous event a natural disaster? C: Not all
C: Yes. It lessen the chances.
So why did you based it under 1734? When not all fortuitous
So you are saying that the defense of fortuitous events in so far as events is are natural disaster?
armed men is concern is dependent on the exercise of diligence of
a common carrier? C: In paragraph 1 natural qualifies calamity and disaster.
C: Not necessarily sir. Even if the carrier has made So why did you based it under 1734, s your legal basis in saying
precautionary measure still being the act of hijackers so grace it fortuitous events a defense?
is inevitable.
What is the primary governing law in transpo law?
How is that due diligence manifested?
C: The civil code sir.
C: In the case, they hired security personnel.
Fortuitous events, any other defense of a common carrier?
If they hire security personnel, why will they hire security
M: Acts of the public enemy in war, whether international or
personnel? Was there information that the truck of the company
civil.
will be robbed by armed men?
And what about the act of the public enemy?
C: There was none.
M: The act of the public enemy presupposes the existence of
None, so, what intend them to hire security personnel? Or is it just
state of war. Example: the Philippines is at war with another
part of their standard operating procedure that all trucks shall be
country and that fact will be considered as defense.
secured?
You know what happen to Tacloban because of the storm? And
Do you know what was one of the issues raised in the De guzman?
have you seen that vessel that was brought in the middle of the
C: There were two issues in the case of De guzman. The one was city of Tacloban? You heard it. Assuming that there were sacks of
whether the operator of the truck is a common carrier. rice in that vessel and the residence there of Tacloban because
Remember as we have discussed in chapter 1, the court said, there was nothing to eat, they have to take all those sacks of rice
1932 does not make any distinction as to the main business or from the vessel and consume it. If the owner of the vessel is sued
the business is side-line. And the other issue is whether or not by the owner or the consignee of the sacks of rice, can the owner
hijacking is considered force majure. invoke the act of public enemy?
40
M: No, the owner of the vessel cannot invoke the defense of act So, that is the point in time the common carrier has to observe?
of public enemy because it is stated therein that the act of What about if the goods would require a refrigerator for the good
robbers, thieves or rioters, though against social order, are not are required to be in a certain temperature in order not to get
in the legal sense classed as legal enemies but are merely damage?
considered as (26:55)contributors.
B: The common carrier should provide as a necessary
What makes them different with pirates? precaution to keep the goods in good shape.
M: Pirates are different because they are considered as a crime What necessary precautions? There is a certain point of
against humanity, against civilized (27:10). So piracy is temperature that is required on such goods so the common carrier
generally considered as an act of public enemy. should know that.
Any other defense? B: What about if the common carrier would present a witness
that the freezer got damage at the point when the good are not
M: We have the act or omission of the shipper or the owner of already in the hands of the common carrier but was delivered in
the goods. Example: A contracted with D to deliver kind of the hands of the common carrier, would that be sufficient
goods to the consignee C. when the goods arrive at the port, evidence that the common carrier observed diligence? Not
the consignee was informed of the arrival of the goods. For the sufficient. Point where the goods get damaged.
period of 2 months the consignee did not claimed the goods. If
the goods is lost or deteriorated then the carrier or the owner of What if the shipper/consignee will not accept because the goods
the vessel can invoke the defense 3rd defense under 1734. were already damaged? B: Reimbursement
Why would you blame the consignee? Do you know what is this “shore pass”? What is the responsibility
of a common carrier in an issue of shore pass?
M: For discarding the notice for unreasonable length of time,
the consignee did not get the goods. And by reason of such B: Not covered by the contract.
facts, the owner of the vessel can invoke such defense.
If it is not the responsibility of the common carrier then whose
Any other defense? responsibility is that? B: The passenger
B: One is the character of the goods or defects in the packing or What about this fire? Is the occurrence of a fire is a defense on the
in the containers part of the common carrier? B: In case the cause for the damage of
the goods is the fire itself.
What about the character of the goods?
Baggage:
B: If the goods are vulnerable and the carrier was not inform, in
case something happens, the carrier is not liable. Article 1734: complete defenses of a commom carrier:
Vulnerable to what? Are those only the defenses of a common carrier? B: No, the
defenses available are not limited on the enumerations under 1734.
B: Seawater for example the carrier must observe due diligence.
What are the other defenses?
How did the common carrier prove that it observe due diligence?
B: Fire- as long as it is the only or proximate cause of the event
B: For example: taking of precautionary measures. then it will be considered a defense.
What precautionary measures? Why? Does fire fall under 1734? B: No, there are other causes
B: For example: sacks of fertilizer were covered by tarpaulin. At What are those causes? B: Fortuitous event sir.
what point covered? To the point that it is impossible for the
seawater to sink in. I am asking about time? The time is the So if you have defenses unde 1734 and you have fortuitous events,
moment it is under the custody of the common carrier until it is are those all the defenses that the common carrier can invoke? No
delivered to the consignee.
Why not? What other defenses are available?
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J: The exercise of extraordinary diligence. DEFENSES
Article 1734, fortuitous, 17something and extraordinary diligence. Remember the sample problem I presented before;
Is that all?
One: Alleged all defense you can think of or as you will have, do not
What about carrier of passengers? be contended by only one defense. And note: Omnibus Motion rule
in remedial law. Third party-judge, has his or her own way of
J: Exercise of due diligence/ utmost diligence applies only. appreciating the evidences, you cannot impose your on will on him
or her.
Can you not invoke fortuitous event? J: Yes you can also invoke.
Two: Observe form the cases decided by the court, make an issue;
Can you not invoke 1734? J: No sir, you cannot, it is only applicable
to the carriage of the goods.  Contributory negligence: Isaac vs A.L. Ammen
What about the 17something that you said? Contributory negligence on the part of the passenger who display his
arm outside of the window of the conveyance so isn’t that a
J: (44:50)1745: based on the act of strangers like thieves and
manifestation that should mitigate. But if you have observed in the
robbers. The presence of grave or irresistible threat violence or
case, there was no issue regarding Contributory Negligence.
force would be considered as casio fortuito but not based on
article 1734. Take note in so far as defenses are concren: you should make an
issue on a particular allegation or fact which you want the court to
Example of a breach of transportation of passengers and there is a
resolve. Do not assume that the court will probably resolve this one
valid that can be invoke.
because this one because this has been raised by the other party.
Anything that you didn’t raise as an issue the court cannot be
J: There is death or injury yet there is a valid defense that can
compelled to resolve that.
be invoked. (Transportation of passengers)
Defenses:
LLD- loss, damage or deterioration – transportation of goods only
A. Defenses of common carrier is under Article 1734
There are incidents to today that taxi drivers are using prohibited
B. Exercise of Extraordinary Diligence
drugs, shabu.
C. Fortuitous Event
J: There will be an exercise of utmost diligence with regards to
ARTICLE 1734 (No other defense may be raised: exclusive or closed
its employees. Facts: Manila to Cebu ship defense: sufficient
list)
selection and supervision. Injury: typhoon, struck the said
1. Flood, storm, earthquake, lightning, or other natural disaster or
vessel. Passengers died because the boat sank. S.O: significant
calamity
others.
2. Act of the public enemy in war, whether international or civil
3. Act or omission of the shipper or owner of the goods
Example of Tui case: if you were the lawyer, what is your defense? 4. The character of the goods or defects in the packing or in the
containers
Doctrine of last clear chance not applicable in contract of carriage. 5. Order or act of competent public authority
Why? Exercise of extraordinary diligence
Can the common carrier invoke the negligence of the owner of the Article Paragraph 1 of Article 1734 :Natural Calamity or Disaster,
truck? Not. Why not? J: Contract of carriage – presumption of very specific. Natural disaster may be included under Fortuitous
negligence. Event but not all Fortuitous Events are Natural disasters.
That presumption, was that not overcome by the invocation that it Note: Although there is one defense that was not mentioned by the
was the negligence of the truck that was the proximate cause? No. authors and I am talking about the Limited Liability Rule under
Why? Unavoidable. Maritime Law. But I think I have showed this in the answer that was
filed in court. Assuming it was so stated there: assuming the
The carrier is required to exercise extraordinary diligence in so far common carrier was liable, the liability is extinguished pursuant to
as the negligence of the owner of the truck? the principle of the (8:19) nature in the Maritime Law. So that
DISCUSSION:
40
defense is also available to a common carrier but your basis there is number of passengers 5. Clearance from coastguard 6.
the Maritime Law, not the first part under the new civil code. Fortuitous event.
NATURAL DISASTER Centrl Shipping Co. Inc. vs. Insurance Co. of North American,
 Proximate and Only Cause This is about the shifting of the logs. What was the reason
Supreme Court said, “Even if fire were to be considered a why the logs were shifted? Because they were not tied
natural disaster within the purview of Article 1734, it is properly. Not here that petitioners main defense is that
required under Article 173910 of the same Code that the the proximate and only cause was the natural disaster, a
natural disaster must have been the proximate and only
tropical storm. According to PAG-ASA there was not storm.
cause of the loss, and that the carrier has exercised due
diligence to prevent or minimize the loss before, during or So how can the carrier now invoke storm when there was
after the occurrence of the disaster” (DSR-Senator Lines no storm in the first place? And who is that agency that
case) will establish that there was a storm? It was PAG-ASA.
Now if you will allege that there were big waves, there was
 Exercise of Due Diligence strong wind, that is not necessarily the case, because as
you will note here in the case, in maritime law, there is a
in time of natural disaster the common carrier is not expected
certain degree of storminess of the wind which can
to exercise extraordinary diligence but only due
constitute storm. So below that standard, that is not a
diligence( before, during or after the occurrence
storm. Of you will say strong waves, probably those are
not storm. Strong wave may be the effect of a storm but
Lea Mer Industries Inc. vs. Malayan Insurance Co. Inc.
not necessarily coming from the storm. In this case the
What was the defense there of the common carrier? Supreme Court says it may come from a Monsoon. Like
Natural Disaster. There was evidence that Lea Mer was what we are experiencing now, there is a monsoon but it is
informed of the incoming typhoon and the coastguard not a tropical dexpression. Now Supreme Court further
cleared the sail. Now, if it is a Natural disaster, you take up said, “if a monsoon is to be deemed a natural disaster then
the second requisite and that requisite is the requisite of the 3 requisites must be complied… The evidence
due diligence. And this case the Supreme Court said that indicated that strong southwest Monsoons were common
there was no evidence presented on whether there was occurrences during the month of July, officers and crew,
due diligence exercise by the common carrier. And it was should have reasonably anticipated heavy rains, strong
the witness, (factual evidence) a certain Joey Draper, rains and rough seas”. Given a problem where the cause of
testified he could no longer remember whether anything the sinking is strong waves, strong winds and etc. then do
had been done to minimize loss when the water started not immediately conclude that it is caused by typhoon or
entering the barge. So note, if the is no evidence, the monsoon. Of course you can qualify, you can qualify the
presumption cannot be overcome. Because presumption answer.
can be overcome by the exercise of extraordinary
Fire as a cause of loss, a defense?
diligence or it can be overcome also by proof that it was
the natural disaster that caused the loss. So if there is no
The answer is the case of DSR-Senator Lines and C.F.
evidence then one requisite will be lacking. If one requisite
Sharp and Co. Inc. vs. Federal Phoenix Assurance Co.
is lacking then it is not a natural disaster. Now what about
What was the defense of the carrier? The liability is
the fact that there was a certification of inspection issued
extinguished when the ship carrying the cargo was gotten
by the coastguard? The certification does not conclusively
by the fire. In effect, fire is the proximate cause.
prove that the barge was seaworthy. Now note that even
if the court said that the certificate of inspection does not Public enemy as a cause?
conclusively prove that the vessel was seaworthy; that
does not mean that you should not raise it as your Of course there is no debate now that: Somalian Pirates,
defense. All defenses must be raised. assuming that they would embark forcing on a vessel and
forcibly take all the goods etc., commanded the vessel
Defenses of Extraordinary Diligence which will constitute: then the loss can be attributed to the act of the Public
Enemy. And I believe the same is true with acts of
1. Seaworthiness of the vessel 2. Proper manning 3. Proper
terrorists. What should we remember when it comes to
storage of goods inside the vessel 4. Within the capacity of the
40
the Act of Public Enemy as a cause, proximate cause and me it would be easy if the court just said based on the
only cause. law that the very reason why the common carrier
should be held liable is because of the contract. It
Acts or omissions part of the shipper and the owner of the goods should be based on the contract so if it is based on
and Improper Packing the contract then the contract has been violated by
the parties to the contract. Although you might also
Cause: proximate and only cause and due diligence. But
say that can we not consider the act of the driver and
note, here the due diligence did not require that it must
the owner of the other vehicle as acts of third
be before, during and after just like in natural disaster. It is
parties? Now, ifyou are going to ask me, nothing shall
due diligence to lessen the loss, that is what is required.
prevent you from invoking that one. Remember the
other defenses? You have the absolute responsibility
If the acts or omission of the shipper or the owner of
of the common carrier under 1759 :
goods merely contributes, it was not the proximate cause,
the loss then you have to apply the law that says that it
Article 1759. Common carriers are liable for the death
shall only mitigate the damages to be awarded. Although
of or injuries to passengers through the negligence or
latter on we will have to emphasize that the Supreme
wilful acts of the former's employees, although such
Court has not pronounced yet a standard by which
employees may have acted beyond the scope of their
mitigation can be based. I would say depending on the
authority or in violation of the orders of the common
speculation (not sure daw si sir if he is using the right
carriers.
term) on the part of the Supreme Court.
and then you have 1763
William Tui vs. Pedro Arriesgado?
Article 1763. A common carrier is responsible for
Emphasize: Supreme Court has center on whether
injuries suffered by a passenger on account of the
there was an exercise of extraordinary diligence but I
wilful acts or negligence of other passengers or of
need to stress that the resolution of the court will
strangers, if the common carrier's employees through
depend on the issue. A resolution of the court can
the exercise of the diligence of a good father of a
depend on an issue raised. So like in this case, one of
family could have prevented or stopped the act or
the issues there is the exercise of extraordinary
omission.
diligence. Why did the court, did not venture on
fortuitous event or article 1734? Of course, article that qualifies acts of strangers and acts of co-
1734 may not be applicable in all cases because it passengers or other passengers.
centered on carriage of goods. But we don’t know in
the future that there might come a case where a Do not ever invoke, Doctrine of Last Clear Chance in a
ground or defense under 1734 can be applied as well contract of carriage case. The contract of last clear
with carriage of passengers. For example, act of chance presupposes the parties are both negligent.
public enemy, this is based under 1734 but I believe it The Doctrine of Last Clear Chance does not apply in
can also be applied if there is injury or death in the the contract of carriage.
carriage of passengers as a result of acts of pirates.
But of course you cannot also invoke acts or Fortuitous event (you know what? I think you should
omissions on the part of shipper when the issue is memorize the requisites)
about carriage of passengers.
Loadstar Shipping vs. Pioneer. Good weather
Doctrine of Last Clear chance: Why is it, this was not however, the captain ordered the vessel to be force a
applied? The concept: two parties are be negligent ground. The entershippement was good as gone due
but one party has the last chance to avoid the to exposure to seawater. When sued, the defense
accident, which is very much applicable in torts and was force majure. Sa *four requisites usa ray
damages. You know what the reason is why the court gi.consider sa court, free from any participation. And
said that the Doctrine of Last Clear chance should not what was the evidence considered? Records revealed,
be applied? It would be inequitable to exempt the petitioner took the shortcut instead of the usual
negligent driver and its owner on the ground that route which exposed the voyage into unexpected
the other driver was likewise of negligence. But for hazards (30:18).
40
Japan airline vs. Asuncion. The shore pass. It was Philippine Charter Insurance. So testimony of the
very clear, based on the witness, there was no employee, we comply with the notice. How? Through
assurance that the passengers will be granted a shore telephone. To whom did you call out the notice? It was the
pass when they arrived at the foreign jurisdiction. vice-president of the other party. Which the vice-
Such that if you can put, I’m not saying that you president said, he did not call. The SC believed the vice
should always allege. If you can prove that there was president because according to the court, if it involves
an assurance coming from the carrier about not only millions of pesos, it is very unlikely to communicate it by
shore pass but accommodation and etc. then if there phone.
is a violation then there is a violation of the contract.
Because note that violation of contract of carriage DEFENSES OF CARRIAGE OF PASSENGERS.
does not only mean loss, damage or deterioration
Art. 1759. Common carriers are liable for the death of or injuries to
with respect to goods; or injury or death with respect
passengers through the negligence or willful acts of the carrier’s
to carriage of passengers because when we will reach employees, although such employees may have acted beyond the
torts and damages, even violation of your reputation; scope of their authority or in violation of the orders of the common
for example passengers gitawag ug monkey. Is there carriers.
injury or death? None but there was another injury The liability does not cease even upon proof that they exercised
which fall under damages and this results for the diligence in the selection and supervision of their employees.
violation on the contract of carrier.
Notice of claim. I don’t know if you could think of other way out of Article 1759.
Because the law says even if you will argue, court I did not authorize
ARTICLE 366. Within the twenty-four hours my employee to steal something form the passenger or etc. The law
following the receipt of the merchandise, the claim is very emphatic. That is an absolute responsibility of the common
against the carrier for damage or average be found carrier. Only one situation I could think of, only one situation out:
therein upon opening the packages, may be made, that is by not admitting the driver was not your employee because
provided that the indications of the damage or
1759 says “employees”. The SC has been consistent that drivers of
average which gives rise to the claim cannot be
ascertained from the outside part of such packages, taxi cab are considered as employees.
in which case the claim shall be admitted only at the
time of receipt. Acts of strangers or other passengers?
After the periods mentioned have elapsed, or the
transportation charges have been paid, no claim shall Art. 1763. Carrier is responsible for injuries suffered by a passenger
be admitted against the carrier with regard to the on account of the willful acts or negligence of other passengers or
condition in which the goods transported were of strangers, if the common carrier’s employees through the
delivered.. exercise of the diligence of a good father of a family could have
prevented or stopped the act or omission.
Article 366 of the Code of Commerce, this applies
Under 1763 - to avoid liability then observe due diligence. Example
particularly on carriage of goods. The notice of claim must
ins the case of Pilapil. What was the contention of the passenger?
be filed within 24 hours following the receipt of the
Dapat ang mga buses naa gyud mga grills. The SC said that carrier is
merchandise and that is if the damage if found when you
not an insurer of all risk. And also in the case of Japan Airline.
open the package.
What is the effect if you will not apply with this notice of
CHAPTER THREE – EXTRAORDINARY DILIGENCE
claim requirement? You cannot file a case against a carrier
for loss, damage or deterioration because it involves your
ORALS: Caveat  dili ko ka klaro sa mga tubag
rights of action. Although carriers usually will provide 30-
days sa filling sa notice of claim. So if the carrier for  WHAT IS EXTRAORDINARY DILIGENCE?
example will provide 24 hours, that is okay because it is
provided by the law Article 366. And the very reason I Canoy: Defense of a Common Carrier
hope you understand why this notice is required, so that a
carrier can verify the claim it it is true.  HOW CAN A COMMON CARRIER ESTABLISH THAT
DEFENSE?
Philippine Charter insurance case. this is a question of
evidence. You have an employee, an employee of PGP.
40
Canoy: In maritime law, there are certain rules and regulations HYC: Because there are records that show extraordinary diligence
before and during voyage. He has to make sure that the master of
the vessel is licensed or is competent enough to man the vessel.  HOW DID THE SHIP DISCOVER THAT THERE WERE
STOWAWAYS? CAN THE CARRIER NOT BE BLAMED WHY
 WHAT ABOUT IF THE CARRIER CANNOT AFFORD TO PAY THERE ARE STOWAWAYS AND THEREFORE THEY WERE
THE SALARY OF A LICENSED MASTER? NOT VIGILANT?
Canoy: It is not an excuse. If the carrier engages the services of an Entera: The carrier will establish that they have no knowledge that
unlicensed master, if something happens to the goods or passengers, there were stowaways. Probably they jumped over from the port to
that would be a legal presumption of negligence. Then there is no the vessel.
way for the common carrier to establish extraordinary diligence.
 EXAMPLE OF EXTRAORDINARY DILIGENCE
 HOW IS EXTRAORDINARY DILIGENCE DIFFERENT FROM
OTHER KINDS OF DILIGENCE? Entera: Kapalaran Bus Line Case: Bus was on the right lane and
observed proper traffic rules. There is a presumption of negligence if
HYC: Extraordinary diligence requires a higher regard for safety for you are not observing proper traffic rules.
passengers and goods and the only way that the presumption of
negligence can be rebutted (pak)  EXAMPLE OF NON-COMPLIANCE OF EXTRAORDINARY
DILIGENCE
 HOW DO YOU DELINEATE THAT THIS ONE IS EXTRA AND
THE OTHER IS ORDINARY? HYC: If the crew of the ship is found to be not qualified, there is
absence of extraordinary diligence in the selection of the crew. What
 GIVE AN EXAMPLE WHERE THERE IS AN OBSERVANCE OF is required is that there is proper manning and that the master and
EXTRAORDINARY DILIGENCE AND AN EXAMPLE WHERE the crew is knowledgeable and has experience especially on the
THERE IS A FAILURE routes that they are plying. One situation is where a ship was
shipwrecked because even when the situation of the sea was
HYC: There is extraordinary diligence in the selection of his crew ... normal, the crew had no prior knowledge that there was a sunken
(grrr... fuschia!) ship on their route.
 HOW IS SEAWORTHINESS ESTABLISHED BEFORE THE  IF THE SHIP WAS FOUND TO BE TOP HEAVY AND BECAUSE
SAILING? OF THAT, THE VESSEL SANK, WAS THE CARRIER
EXERCISING EXTRAORDINARY DILIGENCE?
 WHAT IS THE SIGNIFICANCE IF THERE IS THAT NEGLIGENCE
IN RELATION TO EXTRAORDINARY DILIGENCE? Borbajo: No. The ship did not foresee that what they were carrying
was more than the carrying capacity of the ship.
HYC: Extraordinary diligence is a good defense against the
presumption of negligence of a carrier  WHAT IS TOP HEAVY?
 DOES IT FOLLOW THAT IF THE CARRIER IS NEGLIGENT  WHAT IS THE RELEVANCE OF THE CONDITION OF THE
THEN THE CARRIER FAILED TO OBSERVE EXTRAORDINARY VEHICLE OR THE JEEPNEY IN RELATION TO
DILIGENCE? EXTRAORDINARY DILIGENCE?
 WHAT CAN CHANGE THE MIND OF THE COURT IN SAYING Borbajo: They must ensure that there are no defects on the vehicle.
THAT THERE WAS OBSERVANCE OF EXTRAORDINARY An example is if there is a tire blow-out during the voyage, which
DILIGENCE DESPITE THE NEGLIGENCE COMMITTED BY THE would be considered as negligence on the part of the carrier.
CARRIER LIKE IN THE CASE OF OVERLOADING?
 IN CHAPTER 2, IT WAS ESTABLISHED THAT WHEN IT
HYC: Like Stowaways. The carrier can say that despite the prior COMES TO TIRE BLOW-OUT, IT MUST BE ESTABLISHED
counting of passengers before the voyage, it was found out later WHETHER ALL OTHER CIRCUMSTANCES RELATIVE TO THE
that there were stowaways who stealthily entered the ship, TIRE SHOULD BE PROVEN/ESTABLISHED.
presumption of negligence may be rebutted.
 SHOULD WE INSPECT ALL THE HANDBAGS BEING
 HOW IS THE PRESUMPTION REBUTTED? BROUGHT IN BY THE PASSENGERS OF THE BUS?
40
Abejo: No, it is unconstitutional and a violation of human rights but  Common carrier is mandated to exercise this extraordinary
an exception would be the inspection of baggage for aircrafts. diligence not only because of the passengers that they are
bound to carry but also in relation to protect the lives of
 RIGHT NOW, THOSE WHO DO THE INSPECTION ARE PART those pedestrians as well as passengers and drivers of
OF THE MCIAA, OPERATOR OF THE TERMINAL. NO AIRLINE other vehicles.
PERSONNEL WILL DO THE INSPECTION.
CAN PARTIES STIPULATE THAT THE COMMON CARRIER WILL NOT
 IF THE AIRLINE PERSONNEL WILL DO AN INSPECTION ON EXERCISE ANY DILIGENCE? NO
TOP OF THE INSPECTION MADE BY THE PERSONNEL OF
THE TERMINAL, WILL THE INSPECTION BE LEGAL? CAN PARTIES STIPULATE THAT A LESSER DEGREE OF DILIGENCE
WILL BE EXERCISED? QUALIFY
Abejo: Yes, because the aircraft should exercise that extraordinary
diligence. The aircrafts have the right to inspect.  Passengers: Absolutely NO
 Goods: It can be stipulated as long as the three (3)

