MERC Transpo
MERC Transpo
MERC Transpo
PRELIMINARIES
LAWS GOVERNING CONTRACTS OF TRANSPORTATION
CONTRACT PRIMARY LAW SUPPLETORY LAW
LAND TRANSPORTATION
Common carriers New Civil Code Code of Commerce
Private carriers (commerce) Code of Commerce
Property New Civil Code (deposit) New Civil Code
Private carriers (non-commerce)
Passengers New Civil Code (contracts)
AIR TRANSPORTATION
Philippines as destination New Civil Code Code of Commerce
Philippines as one of the itineraries Treaties, international agreements, Montreal Convention New Civil Code
WATER TRANSPORTATION
Coastwise Code of Commerce
New Civil Code
Foreign port to Philippine port Code of Commerce
Philippine port to foreign port Law of the country of destination and COGSA
TRANSPORTATION
It is the movement of persons or things from one place to another, and is 2.1 Section 11, Article XII- National Economy and Patrimony provides
immaterial whether the carrying be over land, water or air. It includes waiting that the grant of any franchise or any form of authorization to operate a public
time, loading or unloading, stopping in transit, and all other accessorial utility is limited to Filipinos or Filipino corporations owned at least 60% by
services in connection with the loaded movement.1 Filipinos. The participation of foreigners in the equity and the governing body is
thus limited to 40% but it is required that all executive and managing officers
CONTRACT OF TRANSPORTATION must be Filipino. Note the ruling in the case of Gamboa v. Teves providing for
A contract of transportation is one whereby a certain person or association the determination of Filipino nationality.
of persons obligate themselves to transport persons, things, or news from one
to another for a fixed price.2
2.2 The Constitution does not prohibit the mere formation of a public
utility corporation without the required proportion of Filipino capital. What is
PARTIES TO A CONTRACT OF TRANSPORTATION
prohibited is the grant of a franchise or other form of authorization for the
1 SHIPPER operation of a public utility to a corporation already in existence but without the
one who agrees to deliver the things or news to be transported, or to present requisite proportion of Filipino capital.7
his own person or those of other or others in the case of transportation of
passengers 2.3 The Constitution does not require a franchise before one can own the
2 CARRIER facilities needed to operate a public utility as long as it does not operate them to
one who binds himself to transport persons, things, or news, as the case may serve the public. The ownership per se of the facilities of a public utility does not
be, or one employed in or engaged in the business of carrying goods for constitute the owner thereof as a public utility. It is the use thereof to serve the
others for hire public that will constitute it as a public utility.8
Carriers are persons or corporations who undertake to transport or convey
goods, property, or persons, from one place to another, gratuitously or for
hire, and are classified as private or special carriers, who transport or OWNERSHIP AND OPERATION
undertake to transport in a particular instance for hire or reward and common OPERATION OWNERSHIP
or public carriers. a relation in law by virtue of which a use as an incident of ownership is
3 CONSIGNEE thing pertaining to one person is limited by law when it is to be
party to whom the carrier is to deliver the things being transported, or to completely subject to his will in operated and used to serve the public
whom the carrier may lawfully make delivery in accordance with its contract everything not prohibited by law as a public utility10
of carriage or the concurrence with the rights of
The shipper and the consignee may be the same person. another9
The right to operate may exist independently and separately from ownership of the
facilities. A person can thus own the facility but not operate it as a utility or may operate
a public utility without owning the facilities, like in the lease of airplanes or vessels.
LAWS ON TRANSPORTATION THAT HAVE APPLICATION IN THE
PHILIPPINES
FORMATION OF PUBLIC UTILITY CORPORATION NOT
1. Whether transportation is by land, sea or air, the primary law are TANTAMOUNT TO OPERATION OF PUBLIC UTILITY
Articles 1732 to 1766 of the New Civil Code. The secondary laws, particularly The mere formation of a public utility corporation does not ipso facto
as to the rights and obligations of a common carrier are the Code of Commerce characterize it as one that is operating a public utility. The moment of
and/or special laws. determination of Filipino nationality is when it applies for a franchise to
operate a public utility.
1.1 The specific aspects that will be discussed are: (a) Public Utilities as
covered by the Public Service Act 3 (b) Common Carriers as covered by the Civil MANDATORY CONDITION FOR GRANT
Code4 (c) Commercial Contracts for Transportation Overland 5 (d) Maritime This grant is always subject to the condition that it may be amended, altered
Commerce6 or repealed when the common good so requires as Section 17, provides that in
times of national emergencies, when public interest requires and under
2. Both the primary and secondary laws however are subject to the reasonable terms, it may temporarily take over the operation of a privately
Constitution as the supreme law. owned public utility or business affected with public interest.