requisites under Article 1744 are complied
-o- DISCUSSION -o-
Art. 1744. A stipulation between the common carrier and the
EXTRAORDINARY DILIGENCE shipper or owner limiting the liability of the former for the loss,
destruction, or deterioration of the goods to a degree less than
*Art. 1733. Common carriers, from the nature of their business and extraordinary diligence shall be valid, provided it be:
for reasons of public policy, are bound to observe extraordinary
(1) In writing, signed by the shipper or owner;
diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances (2) Supported by a valuable consideration other than the
of each case. service rendered by the common carrier; and
 “Valuable consideration” fee, charge, freight
Such extraordinary diligence in the vigilance over the goods is that is being imposed by the carrier in relation to
further expressed in Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, the transportation
while the extraordinary diligence for the safety of the passengers is  Valuable consideration will DEPEND on what is
further set forth in Articles 1755 and 1756. the industry practice insofar as air carriage and
water carriage is concerned. BUT with respect to
*Art. 1755. A common carrier is bound to carry the passengers land, I am not aware of any regulation imposed
safely as far as human care and foresight can provide, using the by the agencies involving land transportation.
utmost diligence of very cautious persons, with a due regard for all  What I am aware of is the regulation on the fare
the circumstances. of passengers (land, except for habal-habal). In
air, there is no regulation (bagsak presyo due to
IMPORTANT: “according to all circumstances of each case” and competition). In water, also no regulation
“with due regard for all the circumstances” because of the new law RA 9225 about the
deregulation of fare rates.
Once it can be proven that there was exercise of extraordinary  Habal-habal  illegal per se but RA 4136 does not
diligence, it can actually exculpate (not merely mitigate). absolutely prohibit habal2x, recognizes the registration
of motorcycles for personal use NOT commercial use
SIR: Not expressly stated by the cases or the authors of the book but
what I noticed is that “if there is negligence, there is failure” (3) Reasonable, just and not contrary to public policy.
 Subject to the circumstances of the case
WHY IS EXTRAORDINARY DILIGENCE DEMANDED FROM COMMON  DOES THIS REFER TO THE VALUABLE
CARRIERS? CONSIDERATION IN (2)? NO
- This refers to the STIPULATION
 Supreme Court recognized the apparent violations
committed by these drivers, recklessness, which impels SIR: Article 1744 talks about “limiting the liability” but IMO, this talks
the Court to say that there is an extraordinary diligence about “limiting the degree of the diligence required”
that is demanded.
40
 When we talk about limitation of liability, supposedly the objective was achieved by the issuance of the
law should be referring to 1747 (to be discussed in Chapter acknowledgement receipt.
4).
- e.g. In case of loss, damage, or deterioration of the MARIANO vs. CALLEJAS
goods to be transported or being transported by the In relation to land transportation
common carrier, the liability of the carrier is fixed in
the sum of P100.00 unless the shipper declares a
The bus was travelling on the right lane and there was another
higher price.
vehicle which overtook and which was already traversing on the
 The law (1744) was actually referring to the kind of
same lane where the bus was also plying.
diligence that can be agreed upon by parties.
Jump a bit to Chapter 4: Article 1747 is connected with Article 1749. Article
SC: There was no reason for the driver of the bus to know and to
1749 will talk about the reasonableness of the amount that is subject of the foresee whether the truck would be traversing on its own lane.
limited liability. Given the circumstances, the lane where the vehicle was traversing
- e.g. “fixed in the sum of P100.00”  valid pursuant to 1747. BUT and the filing of the appropriate criminal cases against the driver of
is P100 reasonable? Refer it to 1749 the other vehicle, taken all in all, there was observance of the
exercise of extraordinary diligence.
WHEN IT COMES TO EXTRAORDINARY DILIGENCE, DO YOU NEED
TO PROVE THAT YOU HAVE BASICALLY COMPLIED WITH THE EASTERN SHIPPING LINE vs. IAC
REQUIREMENTS OF SELECTION AND ENGAGEMENT OF YOUR
DRIVER AND CONDUCTOR? About a smoke that was noticed but the fire was already big and
- There is no use because later on when you take up torts there was proof that the fire started 24 hours before.
and damages, that only applies under 2176 on quasi-delict.
Proof on the selection and engagement is NOT a defense SC: There was failure.
for violation of contract of carriage.
- When you answer contract of carriage cases, do not ever *Do not be misled that if there is a fact of smoke, then you will
mention Selection and Engagement because that will only conclude that there is failure. Not necessarily because you have to
show your ignorance of the law. remember 1733 and 1755: with due regard for all the circumstances
of the case.
*If there is a particular problem that suits a case on the question of
extraordinary diligence, then you have to apply the ruling of the DELSAN TRANSPORT vs. CA
Court with respect to that case. How did the common carrier try to prove compliance?
- In the absence of a specific decision of the Court, then you
have to rely on 1733 and 1755. They have certificates of dry docking. It was inspected by the coast
- That does not prevent you from applying by analogy the guard.
cases decided by the SC.
SC: Those are not sufficient because when we talk about
CASES: seaworthiness, what is important is whether the vessel can
withstand the vicissitudes of the voyage.
REPUBLIC vs. LORENZO
Issue on the failure to surrender of the original bills of lading to the If for example there were no big waves experienced, no strong
consignee upon delivery winds, no strong typhoon and the vessel sank. The common carrier
has to give an explanation why the vessel sank.
SC: The failure to surrender does NOT amount to the failure to
observe extraordinary diligence. NATIONAL STEEL vs. CA
- What made the SC conclude that there was no failure to  What were shown as evidence were certificates of dry
exercise but that there was compliance was BECAUSE docking, inspection.
there was acknowledgement receipt issued, signed by the
representatives of the consignee in lieu of the surrender of SC: There was no negligence established. What is involved is a
the bills of lading. The very purpose why original BOL are tramping business and this is a private carrier. If the carrier is
to be surrendered to the consignee is to make sure that private, then negligence must be proved. There is no presumption of
there is proof of the delivery of the goods and this negligence compared to a common carrier.
40
Q&A: WHAT IS THE EFFECT OF INSPECTION AND CERTIFICATE OF Q&A: If the carrier will say that the boat will leave but it will only
THE COAST GUARD? use one engine instead of three so the trip will be three hours
 These are just some of the proofs that: you complied with longer, are you allowed as a passenger to ask for a refund?
law as to inspection and dry docking because there is a - YES because of the possible delay you will experience.
rule in Marina that the ship needs to be dry docked every - Even in the absence of a fixed time, you have to refer to
five years. However this is not sufficient to show the estimated time of arrival to consider which one is
seaworthiness. It is the actual encounter/voyage itself that reasonable.
will determine given all the circumstances.
PHILIPPINE AMERICAN GENERAL INSURANCE vs. CA
LOADSTAR SHIPPING vs. CA - Even if not overloaded but if the vessel is top heavy, that is
- The carrier was aware of an approaching typhoon. failure
- SC: There was a failure to exercise. - What is TOP HEAVY is a question of expertise.
COASTWISE LIGHTERAGE & MANILA STEAMSHIP CASES SIR: I realized (after talking to the management of Robles Shipping)
- Referring to a patron who is unlicensed that even if, as to the number of vehicles and passengers, it is within
the capacity, that is not overloaded. BUT in case, buhi-an na ang
NEGROS NAVIGATION vs. CA anchor, when the vessel floats, magtakilid, then there is something
- Overloading of passengers with the additional fact that the wrong. That is top heavy. It should be balanced when it floats. It
captain was found to be playing mah-jong. needs an expert witness to testify.
SIR: Sometimes it is illogical to know from the pronouncement of the We will study about CONTAINERIZATION where the goods are
SC that if the captain is not supposed to play mah-jong, does it placed in a container. It is easier on the part of the common carrier
follow that the captain has to be there 24 hours? What is then the to place these containers in the hold because it is the same shape.
purpose of the chief mate/ assistant? Though it is not clear in the
case whether it was the rest period/break of the captain. What was Q&A: IF THE VESSEL IS TOP HEAVY, DOES IT AUTOMATICALLY GIVE
emphasized was that the captain was playing at the time of the YOU A CAUSE OF ACTION?
incident. - It depends. You have to know if the vessel has the capacity
to be top heavy. If it has the capacity, then it can be top
PHILIPPINE HOME ASSURANCE vs. CA heavy. But in the first place, if dili pwede ma.top heavy but
- Acetylene cylinder was placed in the accommodation area gi.top heavy, that is failure.
which is intended for passengers. - Ground: It would be in the aspect of seaworthiness.
*SIR: If the carrier cannot prove ENGINE FAILURE and whether it was SULPICIO vs. FIRST LEPANTO-TAISHO
unexpected, that is failure to exercise extraordinary diligence. - During the unloading of the cargo placed on a crane, the
crane fell.
WHAT IF BECAUSE OF THE FAILURE, THE PASSENGER’S TRIP WAS - SC: There was failure.
DELAYED? DO YOU HAVE A CAUSE OF ACTION AGAINST THE
CARRIER? SIR: What bothers me, the SC did not discuss why there was failure. I
- Whether there was a commitment by the common carrier think it was because of the absence of any evidence presented by
of the arrival; Sulpicio Lines.
o If no commitment, only an estimation, then you
may not be entitled to any reparation or VECTOR SHIPPING vs. MACASA
damages because of the delay - There was a defect in the ignition of the engine
- SC: There was failure
WHAT ARE THE POSSIBILITIES WHERE YOU CAN CLAIM DAMAGES
BECAUSE OF THE FAILURE TO EXERCISE? LAND: If there is TIRE EXPLOSION, it is under JUNTILLA vs.
- There has to be a physical injury or physical death in FONTANAR.
relation to passengers - Carrier must establish what caused the tire explosion and
- In relation to goods  Loss, destruction, or deterioration what are the probabilities surrounding the explosion.
of the goods
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VICTORY LINER vs. RACE “common carriers you are AUTHORIZED”. They may or
- The owner of the bus cannot be compelled to accept the may not inspect.
driver who suffered a fractured leg because of an accident
and who is limping heavily.
STILL on NOCUM:
NOCUM vs. LAGUNA TAYABAS BUS (do not forget)
- Whether there has to be inspection involved in land SC: With respect to baggage:
transportation? - “inquiry may be VERBALLY made if the cause/s of
apprehension is not apparent”  pwede wala
SIR: For me, I don’t think that the Nocum Case still applies. But - Compare this with SALUDO: common carrier has the DUTY
remember, given the circumstances on inspection in relation to to make inquiry
extraordinary diligence, you must cite Nocum in Land Transpo and o But at present, airline companies are not making
Saludo involving Air any inquiry. It is the personnel of the airport
- SIR: May pag gibali: ang sa land unta ang “duty” and ang
There was a box allegedly filled with clothes but was found out to be sa air ang “may be verbally made”
firecrackers. It blew up.
SC: “When there are sufficient indications that the representations
SC: The carrier is not duty bound to inspect. of the passenger regarding the nature of his baggage may not be
- On passengers, SC said, “fairness demands that in true, in the interest of the common safety of all, the assistance of
measuring a common carrier's duty towards its the police authorities may be solicited, not necessarily to force the
passengers, allowance must be given to the reliance that passenger to open his baggage, but to conduct the needed
should be reposed on the sense of responsibility of all the investigation consistent with the rules of propriety and, above all,
passengers in regard to their common safety.” the constitutional rights of the passenger.”
- SIR: I think that is not anymore applicable now, maybe
sauna na buotan pa ang mga tao. “When there is evidence of circumstances indicating cause or causes
of apprehension, Common carrier MUST ACT”
SIR: How to solve in land transportation? For me, one method is - WHAT MUST HE ACT? Acts that are consistent with the
through these mechanical gauge/equipment. I.check jud like in the preceding paragraph; call the police for investigation but
airport. not to force the passenger to open the baggage.
- Can you claim Constitutional Right? I don’t think so
because it is deemed waived once you submit it. (Just like SIR: IMO, there is a bigger leeway on the part of the passenger who
in the malls) has baggage in land transportation compared to air transportation.
In air transportation, the common carrier has the duty to make
SIR: IMO, Bus operators should invest on equipment to inspect inquiry, it is not its duty to ask repetition of statement and open the
baggage. Government should mandate it. Or the same as Airport bags and see it for itself.
terminals as long as it can be established that there would be no
loading and unloading in between. That is supposed to be the That means maka.rely lang just like in LBC where they will ask you if
concept of land transportation. there is cash inside but you are the one who will place it inside the
package. If you put cash and later upon delivery, the cash
MAKIGLALIS KA SA AIRPORT, YOU DO NOT WANT YOUR BAGGAGE disappears, common carrier is NOT liable for not inspecting whether
TO BE INSPECTED, CAN YOU SUE THE CARRIER? or not there is cash because what is only required under SALUDO is
- NO, because the inspection is being done by a third party. to make inquiry.
RA 6235: AN ACT PROHIBITING CERTAIN ACTS INIMICAL TO CIVIL

AVIATION, AND FOR OTHER PURPOSES. -o- ADDITIONAL MOOLAH -o-
- AUTHORS: Common carriers are bound
- SIR: NO, that is not the language of the language but for SURRENDER OF BILL
purposes of bar exam, you have to answer as what the
authors have expressed. IMO, the language of the law did CODE OF COMMERCE: ARTICLE 353: The legal evidence of the
not say “common carriers you are BOUND”, instead, it said contract between the shipper and the carrier shall be the bills of
lading, by the contents of which the disputes which may arise
40
regarding their execution and performance shall be decided, no Veloso: No, it is a ticket. Bill of lading is only good for goods. The
exceptions being admissible other than those of falsity and material ticket is a contract between the common carrier and the passenger.
error in the drafting.
 WHAT IS A BILL OF LADING?
After the contract has been complied with, the bill of lading which A bill of lading is a written acknowledgment, signed by the master of
the carrier has issued shall be returned to him, and by virtue of the a vessel or other authorized agent of the carrier, that he has
exchange of this title with the thing transported, the respective received the described goods from the shipper, to be transported on
obligations and actions shall be considered cancelled, unless in the the expressed terms, to the described place of destination, and to be
same act the claim which the parties may wish to reserve be delivered there to the designated consignee or parties. (AH)
reduced to writing, with the exception of that provided for in Article
366.
 WHAT ARE TO BE CONTAINED IN A BOL?
In case the consignee, upon receiving the goods, cannot return the Veloso: The description of the goods, names of the parties (shipper
bill of lading subscribed by the carrier, because of its loss or of any and common carrier), the time and place of destination where the
other cause, he must give the latter a receipt for the goods goods are to be delivered, the rights and obligations of the parties.
delivered, this receipt producing the same effects as the return of
the bill of lading.  ARE YOU SAYING THAT THIS TICKET AND THE BOL ARE THE
SAME?
NOTE: LACKING CASES
- Kapalran vs. Coronado
Veloso: They are both considered as contracts.
- PAL vs. CA
- Cangco vs. Manila Railroad
- Solidbank vs. Sps. Tan  IF A BOL IS A CONTRACT, WHERE DO WE FIND THE
- Caltex vs. Sulpicio CONSENT?
- Manila Steamship vs. Abdulhaman
- Belgian Overseas vs. Phil First Insurance
- Valenzuela Hardwood vs. CA Veloso: When the shipper signs the BOL accepting all the terms
- Baritua vs. Nimfa stated in the document, the consent of the shipper is already
- Tabacalera vs. North Front Shipping
manifested. From the time the common carrier accepted the goods
- Aboitiz Shipping vs. Insurance
- Yrasuegui vs. Philippine Airlines and places their signature in order to manifest their consent.
 IS THERE ANY RELEVANCE BETWEEN THE SIGNING OF THE