1
87 C.J.S. Transportation
2
Crisostomo v CA, G.R. No. 138334 (2003)
3
Commerce Act No. 146, as amended by the Warsaw Convention of 1929 as to carrier liability
4 7
Articles 1732-1766 People vs. Quasha, 93 Phil 333
5 8
Articles 349-379, Code of Commerce Iloilo Ice and Cold Storage vs. Public Service Board, 44 Phil 551
6 9
Articles 673-736, Article 580-584, Code of Commerce as superseded by RA 6106, Articles 806-845, Code of Tolentino II, Commentaries and Jurisprudence on the Civil Code of the Philippines
10
Commerce, Carriage of Goods by Sea Act, Commerce Act No. 65 Tatad vs. Garcia, 243 SCRA 436
1
REMEDIAL LAW
2.7 Under Section 18,11 if in the interest of national welfare or defense, shuttle bus and proceeded to the ramp of the aircraft and baggage already loaded
upon payment of just compensation, there may be a transfer to public to the aircraft.
ownership of utilities and other private enterprises.
* Public Utility Bus or Jeepneys or Street Cars – once it stops it is in effect
2.8 Under Section 19,12 the state may regulate or prohibit monopolies making a continuous offer to riders; perfected when passenger is already
when the public interest requires and no combination in restraint of trade or attempting to board the vehicle
unfair competition shall be allowed.13
* TRAINS – perfected when a person:
CONTRACT OF TRANSPORTATION a. purchased a ticket/ possess sufficient fare with which to pay for his passage
It is a contract whereby a person obligates himself to transport persons or b. presented himself at the proper place and in a proper manner to be transported
property from one place to another for a consideration. c. has a bona fide intention to use facilities of the carrier
CONTRACTS OF TRANSPORTATION 2.
CONTRACT PASSENGERS GOODS
To carry agreement to carry the Shipper – the person who delivers the goods to the carrier for transportation;
passenger at some future date pays the consideration or on whose behalf payment is made
consensual contract; perfected
by mere consent Consignee – person to whom the goods are to be delivered. May be the shipper
himself or a third person who is not actually a party to the contract
Of carriage
real contract; perfected by Perfection:
actual use > contract to carry goods – consensual
> contract of carriage - act of delivery of goods ( goods are unconditionally
placed in the possession and control of the carrier and upon their receipt by the
carrier for transportation)
1 CARRIAGE OF PASSENGERS
Parties: common carrier and passenger
2 CARRIAGE OF GOODS
Parties: shipper and carrier
1.
PASSENGER
A passenger is one who travels in a public conveyance by virtue of
contract, express or implied, with the carrier as to the payment of fare or that
which is accepted as an equivalent thereof.
Perfection:
>
–not until the facilities of the carrier are actually used can the carrier be said to
have assumed the obligation of the carrier;.
11
Article XII, National Economy and Patrimony, 1987 Constitution
12
Article XII, National Economy and Patrimony, 1987 Constitution
13
NPC vs. Court of Appeals, GR No. 112702, September 26, 1977
2
EVIDENCE
o Art. 1732 also carefully avoids making any distinction between a person or
CHAPTER I COMMON CARRIERS enterprise offering transportation service on a regular or scheduled basis and
one offering such service on an occasional, episodic or unscheduled basis.17
COMMON CARRIERS
o Art. 1732 does not distinguish between a carrier offering its services to the
A common carrier is a person, corporation, firm or association engaged
general public and one who offers services or solicits its business only from a
in the business of carrying or transporting passengers or goods or both, by
narrow segment of the general population.18
land, water, or air, for compensation, offering its services to the public.14
One is a common carrier even if he has no fixed and publicly known route, maintains no o A person or entity is a common carrier and has the obligations of the common
terminals and issues no tickets. carrier under the Civil Code even if he did not secure a Certificate of Public
Convenience.19
PRIVATE CARRIER o The Civil Code makes no distinction as to the means of transporting, as long
A private carrier is one who, without being engaged in the business of as it is by land, water or air.20
carrying goods for hire as a public employment, undertakes to transport goods o The Civil Code does not provide that the transportation should be by motor
or passengers either gratuitously or for compensation. vehicle.21
A carrier which does not qualify under the requisites of a common carrier is deemed a o A person or entity may be a common carrier even if he has no fixed and
private carrier.15 publicly known route, maintains no terminals, and issues no tickets.22
o A person or entity need not be engaged in the business of public transportation
COMMON CARRIERS AND PRIVATE CARRIERS for the provisions of the Civil Code on common carriers to apply to them.23