MASTER OF THE BOL AND THE CONSENT AS AN ESSENTIAL
ELEMENT OF THE BOL AS A CONTRACT?
Veloso: Common carriers are bound to exercise extraordinary

diligence and are obliged to deliver the goods to the consignee or
the authorized person to receive the goods
 WHAT ARE THE OTHER TWO ELEMENTS OF A CONTRACT?

IN A BILL OF LADING?
Veloso: Consideration and Object/Cause? In BOL, consideration is

when the shipper gives the goods to the common carrier and the
carrier delivers it to the consignee and in return, the consideration
for the common carrier is the money given by the shipper. The cause
is for the delivery of the goods.
CHAPTER FOUR – BILL OF LADING
 IN A CONTRACT OF TRANSPORTATION, WHO ARE THE
ORALS:
PARTIES?
 IS THAT A BILL OF LADING? (SUPERCAT TICKET)
Ericson: The parties to this contract would be the
40
passenger and the carrier.

 THE SECOND SENTENC READS: THE CARRIER WILL NOT BE
 IF THERE IS VAGUENESS IN THE WORDING OF A LIABLE FOR INJURIES, DEATH, AND OTHER LIABILITIES
CONTRACT, HOW WOULD YOU RESOLVE IT? ARISING FROM FORCE MAJEURE, OR EVENTS BEYOND THE
CONTROL OF THE CARRIER, ITS OFFICERS, CREWS, AGENTS
Ericson: I would resolve it in the favour of the passenger because it OR EMPLOYEES. IS THAT VALID?
is provided for in the Civil Code that in contracts of carriage (Article
24). Like in contracts of adhesion, one of the parties is at a Erojo: I believe there was also a case saying that if there was loss,
disadvantage. damage or deterioration of the goods, is caused by force majeure or
beyond the control of the carrier and its employees, then it would
Article 24. In all contractual property or other relations, when one of have no liability. The court upheld it because the goods were store in
the parties is at a disadvantage on account of his moral dependence, a government warehouse and then there was a fire. Although one of
ignorance indigence, mental weakness, tender age and other the petitioners was able to retrieve some rice but the rest were
handicap, the courts must be vigilant for his protection. burned.
 WHERE IN ARTICLE 24 WOULD A PASSENGER IN A  IF YOU ARE THE LAWYER OF THE PASSENGER OR THE
CONTRACT OF ADHESION FALL? SHIPPER OR CONSIGNEE WHO WOULD LIKE TO FILE AN
ACTION AGAINST THE CARRIER, CAN YOU ARGUE ON THE
Ericson: It would be moral dependence or it would fall on the catch- BASIS OF THE FINE PRINTS THAT YOU WOULD SEE IN
all provision “other handicap”. The handicap of the passenger would EVERY TICKET?
be not being able to negotiate the terms and conditions of the
contract and being under the control of the carrier while on board. Gaviola: Yes, I would base my arguments on the BOL or the ticket as
long as it is favourable to my client. It is favourable when the
THERE IS A DIFFERENCE WHEN YOU TALK ABOUT ELEMENTS THAT application thereon would give more liability to the carrier.
WILL RIPEN INTO A CONTRACT AND THE OTHER SITUATION WOULD
HAVE SOMETHING TO DO WITH ENFORCEABILITY OF THE CONTRACT  ARE YOU SAYING THAT THE SUFFICIENCY OF YOUR
BECAUSE ENFORCEABILITY OF EXCECUTION PRESUPPOSES THAT AT ARGUMENT DEPENDS ON THE VALIDITY OF THE
THE INCEPTION, THERE EXISTED A VALID CONSENT TO PAY. STIPULATION OR DOES IT DEPEND ON THE
CIRCUMSTANCES SURROUNDING YOUR CLIENT?
 WHY WOULD YOU NEGOTIATE IN THE FIRST PLACE?
Gaviola: It depends on the circumstances surrounding the client
Ericson: Perhaps to give more liability or responsibility to the carrier. since it is a contract of adhesion. For example there was ambiguity
on the BOL. If there is no ambiguity, I would argue on the basis of
BILL OF RIGHTS OF PASSENGERS  THIS IS FOR AIRLINES. PLS READ the Civil Code wherein this would be interpreted liberally in favour of
THESE WHEN YOU INTEND TO SUE AN AIRLINE. the passenger.
 PARAGRAPH 18 (TICKET) SAYS: CLAIMS FOR INJURIES, Profile of the client: a farmer or carpenter and the stipulations on
DEATH AND OTHER LIABILITIES MUST BE FILED WITH THE the ticket (vessel’s ticket) would be in English or in such terms not
CARRIER WITHIN 30 DAYS FROM THE DATE THE VESSEL readily understandable by my client, so I can argue that my client is
ARRIVED AT PORT OF DESTINATION. IS THAT VALID? in no position to know or to be aware of what is indicated in the
ticket. My client wasn’t able to finish college and he doesn’t know
Erojo: Yes, it is not unreasonable and not contrary to public policy. I how to read and write. His wife died and he has to be there for the
read a case where there was a shipper which sent goods like rice. burial and it’s a place where there is only one ship sailing from Cebu
There was a delay in the arrival of the goods. There was a stipulation to that place.
in the bill which states that if you would file an action against the
carrier, it must be within 60 days. The action was filed out of time.  BUT ISN’T IT IN ONGYIU VS. CA THAT THE SC SAID THAT
THE SHIPPER/PASSENGER HAS THE RIGHT TO REJECT?
 WHAT WAS THE REASON FOR THE STIPULATION? HOW WILL CHALLENGE THE ARGUMENT OF THE OTHER
PARTY IF THE LAWYER USES THIS CASE?
Erojo: In order to protect the common carrier. I believe that the
earlier it is, at least the memories of the persons would still be fresh.
40
Gaviola: I would argue in the same ground that this is a contract of

adhesion and that my client has no other choice, for example, that For purposes of examination, know about Clean vs. Foul, Received
ship is the only one sailing that time and there was a sense of for shipment and On Board (Won’t ask about the others daw!)
urgency that he has to be on that ship, so he has no option.
CLEAN BILL OF LADING
TAKE NOTE THAT YOU HAVE TO DISCUSS THAT IN RELATION WITH
SWEETLINES VS. CA BECAUSE YOU HAVE TO NOTE THE PECULIAR Case in point is Republic vs. Lorenzo
CIRCUMSTANCES IN THIS CASE. YOU CANNOT APPLY THAT IN ALL - SC: even if it is true that the goods were really damaged at
CASES. the time of receipt by the common carrier, this will not
change the clean bill of lading that was issued.
 PARAGRAPH 19. COURT JURISDICTION FOR SUITS. ALL
SUITS ARISING OUT OF THIS CONTRACT SHALL BE FILED IRON BULK VS. REMMINGTON INDUSTRIAL
AND TRIED ONLY ON CEBU CITY. IS IT VALID? - What does the common carrier do if it observes damage to
goods for shipment before sealing and issuance of BOL?
Quibot: Yes, the venue of the suit can be stipulated. o Annotate or
 In the form of a marginal note in the
 ASSUMING THAT THE TRIP IS CEBU-TAGBILARAN, THE BOL indicating the true condition
PASSENGER FILES IN TAGBILARAN, WOULD YOU FILE A o Refuse acceptance
MOTION TO DISMISS ON THE GROUND OF IMPROPER - In the CASE, there was an issue; common carrier
VENUE? contended that their BOL was a pro-forma. Court did not
accept their argument because even if it is PRO-FORMA,
Quibot: Yes, because it is agreed in our contract that the only venue what they should have done was to make a marginal note
allowed is in Cebu City. in the BOL.
 IF YOU WERE THE LAWYER OF THE PLAINTIFF, WHAT -o- ADDITIONAL MOOLAH -o-
WOULD YOU SAY TO FOR THE MOTION TO DISMISS NOT
TO BE GRANTED? CLEAN BILL OF LADING is one which does not contain any notation
indicating any defect in the goods.
Quibot: I would say that the client wasn’t able to read it or he wasn’t
in the right state of mind because he was in a hurry or was in FOUL BILL OF LADING is one that contains such notation.
distress...
-o- carry on -o-
 IF I AM THE LAWYER OF THE DEFENDANT AND I WOULD
ARGUE THAT THERE IS A SC CASE THAT SAYS UPON BOL is just a piece of paper. Lesser contents only: name of the
PURCHASE OF THE TICKET, IF THERE IS NO OBJECTION parties, quantity, name of the consignee who will supposedly sign,
THEN THE BUYER IS DEEMED TO HAVE ACCEPTED THE conditions, name of the vessel, date, shipper, and destination.
TERMS OF THE CONTRACT, HOW WOULD YOU CHALLENGE
THAT? PROVIDENT INSURANCE VS. CA
- ISSUE: stipulation on notice of claim
Quibot: As much as the law is black and white, (di kaau ko ka - Reiteration of Article 366 of the Code of Commerce:
klaro)... there are times that we are blinded by emotions... o Within twenty-four hours following the receipt of
the merchandise a claim may be made against
the carrier on account of damage or average
found upon opening the packages, provided that
the indications of the damage or average giving
rise to the claim cannot be ascertained from the
exterior of said packages, in which case said
claim shall only be admitted at the time of the
-o- DISCUSSION -o- receipt of the packages.
BILL OF LADING AND OTHER FORMALITIES
40
- If the damage is apparent, then it should be made at the - Article 1745: Any of the following or similar situations shall
time of delivery. If not, it should be made within 24 hours be considered unreasonable, unjust and contrary to public
in writing. policy:
- SC: the stipulation is VALID. o (1) That the goods are transported at the risk of
the owner or shipper;
SIR: Theoretically, if there is a stipulation that probably shortens the - Anyway, there was NO issue on this sentence.
filing of a notice of claim, my opinion is would probably be
considered invalid because it would be too short. VENUE:
- For example: if you put, “if the damage is apparent from
the package, then it should be made on the time of SWEETLINES CASE
delivery, otherwise it should be made within 5 days from - It is hereby agreed and understood that any and all arising
delivery, in writing, under oath by personally registered out of the conditions and provisions of this ticket
mail or private courier. irrespective of where it is issued shall be filed in the
- Not the whole stipulation can be declared invalid IMO. competent courts in the city of Cebu  INVALID
Probably the part only that requires a shorter period than - 2 REASONS:
Article 366 because this provision requires 24 hours.
PILIPINO TELEPHONE VS. TECSON (GR 156966)
It may also be valid depending on the nature of the business or the - Ponente’s Opinion: There was a circumstance in the case
industry covered. of Sweetlines that made the SC to conclude the stipulation
- SIR: so far I cannot think of an industry or business which to be invalid. Those circumstances include the monopoly
would require a shorter period within which to file a notice in the coastwise industry by other shipping companies and
of claim. there is a season (like Christmas Season) where the
passengers would not anymore bother to read the
*THE RULE ON STIPULATION is the validity will depend on the stipulations.
circumstances of the case and the nature of the stipulation. - “The circumstances in Sweet Lines, Inc. vs. Teves,
[6]
wherein this Court invalidated the venue stipulation
SERVANDO VS. PHIL. STEAM NAVIGATION contained in the passage ticket, would appear to be rather
- There is an exemption clause exempting the carrier from peculiar to that case. There, the Court took note of an
responsibility by reason of force majeure, dangers or acute shortage in inter-island vessels that left passengers
accidents of the sea or other waters, war, public enemies literally scrambling to secure accommodations and tickets
and fire. from crowded and congested counters. Hardly, therefore,
- The goods were placed in the customs warehouse, part of were the passengers accorded a real opportunity to
it was already withdrawn. There was an issue before examine the fine prints contained in the tickets, let alone
whether there was already delivery to the consignee reject them. “
which SC said that there was already delivery because the - Q: ARE THOSE CIRCUMSTANCES STILL PRESENT NOW?
consignee was already informed of the arrival and have o Probably there is a monopoly in other routes but
the reasonable opportunity to remove or dispose the not in all cases. Example: Ormoc-Cebu, there are
goods. already 3 shipping companies involved in
- The other issue was the validity of the exemption clause. fastcraft (Supercat, Weesam, Oceanjet)
- SC: VALID. It is a reiteration of what is provided in the Civil o You will have to examine by the same nature of
Code that exempts a person from liability if the cause is the vessel. You cannot say that there is no
force majeure. monopoly because there is a fastcraft and there
is a slowboat because they are two different
IF it is a mere REINSTATEMENT of what is provided by law that can characteristics.
be upheld by the Court.
YSMAEL VS. BARRETTO
- In the case of Servando, prior to the challenged stipulation
is another sentence which says: Carrier shall not be The stipulation reads “the carrier shall not be liable for loss or
responsible for loss or damage to shipments billed damage from any cause or for any reason to an amount in excess of
“owner’s risk” unless such loss or damage is due to three hundred pesos or any single package of silk or other valuable
negligence of carrier. cargo”
40
- Specifically refers to silk and what is referred here as - Do not use 1749 since this is only as to the limitation of
unconscionable and void was the amount of three the liability but the reasonableness of the AMOUNT is
hundred pesos per package of silk. based under 1750.
- SC: the value of the silk is about P2,000, so it is
unconscionable to only limit it to P300 Article 1750. A contract fixing the sum that may be recovered by the
- NOTE: Ysmael has been decided long time ago and you can owner or shipper for the loss, destruction, or deterioration of the
still argue that contracts of adhesion are not prohibited goods is valid, if it is reasonable and just under the circumstances,
per se and therefore if there is a stipulation similar to this, and has been fairly and freely agreed upon.
there is a probability that it can still be upheld by the
court. -o- ADDITIONAL MOOLAH -o-
TWO-FOLD CHARACTER OF BOL VALIDITY OF STIPULATIONS

- Receipt
- Contract ARTICLE 1744: A stipulation between the common carrier and the
- Third: Symbol of Goods or Document of Title shipper or owner limiting the liability of the former for the loss,
destruction, or deterioration of the goods to a degree less than
BOL AS A CONTRACT extraordinary diligence shall be valid, provided it be:
When it is a contract, parties are bound and a contract of (1) In writing, signed by the shipper or owner;
transportation is subject to Article 1733 to 1754.
(2) Supported by a valuable consideration other than the
service rendered by the common carrier; and
WHAT ARE THE IMPLICATIONS OF A BOL AS A CONTRACT?
- Presumption of Negligence
(3) Reasonable, just and not contrary to public policy.
- Extraordinary diligence required
Art. 1745. Any of the following or similar stipulations shall be

CAN THERE BE A REDUCTION OF DILIGENCE? considered unreasonable, unjust and contrary to public policy:
- Yes, as long as those 3 requisites are present
(1) That the goods are transported at the risk of the owner
Limitation of Liability Principle under 1749 or shipper;
Article 1749: A stipulation that the common carrier’s liability is (2) That the common carrier will not be liable for any loss,
limited to the value of the goods appearing in the bill of lading, destruction, or deterioration of the goods;
unless the shipper or owner declares a greater value, is binding.
(3) That the common carrier need not observe any
- 3 STIPULATIONS: 2 are prohibited and 1 is allowed diligence in the custody of the goods;
- IF you are asked for the UNQUALIFIED LIMITATION, then
you just have to 1749 without the UNLESS. (4) That the common carrier shall exercise a degree of
diligence less than that of a good father of a family, or of a
man of ordinary prudence in the vigilance over the
TAKE NOTE: There are BOL that will not lose the very phrase under
movables transported;
1749. Probably the stipulation will read: The common carrier’s
liability for loss, damage or deterioration of goods will only be
(5) That the common carrier shall not be responsible for
limited to the amount of P500. The shipper may however recover the acts or omission of his or its employees;
more than the amount of P500 if the shipper declares a higher value
and pays the corresponding freight. (6) That the common carrier's liability for acts committed
- It is not the exact wording as that provided by law but to by thieves, or of robbers who do not act with grave or
be sure, you can state it as worded by 1749. irresistible threat, violence or force, is dispensed with or
diminished;
To determine the REASONABLENESS of the limitation, your legal
basis is 1750. (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.
40
Zzzz..... (1) ARTICLE 1748: An agreement limiting the common carrier’s

liability for delay on account of strikes or riots is valid.
CASES WHERE THE STIPULATION WAS UPHELD BY SC (2) ARTICLE 1749: A stipulation that the common carrier’s
liability is limited to the value of the goods appearing in the
*SERVANDO bill of lading, unless the shipper or owner declares a greater
- Reiteration of the New Civil Code regarding force majeure value, is binding
regarding exemption for liability (3) ARTICLE 1750: A contract fixing the sum that may be
recovered by the owner or shipper for the loss, destruction, or
*PROVIDENT INSURANCE deterioration of the goods is valid, if it is reasonable and just
- Notice of claim under the circumstances, and has been fairly and freely
agreed upon.
*MAGELLAN MANUFACTURING VS. CA
- Regarding on board bill and receipt for shipment: It was contended UNDER WHAT CIRCUMSTANCES CAN A COMMON CARRIER NOT
that the receipt for shipment was converted into an on board bill. AVAIL OF LIMITED LIABILITY?
1. ARTICLE 1747: If the common carrier, without just cause,
- SC: That is not possible, that is stretching substantial compliance delays the transportation of the goods or changes the
too far and that would eliminate the difference between the two stipulated or usual route, the contract limiting the
bills. common carrier’s liability cannot be availed of in case of
the loss, destruction, or deterioration of the goods.
*ONGYIU VS. CA 2. ARTICLE 1749: xxx when the shipper declares a higher
- Leading case on questions where the ticket was not signed by a value.
passenger  one of the arguments of the Ongyiu, a lawyer
WHAT IS THE EFFECT OF THE LIMITED LIABILITY CLAUSE TO THE
- SC: That is not material because there can be a binding contract PRESUMPTION OF NEGLIGENCE?
even if there is no signature by the passenger. - ARTICLE 1752: Even when there is an agreement limiting
- Upheld the limitation of liability  Leading case for contracts of the liability of the common carrier in the vigilance over the
adhesion goods, the common carrier is disputably presumed to have
- Ongyiu, as a lawyer and businessman, cannot claim ignorance of been negligent in case of their loss, destruction or
the terms and conditions of the ticket. That is resolving the validity deterioration.
of the stipulation depending on the circumstances of the case.
SIR: With respect to airlines, in the Warsaw Convention, the Bill of
CASES WHERE THE STIPULATION WAS NOT UPHELD BY SC Rights of Passengers, you read this.
*SWEETLINES HOW TO APPLY PAROL EVIDENCE RULE INSOFAR AS BOL IS