COMMON CARRIER PRIVATE CARRIER o The carrier can also be a common carrier even if the operator does not own
As to clientele the vehicle or vessel that he or she operates.24
A person who offers his services to carry passengers or goods for a fee is a common carrier,
holds itself out to all persons who agrees in some special case with
regardless of whether he has a certificate of public convenience or not, whether it is his
choose to employ it as ready to some individual to carry for hire main business or is incidental to such business, whether it is scheduled or unscheduled
carry for hire service, and whether he offers his services to the general public or to a limited few.25
As to whether it may refuse to enter into a contract of carriage
bound to carry for all who offer not bound to carry for any reason, CERTIFICATE OF PUBLIC CONVENIENCE
such goods as he is accustomed to unless bound by a contract A common carrier is required to obtain a certificate of public
carry and tender reasonable convenience.26 However, the absence thereof does not mean that it is not a
compensation for carrying them common carrier nor is it required to incur liability as a common carrier.
As to required degree of diligence The liability arises upon acting as a common carrier.
extraordinary diligence ordinary diligence (diligence of a To exempt it from the liabilities because it has not obtained the necessary certificate of
good father of a family) public convenience is offensive to sound public policy; it would reward such carrier
As to presumption of negligence precisely for failing to comply with the applicable statutory requirements.27
presumed to have been at fault or no presumption of negligence
to have acted negligently if the CHARTER PARTY
goods are lost, destroyed or It is a contract by virtue of which the owner or agent of a vessel leases the
deteriorated or in case of death of or entire ship or some principal part thereof to another person for a specified
injuries to passengers period of time or use.
As to regulation It is a common carrier if the charter party is a contract for affreightment. However, it is
considered a private carrier if the contract is bareboat or demise charter.
subject to regulation not subject to regulation
As to exemption from liability for negligence of employees
cannot stipulate that it is exempt may validly enter into a stipulation
BAREBOAT OR DEMISE CHARTER
from liability for the negligence of exempting it from liability A bareboat or demise charter is one whereby the charterer becomes owner
its agents or employees pro hac vice of the vessel. He mans the vessel with his own people and
becomes, in effect, the owner of the vessel for the voyage or service
stipulated. The whole vessel is leased to the charterer transferring to him its
TESTS TO DETERMINE WHETHER ONE IS A COMMON CARRIER entire command and possession and consequent control over its navigation,
(1) It must be engaged in the business of carrying goods for others as a including the master and crew who are his servants.
public employment, and must hold itself out as ready to engage in the
transportation of goods or persons generally as a business and not as a
CHARTER BY AFFREIGHTMENT
casual occupation.
(2) It must undertake to carry goods of the kind to which its business is It is one whereby the owner of the vessel leases part or all of its space to
confined. haul goods for others. It is a contract for special service to be rendered by the
(3) It must undertake to carry by the method by which its business is owner of the vessel. Under such contract, the shipowner retains the possession,
conducted and over its established routes. command, and navigation of the ship, the charterer or freighter merely having
(4) The transportation must be for hire or compensation. use of the space in the vessel in return for his payment of the charter hire.
The true test for a common carrier is not the quantity or extent of the business actually
transacted, or the number and character of the conveyances used in the activity , but PIPELINE OPERATOR
whether the undertaking is a part of the activity engaged in by the carrier that he has A pipeline operator who carries oil and other petroleum products through
held out to the general public as his business or occupation. The question must be pipes/pipelines is deemed a common carrier. The law does not distinguish as to
determined by the character of the business actually carried on by the carrier, not by
the means by which transportation is carried out, as long as it is by land,
any secret intention or mental reservation it may entertain or assert when charged with
the duties and obligations that the law imposes. water, or air. Neither does the law require that transportation be through a
The fact that one has a limited clientele does not exclude it from the definition of a motor vehicle.28
common carrier.