- SC: There is shortage of interisland vessels, piers are congested, CONCERNED
conditions are worse at peak and/or rainy seasons, immediate
concern of passengers is to be able to board. PAROL EVIDENCE  kind of evidence that is not in the document
- If you are the lawyer of the carrier, you just have to dispute all of - Rule is: what has been stated there, that is the complaint
this circumstances so that you can validate the validity of the agreement of the parties and that is in the case of BOL.
stipulation on venue. - Example: if what is issued is a clean BOL, the carrier cannot
be permitted to modify (that is not in actuality or reality a
*MAERSK LINE VS. CA clean bill because the moment we receive the goods, the
- A stipulation that the carrier does not undertake the arrival of goods have already suffered defects), the carrier is
goods at any particular time. prevented to do that.
- That is the rule in evidence subject to a lot of exceptions
- SC: INVALID, because it should be made within reasonable time later (Evidence laters!!)
NOTE: There are 3 articles in the New Civil Code that provide for For BOL, you should be able to raise it as an issue in your pleading,
valid stipulations on the limitation of the carrier’s liability. either complaint or answer, and you raise it as an issue during pre-
trial conference.
40
- The common carrier, who may be benefited all the time on

the BOL specially on limitation of liability, will always cling
on to that BOL because it is a contract. COGSA: CARRIAGE OF GOODS BY SEA ACT
Parol evidence rule is also the rule why the shipper, who has a Under the law, COGSA, liability is $500 per package.
package which sustained damage, will not be allowed to recover the
actual value on the package that was damaged by reason of what is EASTERN SHIPPING LINES VS. IAC citing MITSUMI and Co. (U.S.
the limitation stated in the BOL unless the shipper declares a higher CASE)
value. - BOL says: 2 containers and then below it, 128 cartons,
below it is the description of the goods “men’s garments,
In the case of ONGYIU, for example, what he lost was his evidence fabrics and accessories, freight paid”
inside his maleta going to Butuan. His maleta was misplaced, instead - CONTAINERIZATION: There is one container with goods
of Butuan, it went to Manila. Ongyiu wanted to recover the value of inside (especially from abroad).
the lost articles. - UNDER COGSA, is one container, one package?
- SC: There is a limitation of the liability in the ticket, you did o Example: if you have 100 boxes inside one
not declare a higher value therefore you are bound container, then you have 101 packages, so; 101 x
because the ticket is a contract. $500 = 50,500
o In the Masters of Law program, we were told
BOL AS AN ACTIONABLE DOCUMENT that one container should be considered as one
package.
HOW do you apply/allege BOL as an actionable document? - SC: The bill described the goods as 128 cartons to be
- What is required under RULE 8 is: you allege the substance multiplied with $500, not 2 containers only to be
of the actionable document and attach a copy of the considered as packages.
document to your pleading. o In this case, the SC did not consider the 2
containers as 2 packages, hence only 128 cartons
WHAT is the effect if you do not allege sufficiently as what is and not 130
required? Does RULE 8 apply?
- The RULE is silent. While there is an implication of not Q&A: Would it be that the container would be considered as a
specifically denying under oath that will result to package if it is provided by the shipper but if the containers were
admission, there is nothing under RULE 8 of the effect if provided by the shipping company, it would not count?
there is no sufficient allegation as to actionable document. - CASE is silent on this
- The admission as to genuineness and due execution, if you - One thing also considered by the SC is that they are not
do not deny it specifically under oath, presupposes that sure who provided for the containers.
the allegation is sufficient. - But as a GENERAL RULE: (Present Rule) SC said that if the
merchandise is contained in one container without
RULE 8 says, it can be pleaded as a cause of action or as a defense. In indicating the units found inside the container and without
normal cases in transpo, an actionable document is pleaded in an describing the goods, then one package ONLY.
answer because the common carrier is the one commonly sued and - BUT if one container describing what is inside (boxes,
the common carrier is usually the one who will use the actionable cartons, etc) and also describing the merchandise, then
document. Among other things, there is a stipulation there that will the shipping units would be the number of packages or
be advantageous to the common carrier and that is the limitation of boxes INSIDE the container, should be multiplied by $500.
liability or notice of claim.
Q&A: With regards to the value of $500, is the carrier allowed to
Emphasis on the specific denial under oath of the actionable prove the actual value of the goods per package so we can have a
document in the answer IF you are the lawyer of the PLAINTIFF lower value (let’s say only $250 per package of garments)?
because a REPLY is not mandatory. - Normally, in practice now, those containers going to the
- If you are deemed to admit the due execution, how will warehouse, called LOAD AND COUNT, the shipper is the
you contest what is provided there? one who will load and seal the cargoes inside the
- SIR: Probably lang, although I haven’t encountered it yet, containers. The responsibility would then fall to the
you could probably contest the amount but I think that is shipper, the carrier would then have nothing to do with
stretching too far.
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the value of the goods placed inside by the shipper CHAPTER 5: ACTIONS AND DAMAGES IN CASE OF BREACH
himself.
- Same with the “said-to-weigh” clause in a case, the ORALS:
shipper is the one who knows the weight, the carrier will
 WHAT IS CULPA CONTRACTUAL?
rely on the shipper for this.
- Remember that the $500 is the limit provided for by law, it
Garcia: it is one of the sources of obligation. It is based on contract,
cannot be lowered.
so can be availed if there’s a breach of contract.
SECTION 4(5) OF COGSA: Neither the carrier nor the ship shall in any  HOW IS IT AVAILED IN THE CONTEXT OF TRANSPO?
event be or become liable for any loss or damage to or in connection
with the transportation of goods in an amount exceeding $500 per G: For example, there is an accident. You can sue the CC for breach
package of lawful money of the United States, or in case of goods of contract of carriage.
not shipped in packages, per customary freight unit, or the
equivalent of that sum in other currency, unless the nature and  CAN YOU SPECIFY THE COMMON CARRIER? GIVE DETAILS:
value of such goods have been declared by the shipper before
G: Example, the Ceres company, with a driver. I met an accident. I
shipment and inserted in the bill of lading. This declaration, if
can sue Ceres for breach of contract.
embodied in the bill of lading, shall be prima facie evidence, but
shall not be conclusive on the carrier.
 WHAT ARE THE CIRCUMSTANCES WHY YOU MET THE
ACCIDENT?
By agreement between the carrier, master or agent of the carrier,
and the shipper another maximum amount than that mentioned in G: It collided with another bus.
this paragraph may be fixed: Provided, That such maximum shall not
be less than the figure above named. In no event shall the carrier be  WERE YOU ALONE? WHAT ABOUT THE PRIVATE VEHICLE?
liable for more than the amount of damage actually sustained.
G: I’m with the passengers. The private vehicle is driven by the
Neither the carrier nor the ship shall be responsible in any event for owner only.
loss damage to or in connection with the transportation of the goods
 YOU SAID THAT YOU WERE INJURED BY THE SAID
if the nature or value thereof has been knowingly and fraudulently
ACCIDENT. WHAT ARE THE INJURIES CAUSED?
mis-stated by the shipper in the bill of lading.
G: Example sir, my leg was fractured.

SIR: I mentioned the case of Eastern Shipping. The issue was what
shipping unit shall be used. Whether the 120 cartons as indicated in  WAS THERE DAMAGE IN THE BUS?
the Bill of Lading or the 2 containers. No issue on the conversion of
the money. But I don’t usually handle COGSA cases because they G: Yes Sir
usually go to manila.
 SO, YOU SAID YOU CAN SUE THE CC. WHO WILL YOU SUE?
With regards to reduction of liability under COGSA, I haven’t read a
case involving that. G: The Ceres bus.
NOTE: LACKING CASES

 DOES THE CERES BUS HAVE A LEGAL ENTITY?
- Lorenzo Shipping vs. Chubb and Sons
- Saludo vs. CA G: Yes, it has a juridical entity. As registered by SEC.
- Belgian Overseas vs. Phil First
- Asian Terminals vs. Simon Enterprises  HOW WILL YOU KNOW THAT IT IS THE CERES COMPANY
THAT YOU WILL SUE? HOW WILL YOU GET THE DATA?
WERE YOU ISSUED A TICKET? WAS THE NAME OF THE
CERES COMPANY PLACED?
G: YES sir.
 SO WHICH WILL YOU RELY, THE NAME ON THE TICKET OR

THE NAME IN THE SEC?
40
G: I will choose what’s stated in the ticket. G: I got injured, I was hospitalized, I was forced to hire the services of
Physical Therapist. I was forced to pay the hospital bills. I was not
 WILL YOU INCLUDE THE INCORPORATORS AS STATED IN able to work.
THE SEC?
 ASIDE FROM ACTUAL, IS THERE ANY KIND OF DAMAGE
G: No sir because the Corporation has a separate Entity from their YOU WILL ASK?
incorporators.
G: I will ask exemplary damages to set up an example to the public
 WHO ELSE WILL YOU SUE?
 GARCIA MENTIONED ABOUT IMPLEADING THE DRIVER OF
G: the Driver THE CERES BUS, WILL YOU ALSO IMPLEAD THE DRIVER IN
THAT CIVIL CASE FOR DAMAGES?
 WHAT IS THE SUIT WILL YOU FILE?
Querubin: It depends as to what the cause of your action is. If the
G: Civil Case for damages sir. I will implead Ceres and Driver. And
cause of your action is culpa contractual, then there is no need for
also the private vehicle. I will also file a criminal case under Art 100
you to implead the driver of the bus since ... (interrupted ni sir)
of RPC but it will be separate.
 WILL YOU IMPLEAD?
 SO, ONLY THOSE 3 IN THE CIVIL CASE?
Querubin: I will not implead the driver of the Ceres bus because the
G: Yes sir.
cause of my action is culpa contractual. In that case, the one who is
liable is the operator or the owner of the bus company and even if I
 IN THE CRIMINAL CASE, WHO WILL YOU INCLUDE?
will implead the driver, the driver is not liable, only the bus owner.
G: The Driver of the Ceres bus sir. I’ll also include the driver of the
 ISN’T IT THAT THE DRIVER CAN ALSO BE HELD LIABLE
private vehicle.
UNDER A DIFFERENT SOURCE OF OBLIGATION?
 WHY WILL YOU IMPLEAD THE DRIVER OF THE CERES BUS?
Q: Yes, under culpa aquiliana (quasi-delict).
G: Because he contributed to the injury.
 BASED ON THE EXAMPLE, WHO ARE THE PERSONS YOU
 ARE YOU SAYING THAT THE DRIVER IS NEGLIGENT? ARE GOING TO SUE?
G: Yes sir, he can be negligent. Q: The persons I am going to sue is: first, the bus owner/company;
second: driver. If there is a third person, then I’m also gonna include
 WHAT WILL YOU ALLEGE IN YOUR COMPLAINT IN that third person.
RELATION TO THE CERES BUS?
 WHY WILL YOU INCLUDE THE DRIVER WHEN HE IS NOT A
G: I will allege that I was a passenger as evidenced by the ticket. PARTY TO THE CONTRACT OF TRANSPORTATION?
There was a perfected contract. That the bus was not able to
complete its obligation. Q: He is still liable for quasi-delict.
 HOW ABOUT THE INJURIES SUSTAINED?  WHAT ABOUT THE OWNER OR THE DRIVER OF THE
PRIVATE VEHICLE? WHY WILL YOU BRING HIM IN?
G: Yes, I will include that I was injured, particularly the fracture. Then
I will ask for damages. Q: He is also liable for quasi-delict.
 WHAT DAMAGES?  WHAT IS YOUR CAUSE OF ACTION FOR THE CERES BUS
COMPANY AND THE DRIVERS?
G: Actual damages particularly by reason by the of the injury I
sustained from the accident. Q: Culpa contractual under the Contract of Carriage for the company
and culpa aquiliana for the driver of the bus and the private vehicle.
 HOW WAS THAT PARTICULARIZED?
 WHAT WILL YOU PROVE IN COURT TO HOLD BOTH THE
COMPANY AND THE DRIVERS LIABLE?
40
Q: With regards to the carrier, I would have to prove that failure to  IN THAT CAUSE OF ACTION AGAINST THE COMMON
exercise extraordinary diligence and failure to send the passenger to CARRIER BASED ON CONTRACT, YOU HAVE SEVERAL
his destination. I would have to prove that there is an existing DEFENSES RIGHT? EXTRAORDINARY DILIGENCE, ETC., IS IT
contract and there is damage, injury. With regards to the third ALRIGHT TO INVOKE INCONSISTENT DEFENSES IN ONE
person, I would have to prove that there is a injury to the passenger ANSWER?
and also that there is damage and gross negligence.
Q: I think so.
 SO, THERE IS DIFFERENCE BETWEEN THE TWO INSOFAR AS
NEGLIGENCE IS CONCERNED? YOU CAN ALSO SUE THE  HOW CAN YOU RECOVER ACTUAL DAMAGES?
COMMON CARRIER BASED ON NEGLIGENCE?
Veloso: By showing the receipts that I took from the medical exams
Q: No, negligence is only one of the elements. for the damage I sustained during the accident.
 CAN YOU ALSO SUE THE COMMON CARRIER BASED ON  IS RECEIPT ALONE THE ONLY PROOF?
QUASI-DELICT AND NOT ON CULPA CONTRACTUAL?
V: If due to the injury, I was absent and I was deprived of my income
Q: Yes. during that day, then I can also use that to claim actual damages.
 CAN YOU ALLEGE THIS SEVERAL CAUSES OF ACTION EVEN  HOW WILL YOU PROVE THAT IN COURT?
IF THEY CONFLICT WITH EACH OTHER IN ONE COMPLAINT?
V: I can use the time-card as evidence that I was really absent due to
WHY?
my injury. Testimonies of the doctors will prove that I really did
Q: Yes because you can implead any causes of action for as long as... sustain injuries.
That legal concept is called joinder of causes of action.
 WHY WILL YOU PRESENT DOCTORS? CAN THE DOCTORS
 IF THE DEFENSE OF THE COMMON CARRIER IS DILIGENCE TESTIFY ON THE AMOUNT THAT YOU PAID FOR THE
IN THE SELECTION OF THE EMPLOYEE, DRIVER, IS THE EXPENSE?
DEFENSE PROPER?
V: Yes. Pertaining to the bill, you can go to the cashier of the hospital
Q: No, the defense is not proper because the driver is not privy to the to show.
contract, there is no privity of the contract.
 IF YOU WERE GIVEN A BILL BY THE HOSPITAL, IS THE BILL
 WHAT WAS YOUR CAUSES OF ACTION AGAINST THE SUFFICIENT? BILL OR RECEIPT?
COMMON CARRIER?
V: Receipt, after you pay.
Q: Culpa contractual. I can also sue for quasi-delict.
 WHAT ABOUT THE PROFESSIONAL FEES YOU PAID THE
 IF THE DEFENSE OF THE COMMON CARRIER IS DILIGENCE DOCTOR WHERE YOU WERE NOT ISSUED A RECEIPT? CAN
TO THE SELECTION AND ENGAGEMENT, IS IT PROPER? YOU RECOVER IT? WHAT IS YOUR PROOF?
Q: With regards to quasi-delict, they can invoke it but with regards V: My testimony is insufficient to claim actual damages because in
to culpa contractual, then no. actual damages, you need sufficient documents to prove that you
sustained injuries.
 IF YOU WERE THE LAWYER OF THE COMMON CARRIER,
WILL YOU INVOKE THAT DEFENSE?  ENLIGHTEN US ON THIS NET EARNING CAPACITY
Q: Yes, I can invoke as many defenses as I can. Aguilar: Net earning capacity is used to determine actual damage.
Let’s say the person was injured or died during the course of his
 IF YOU WILL NOT INVOKE THAT DEFENSE, THAT WHAT IS travel. So the net earning capacity will be used to determine.
YOUR DEFENSE IN RELATION TO THE QUASI-DELICT CAUSE
OF ACTION AGAINST THE COMMON CARRIER?  IS A PERSON STILL LIVING ENTITLED TO LOSS OF EARNING
CAPACITY?
Q: I think it is better to invoke.
A: Yes. If the injury that he sustains permanently disables him.
40
 WHAT IS THE FORMULA? Article 1903 (last paragraph) – 2 things are apparent:
A: Life expectancy multiplied with the difference of the gross annual 1. That when an injury is caused by the negligence of a
income and the necessary expenses incurred by the person. servant or employee there instantly arises a presumption
of law that there was negligence on the part of the master
 WHAT IS THE FORMULA FOR LIFE EXPECTANCY? or the employer either in the selection of the servant or
employee, or in supervision over him after the selection,
A: 2/3 X 80 – age of death or both
2. That presumption is juris tantum and not juris et de jure,
and consequently may be rebutted
 IF THERE ARE NO RECEIPTS TO SUBSTANTIATE THE
EXPENSES, WHAT IS THE RULE? WHAT IS THE POLICY OF
THE SC? Note however: that Article 1903 of the Civil Code is not applicable to
acts of negligence which constitute the breach of contract. It is
A: Generally, the damages will not be awarded for those are not
applicable only to culpa contractual
substantiated by documentary evidence. The policy of the SC, the
living expenses will be 50% of the net annual income
 IF ACTUAL DAMAGES THAT WERE PRAYED BY PLAINTIFF  The fundamental distinction between obligation of extra-
OR THE HEIRS OF PLAINTIFF WHO DIED CANNOT BE contractual and those which arise from contract, rests upon
SUBSTANTIATED, ARE THE HEIRS STILL ENTITLED TO the fact that in cases of non-contractual obligation it is the
RECOVER DAMAGES? AND IF SO, WHAT ARE THOSE wrongful or negligent act or omission itself which creates the
DAMAGES? vinculum juris, whereas in contractual relations the vinculum
exists independently of the breach of the voluntary duty
A: The heirs can recover moral damages. assumed by the parties when entering into the contractual
relation.
 IN THE CONTEXT OF TRANSPORTATION, HOW CAN THE
HEIRS RECOVER MORAL DAMAGES?
CONCURRENT CAUSES OF ACTION
A: The heirs can recover moral damages because of the grief.
- There is one action but several causes of action
- The same act that breaches the contract may also be
 IS IT AUTOMATIC?
tort
A: If it is death, the moral damages are usually automatic.

Note: the cause of action of a passenger or shipper against the
Not mine but ako lang i.apas ang discussions ni sir… tnx)
common carrier can be culpa contractual or culpa aquiliana while
Chapter 5 the basis of liability on the part of the driver is either culpa delictual
or culpa aquiliana. The driver of the carrier is not liable based on
Actions and Damages in Case of Breach contract because there is NO PRIVITY of contract between him and
the passenger or shipper.
 Cause of action of a passenger and shipper:

a) against common carrier – based on culpa contractual or culpa If the negligence of third persons concurs with the breach, the
aquiliana liability of the third person who was driving the vehicle and/or his
employer may be based on quasi delict. The driver alone may be
b) on the part of the driver – based on either culpa delictual or held criminally liable and civil liability may be imposed upon him
culpa aquiliana based on delict. In the latter case, the employer is subsidiarily liable.
Note: the source of obligation based on culpa contractual is separate Remember: it does not make any difference that the liability of one
and distinct from quasi-delict springs from the contract while that of the other arises from quasi-
delict. If the owner and driver of the other vehicle is not impleaded,
the carrier may implead them by filing a third party complaint.
40
thereof has generally been upheld as such stipulation merely

affects the shipper’s remedy and does not affect the liability
 Solidary liability of the carrier.
- In case the negligence of the carrier’s driver and a third
person concurs, the liability of the parties – carrier and his
driver, third person – is joint and several. b) Extinctive Prescription
- six (6) years if there is no written contract (bill of

NOTICE OF CLAIM AND PRESCRIPTIVE PERIOD lading)
- ten (10) years if there is written contract
A. Overland Transportation of Goods and Coastwise Shipping  This rule likewise applies to carriage of passengers for
domestic transportation.
a) When to file a claim with carrier
- Art. 366 constitutes a condition precedent to the B. International Carriage of Goods by Sea
accrual of a right of action against a carrier for
damage caused to the merchandise.  A claim must be filed with the carrier within the following
period:
1. if the damage is apparent the claim should be filed
 Under Art. 366 of the Code of Commerce, an action for immediately upon discharge of the goods; or
damages is barred if the goods arrived in damaged condition 2. within 3 days from delivery if damage is not apparent
and no claim is filed by the shipper within the following
period:
1. Immediately if damage is apparent;  Filing of claim is not condition precedent. Thus, regardless of
2. within twenty four (24) hours from delivery if damage whether the notice of loss or damage has been given, the
is not apparent shipper can still bring an action to recover said loss or
damage within one year after the delivery of the goods or the
date when the goods should have ben delivered
- The period does not begin to run until the consignee has
received possession of the merchandise that he may
exercise over it the ordinary control pertinent to a) Prescription
ownership.
- This provision applies even to transportation by sea within  Action for damages must be filed within a period of one (1)
the Phils. or coastwise shipping. year from discharge of the goods.
- Does NOT apply to misdelivery of goods  The period is not suspended by an extra-judicial demand.
(why? Transportation of goods by sea should be decided in as
short a time as possible)
Q: Why does it not apply to misdelivery of goods? o Case: Dole Philippines Inc. vs. Maritime Company
of the Philippines - the prescriptive period is not
A: In such cases (misdelivery), there can be no question of claim for tolled or interrupted by a written extra-judicial
damages suffered by the goods while in transport, since the claim demand. Article 1155 is NOT applicable.
for damages arises exclusively out of the failure to make delivery.  The period does not apply to conversion or misdelivery.
 The one (1) year period refers to loss of goods and not to
misdelivery.
Case: Monica Roldan vs. Lim Ponzo and Co.