3
REMEDIAL LAW
CUSTOMS BROKER arrival of the goods and has been
A customs broker may be regarded as a common carrier. As long as a given a reasonable opportunity
person holds itself to the public for the purpose of transporting goods as a thereafter to remove them or
business, it is already considered a common carrier regardless if it owns the otherwise dispose of them
vehicle used or has to hire one.29 The requirement to observe extraordinary diligence begins with the actual delivery of the
goods for transportation, and not merely with the formal execution of a receipt or bill
of lading; the issuance of a bill of lading is not necessary to complete delivery and
TRAVEL AGENCY acceptance by the carrier.32
A travel agency is not a common carrier. It is not an entity engaged in the
business of transporting either passengers or goods and is therefore neither a REQUISITE FOR PERFECTION OF CONTRACT OF TRANSPORT OF
private nor a common carrier. Its covenant with its customers is simply to make
travel arrangements on their behalf.30
PASSENGERS
Such person must have a bona fide intention to use the facilities of the
carrier, possess sufficient fare with which to pay for his passage, and present
himself to the carrier for transportation in the place and manner provided. If he
does not do so, he will not be considered a passenger and the carrier does not
DILIGENCE REQUIRED OF COMMON CARRIERS owe him extraordinary diligence.
4
EVIDENCE
Shipper of the
goods damaged
Third person Tort (extra-
who suffered contractual
damages negligence)
If the driver is convicted and it turns out that he is insolvent, the heirs/
passengers may run after the employer of the driver, pursuant to the employer’s
subsidiary liability under Article 103, in relation to Arts. 100 and 102, RPC.
Against the carrier and driver operating the other vehicle at fault
Tort
Against the common carrier at fault
Culpa Contractual;
Direct and primary
The liability of the common carrier and his driver as well as the operator of the
other vehicle and his driver is joint and several (J. Dimaampao, citing Tiu v.
Arriesgado, G.R. No. 138060, September 1, 2004).
Q: Fil-Asia Air Flight 9I6 was on a scheduled passenger flight from Manila
when it crashed as it landed at the Cagayan de Oro airport. The pilot
miscalculated the plane's approach and undershot the runway. Ten passengers
died at the crash scene.
One of them managed to leave the plane but was run over by an ambulance
coming to the rescue. Another was an airline employee who hitched a free ride to
Cagayan de Oro and who was not in the passenger manifest.
The Civil Aeronautics Authority investigation showed that the co-pilot who had
control of the plane's landing had less than the required flying and landing time
experience, and should not have been in control of the plane at the time. He was
allowed to fly as a co-pilot because of the scarcity of pilots - Philippine pilots
have been recruited by foreign airlines under vastly improved flying terms and
wages so that newer and less trained pilots are being locally deployed. The main
pilot, on the other hand, had a very high level of blood alcohol at the time of the
crash.
You are part of the team that the victims hired to handle the case for them as a
group. In your case conference, the following questions came up:
a. Explain the causes of action legally possible under the given facts against the
airline and the pilots; whom will you specifically implead in these causes of
action?
b. How will you handle the cases of the passenger run over by the ambulance and
the airline employee allowed to hitch a free ride to Cagayan de Oro? (2013 Bar)
A:
a. A complaint for breach of contract of carriage can be filed against Fil-Asia Air
for failure to exercise extraordinary diligence in transporting the passengers
safely from their point of embarkation to their destination (Art. 1755, NCC).
A complaint based on a quasi-delict can be filed against the pilots because of
their fault and negligence (Art. 2176, NCC). Fil-Asia Air can be included for
negligence in the selection and supervision of the pilots (Art. 2180, NCC).
A third cause of action may be a criminal prosecution for the reckless
imprudence resulting in homicide against two pilots. The airline will be
subsidiary liable for the civil liability, only after the pilots are convicted and
found to be insolvent.
b. It is the driver of the ambulance and his employer who should be held liable
for damages because a passenger was run over. This is in accordance with
Articles 2176 and 2180 of the Civil Code. There could also be a criminal
prosecution for reckless imprudence resulting in homicide against the ambulance
driver and his consequent civil liability.
Since the airline employee was being transported gratuitously, Fil-Asia Air was
not required to exercise extraordinary diligence for his safety and only ordinary
care (Lara v. Valencia, G.R. No. L-9907, June 30, 1958).
5
REMEDIAL LAW
CASES
The test to determine whether negligence attended the performance of an
obligation is: did the defendant in doing the alleged negligent act use that
reasonable care and caution which an ordinarily prudent person would have used
in the same situation? If not, then he is guilty of negligence.34
PRESUMPTION
When an injury is caused by the negligence of an employee there instantly
arises a presumption of the law that there was negligence on the part of the
employer either in the selection of his employee or in the supervision
over him after such selection.