- Damages arising from delay or late delivery are not the
damage or loss contemplated under the COGSA. The
- Article 366 of the Commercial Code is limited to cases of
goods are not actually lost or damaged. The applicable
claims for damage to goods actually turned over by the
period is ten (10) years.
carrier and received by the consignee.
- Case: Domingo Ang vs. American Steamship Agencies
 What is to be resolved – in order to determine
the applicability of the prescriptive period of one
 But the period prescribed in Art. 366 may be subject to
year – is whether or not there was loss of the
modification by agreement of the parties.
goods subject matter of the complaint.
 The validity of a contractual limitation of time for filing the
suit itself against a carrier shorter than the statutory period
40
 Loss contemplates merely a situation where no B. Kinds of Damages

delivery at all was made by the shipper of the
goods because the same had perished, gone out Article 2216 provides that no proof of pecuniary loss is necessary in
of commerce, or disappeared in such a way that order that moral, nominal, temperate, liquidated or exemplary
their existence is unknown or they cannot be damages, may be adjudicated. The assessment of such damages,
recovered. (note: it is not loss due to misdelivery
except liquidated ones, is left to the discretion of the court,
or delivery to the wrong person)
according to the circumstances of each case. However, proof of
pecuniary loss is necessary if actual or compensatory damages is
 This rule applies in collision cases. The one (1) year period being claimed.
starts not from the date of the collision but when the goods
should have been delivered, had the cargoes been saved.
a) Actual or Compensatory Damages

Case: Maritime Agencies and Services Inc. vs. CA
- only for the pecuniary loss suffered by him as he has duly
- When there is two destination of delivery , the one year proved
period should commence when the last item was delivered - not only the value of the loss suffered, but also that of the
to the consignee profits which the oblige failed to obtain
- 2 Kinds:
1. the loss of what a person already possesses (daňo
Insurance emrgente);
2. the failure to receive as a benefit that would have
 The insurer who is exercising its right of subrogation is also pertained to him (lucro cesante).
bound by the one (1) year prescriptive period. - It should be proven: cannot be decided based on the
 However, it does not apply to the claim against the insurer consideration of the judge; not to be based on the
for the insurance proceeds. The claim against the insurer is perception, observation and consideration of the judge
based on contract that expires in ten (10) years. - With respect to restorative medical procedure: to be
entitled to actual damage, you need to have an EXPERT
TESTIMONY. Without such, you cannot recover.
II. Recoverable Damages
 Damages – is the pecuniary compensation, recompense or  Damages may be recovered: Art. 2205 (Civil Code)
satisfaction for an injury sustained, or as otherwise 1) For loss or impairment of earning capacity in cases of temporary
expressed, the pecuniary consequences which the law or permanent personal injury;
imposes for the breach of some duty or violation of some
rights. 2) For injury to the plaintiff’s business standing or commercial
credit.
A. Extent of Recovery (Contractual Breach: Art. 220, NCC)
 Carrier in good faith – is liable only to pay for the damages  Damages cannot be presumed. The burden of proof rests on
that are the natural and probable consequences of the the plaintiff who is claiming actual damages against the
breach of the obligation and which the parties have carrier.
foreseen or could have reasonably foreseen at the time
the obligation was constituted.
 Carrier in bad faith or guilty of gross negligence – liable for  In case of goods – the plaintiff is entitled to their value at the
all damages, whether the same can be foreseen or not. time of destruction. The award is the sum of money which
Those which may be reasonably attributed to the non- plaintiff would have to pay in the market for identical or
performance of the obligation. essentially similar goods
 For personal injury and even death – the claimant is entitled
to all medical expenses as well as other reasonable expenses
Note: The carrier who may be compelled to pay has the right of that he incurred to treat his or her relative’s injuries.
recourse against the employee who committed the negligent, willful  In case of death – the plaintiff is entitled to the amount that
or fraudulent act. he spent during the wake and funeral of the deceased. But,
expenses after the burial are not compensable.
 Read Art. 2206 (Civil Code):
40
 death caused by a crime or quasi-delict  12% - for final judgment

shall be at least P3,000; [The amount of fixed
damages is now P50,000.00]
 the defendant shall be liable for the Note: no interest, however, shall be adjudged on unliquidated claims
loss of the earning capacity of the deceased; or damages except when or until the demand can be established
 If deceased is obliged to give support, with reasonably certainty, the interest shall begin to run form the
recipient may demand support from the person
time the claim is made judicially or extrajudicially.
causing the death for a period not exceeding five
years
 Spouse, legitimate and illegitimate
descendant and descendants may demand moral
damages for mental anguish by reason of the b) Moral Damages
death of the deceased
- Includes physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral
1) Loss of earning capacity shock, social humiliation and similar injury.
- Though incapable of pecuniary computation, moral damages
may be recovered if they were the proximate result of the
defendant’s wrongful act or omission.
- Moral damages are not awarded to punish the defendant but
Net Earning Capacity = Life Expectancy x [Gross Annual Income
to compensate the victim
less Necessary Living Expenses] - May be recovered when there is death or there is malice or bad
faith. (in transportation of passengers)
- Refer to Art. 2219 and 2220 (enumerates cases when moral
damages may be awarded)
 Life expectancy – (2/3 x 80 – age at death) - Generally, no moral damages may be awarded where the
 Net earnings – based on the gross income of the victim breach of contract is not malicious.
minus the necessary incidental living expenses which the - Moral damages may be awarded if the contractual negligence is
victim would have incurred if he were alive. considered gross negligence.
 Amount of living expenses must be established. In the - Subject to three conditions in transportation law:
absence of proof, it is fixed at fifty (50%) of the gross income. o Death
o Malice or bad faith (must be done in the
performance of the contract of carriage)
 Rules on loss of earning applies when the breach of the o Physical Injuries
carrier resulted in the plaintiff’s permanent incapacity.
2) Attorney’s fees
c) Nominal Damages
- refer to Art. 2208 of the Civil Code
- attorney’s fees may be awarded in an action for breach - Refer to Art. 2221-2223 (Civil Code)
of contract of carriage under par. 1,2,4,5,10 and 11 of - It is adjudicated in order that the right of plaintiff may be
Art. 2208. vindicated or recognized, and not for the purpose of
- If awarded exemplary, one is entitled to attorney’s fees indemnifying the plaintiff for any loss suffered by him
- 2 kinds: ordinary (compensation to the lawyer); - The assessment of nominal damages is left to the discretion of
extraordinary (indemnity as a form of damages suffered the court according to the circumstances of the case
due to the breach of contract) - The award of nominal damages is also justified in the absence
- You can be awarded if you show that you were forced to of competent proof of the specific amounts of actual damages
litigate and when you are entitled to exemplary damage suffered.
- But this award is subject to the discretion of the court - Cannot co-exist with actual damages
(you cannot dictate – usually 10%-15%) - There is no loss in nominal damages, unlike in actual and
temperate damages, loss is present which is proven and not
proven but rather ascertained by the court, respectively.
3) Interests
 12% per annum – if it constitutes a loan or forbearance of Case: Japan Airlines vs. CA
money
 6% per annum – if it does not constitute loan or
forbearance of money
40
- The award of moral damages was justified because JAL Case: Air France vs. Rafael Carrascoso and CA
failed to make necessary arrangement to transport the
plaintiffs on the first available connecting flight to Manila. - The inference of bad faith is there; it may be drawn from
- Only Nominal damages were awarded in the absence of the facts and circumstances set forth therein. The contract
proof of actual damages was averred to establish the relation between the parties.
- Deficiency in the complaint in stating that there was bad
faith, if any, was cured y the evidence.
d) Temperate or Moderate Damages
- More than nominal but less than compensatory damages Case: Philippine Airlines inc. vs. CA
- Art. 2224 provides:
 may be recovered when the court finds that some pecuniary - Moral damages are recoverable in a breach of contract of
loss has been suffered but its amount can not, from the carriage where the air carrier thought its agents acted
nature of the case, be provided with certainty. fraudulently or in bad faith.
- cannot co-exist with actual damages - The contract of air carriage generates a relation attended
- Definite proof of pecuniary loss cannot be offered, although the with a public duty. Neglect or malfeasance of the carrier’s
court is convinced that there has been such loss. employees naturally could give ground for an action for
damages.
e) Liquidated Damages
- Those agreed by the parties to a contract, to be paid in

case of breach thereof.
- Ordinarily, the court cannot change the amount of
liquidated damages agreed upon by the parties. However,
Art. 2227 of the Civil Code provides that liquidated
damages, whether intended as an indemnity or a penalty,
shall be equitable reduced if they were iniquitous or
unconscionable.
f) Exemplary or Corrective Damages
- Requisites for the award of exemplary damages:

1. They may be imposed by way of example in addition to
compensatory damages, and only after the claimant’s right
to them has been established.
2. They cannot be recovered as a matter of right, their
determination depending upon the amount of
compensatory damages that may be awarded to the
claimant.
3. The act must be accompanied by bad faith or done in
wanton, fraudulent, oppressive or malevolent manner.
Note: if gross negligence warrants the award of exemplary damages,

with more reason is its imposition justified when the act performed
is deliberate, malicious and tainted with bad faith. The rationale
behind exemplary or corrective damage is to provide an example or
correction fro public good.
 The award of exemplary damages in breach of contract of

carriage is subject to the provisions under Art. 2232-2235 of
the Civil Code.
40

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TRANSPORTATION LAW 2013-2014 *405* TLD-HYC

4. Bill of Lading (BL): Asoque: Shipper, Common Carrier and Consignee

 Character of BL  WHY IS CONSIGNEE PARTY TO A CONTRACT?

Alo: Common and Private  WHAT IF IT IS BY MEANS OF A “PIPELINE”? (First Philippine

Burdeos: The carrier is no longer liable.

*CAUTION: while we know the prevailing doctrine, it is possible that

CONSIGNEE BEING A PARTY WHAT IF: pana.ugon ka? That is a VIOLATION.

What would be your example of the first?

requirement of clearances that is in relation or a manifestation  There is stipulation

Diligence to what? To forestall or lessen the loss. So you have to

Now as to time, we have to distinguish if:

To whom delivery must be made?  Another Article 1738,

In the case of Dangwa Transportation. Kudiamat, he C: Unforeseeable, even foreseen, inevitable

December 12, 2014

J: The exercise of extraordinary diligence. DEFENSES

 Goods: It can be stipulated as long as the three (3)

RA 6235: AN ACT PROHIBITING CERTAIN ACTS INIMICAL TO CIVIL

 IS THERE ANY RELEVANCE BETWEEN THE SIGNING OF THE

Veloso: Common carriers are bound to exercise extraordinary

 WHAT ARE THE OTHER TWO ELEMENTS OF A CONTRACT?

Veloso: Consideration and Object/Cause? In BOL, consideration is

passenger and the carrier.

Gaviola: I would argue in the same ground that this is a contract of

BILL OF LADING AND OTHER FORMALITIES

TWO-FOLD CHARACTER OF BOL VALIDITY OF STIPULATIONS

Art. 1745. Any of the following or similar stipulations shall be

Zzzz..... (1) ARTICLE 1748: An agreement limiting the common carrier’s

*SWEETLINES HOW TO APPLY PAROL EVIDENCE RULE INSOFAR AS BOL IS

- The common carrier, who may be benefited all the time on

G: Example sir, my leg was fractured.

NOTE: LACKING CASES

 SO WHICH WILL YOU RELY, THE NAME ON THE TICKET OR

A: If it is death, the moral damages are usually automatic.

 Cause of action of a passenger and shipper:

thereof has generally been upheld as such stipulation merely

- six (6) years if there is no written contract (bill of

Case: Monica Roldan vs. Lim Ponzo and Co.

 Loss contemplates merely a situation where no B. Kinds of Damages

a) Actual or Compensatory Damages

A. Extent of Recovery (Contractual Breach: Art. 220, NCC)

 death caused by a crime or quasi-delict  12% - for final judgment

- Those agreed by the parties to a contract, to be paid in

f) Exemplary or Corrective Damages

- Requisites for the award of exemplary damages:

Note: if gross negligence warrants the award of exemplary damages,

 The award of exemplary damages in breach of contract of

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TRANSPORTATION LAW 2013-2014 405 TLD-HYC