DEFENSE
The presumption, however, may be rebutted by a clear showing on the part of
the employer that it had exercised the care and diligence of a good father of a
family in the selection and supervision of his employee. Hence, to escape
solidary liability for quasi-delict committed by an employee, the employer
must adduce sufficient proof that it exercised such degree of care.35
Contributory negligence may not be ascribed to the bus driver; it was evident
that he had taken the necessary precautions before passing over the railway track.
A railroad is not required to have a gate (crossing bar) or a flagman, or to
maintain signals at every intersection; only at such places reasonably
necessary; what is considered reasonably necessary will depend on the amount
of travel upon the road, the frequency with which trains pass over it and the
view which could be obtained of trains as they approach the crossing, and other
conditions.36
Contributory negligence
The omissions of care on the part of the van driver constituted negligence,
which, according to Layugan v. Intermediate Appellate Court, is "the omission to
do something which a reasonable man, guided by those considerations which
ordinarily regulate the conduct of human affairs, would do, or the doing of
something which a prudent and reasonable man would not do.37
34
Crisostomo v. CA
35
Travel & Tours Advisers, Inc. v. Cruz
36
PNR v. Baliwag Transit, Inc.
37
Sps. Pereña v. Sps. Zarate
6
EVIDENCE
LIABILITIES OF COMMON CARRIERS during and after its occurrence; and (c) the common carrier is not guilty of
delay in transporting the goods.
Fire is not a natural disaster or calamity unless cause by lightning or some other natural
OBLIGATION OF COMMON CARRIERS disaster.
The obligation of the common carrier consists in the transportation of
passengers or goods or both.
ACT OF PUBLIC ENEMY IN WAR
Regardless of whether the object are goods or passengers, a common
This presupposes the existence of an actual state of war and refers to
carrier must observe EXTRAORDINARY DILIGENCE. The failure to exercise
the government of a foreign nation at war with the country to which the
the required degree of diligence is a breach of the contract of carriage. carrier belongs, or civil, when parties in rebellion occupy and hold in a hostile
manner a certain portion of the territory, when they have declared independence
PRINCIPLES GOVERNING THE LIABILITY OF COMMON CARRIERS and have in the field a regularly organized force in armed hostility.
The liability of a carrier is contractual and arises upon breach of its REQUISITES
obligation. There is breach if it fails to exert extraordinary diligence 1 such must be the proximate and only cause
according to all circumstances of each case.
2 due diligence was exercised to prevent or minimize the loss, before,
A carrier is obliged to carry its passenger with the utmost diligence of a very during and after the act of the public enemy
cautious person, having due regard for all the circumstances. Pirates on the high seas stand as an exception as they are considered as enemies of all
A carrier is presumed to be at fault or to have acted negligently in case of civilized nations, and their depredations on a common carrier will excuse him from liability.
death of, or injury to, passengers, it being its duty to prove that it exercised
extraordinary diligence. ACT OR OMISSION OF THE SHIPPER OR OWNER OF THE GOODS
The carrier is not an insurer against all risks of travel. For it to apply, such must be the proximate and only cause. If the shipper or
owner merely contributed to the loss, destruction or deterioration, the
proximate cause being the negligence of the common carrier, it shall still be
RATIONALE BEHIND VEHICLE REGISTRATION liable for damages but it shall be equitably reduced. An example would be a
The main purpose of vehicle registration is to identify the owner so that if an
accident happens, or if any damage or injury is caused by the vehicle in the CHARACTER OF THE GOODS OR DEFECTS IN THE PACKAGING OR IN
public highways, THE CONTAINERS
REQUISITES
REGISTERED OWNER RULE 1 must be the proximate and only cause
The person who is the registered owner of a vehicle is liable for any 2
damage caused by the negligent operation of the vehicle although the same
was already sold.38 For it to apply, such. The common carrier must have protested if visible
and still exercise due diligence to forestall or lessen the loss. If the carrier
accepts despite the condition, it is not relieved of liability for loss or injury.
7
REMEDIAL LAW
shall be equitably be reduced. Hence, the only effect of such is to mitigate the
liability. Q: Peter hailed a taxicab owned and operated by Jimmy Cheng and driven by
Hermie Cortez. On the way to Malate, the taxicab collided with a passenger
jeepney, as a result of which Peter’s left leg was fractured. Peter sued Jimmy for
damages, based on contract of carriage, and Peter won. Jimmy wanted to
PRESUMPTION OF NEGLIGENCE IN THE TRANSPORTATION OF challenge the decision before the SC on the ground that the trial court erred in
PASSENGERS not making an express finding as to whether or not Jimmy was responsible for
GR: In case of death of or injuries to passengers, common carriers are the collision and, hence, civilly liable to Peter. He went to see you for advice.
presumed to have been at fault or to have acted negligently. What will you tell him? Explain (1990 Bar).
XPN: However, such presumption may be refuted by proving observance of A: I will advise Jimmy to desist from challenging the decision. The action of
extraordinary diligence. Peter being based on culpa contractual, the carrier’s negligence is presumed upon
the breach of contract. The burden of proof instead would lie on Jimmy to
establish that despite an exercise of utmost diligence, the collision could not have
been avoided.
PRESUMPTION OF NEGLIGENCE
CARRIAGE OF GOODS CARRIAGE OF PASSENGERS PRESUMPTION OF NEGLIGENCE
proof of delivery of goods in good death or injury , the law imposes liability upon common carriers, as long as it shown that:
order to a carrier and arrival at the (Con-LoDID)
place of destination in bad order
While delay in the delivery of goods is a Mere failure to reach one’s destination,
breach of contract of carriage, it does not without injury or death, does not raise
raise the presumption of negligence the presumption of negligence because it
because the goods are not lost, does not involve safety of the passengers. REQUISITES FOR PRESUMPTION OF NEGLIGENCE TO APPLY
deteriorated, or destroyed. 1 There exists a contract between the passenger or the shipper and the
common carrier.
EFFECTS OF PRESUMPTION 2 The loss, deterioration, injury or death took place during the existence
The presumption of negligence makes out a prima facie case against the of the contract.41
carrier and makes it incumbent upon the carrier to prove that the loss, death, The court need not make an express finding of fault or negligence of common
or injury was due to some other circumstance inconsistent with its liability, or carriers.
that it observed extraordinary diligence.39
Common carriers are liable for injuries of passengers even if the carriers
observed ordinary diligence and care because the obligation imposed upon them EFFECT OF ACQUITTAL
by law is to exercise extraordinary diligence. Common carriers are bound to The acquittal of the employee of the common carrier in the criminal case is
carry the passengers safely as far as human care and foresight can provide, immaterial to the case for breach of contract.42
using the utmost diligence of very cautious persons with a due regard for all
the circumstances. CARRIER ACTING AS AGENT OF ANOTHER CARRIER
A carrier acting as an agent of another carrier is also liable for its own
1.1 While there is no expressed definition, it should mean greater than negligent acts or omission in the performance of its duties. The principal carrier
ordinary diligence as may be required by the nature of the obligation and the may also file a third-party complaint against the agent carrier for the purpose of
circumstances of persons, time and place. determining who was primarily at fault between them.43
1.2 The requirement is such because of the nature of the business and by
reason of public policy.
8
EVIDENCE
2. The principal consequence of the classification is to
require both to secure a certificate of public convenience from the LTFRB.
For this purpose, they must be considered under the law as a Filipino citizen.
9
REMEDIAL LAW
PRESUMPTION OF NEGLIGENCE
GENERAL RULE
The common carrier is PRESUMED to have been at fault or to have
acted negligently when the goods transported are lost, destroyed, or
deteriorated.44
EXCEPTIONS
Common carriers are not liable when such loss, destruction, or
deterioration is due to any of the following causes only:
C natural disaster or CALAMITY (flood, storm, earthquake,
lightning) which is the proximate cause of the loss
W act of the public enemy in WAR, whether international or civil
A ACT or omission of the shipper or owner of the goods
C CHARACTER of the goods or defects in the packing or container
O ORDER or act of competent public authority
X exercise of EXTRAORDINARY DILIGENCE
In all cases other than those enumerated above, there is presumption of negligence even
if there is an agreement limiting the liability of the common carrier in the vigilance over the
goods.
The carrier must have exercised due diligence to forestall or prevent the loss.
If the fact of improper packing is known to the carrier or its servants, or
apparent upon ordinary observation, but it accepts the goods notwithstanding
such condition, it is not relieved from responsibility for loss or injury
resulting therefrom.45
44
Art. 1735, NCC
45
Southern Lines Inc., v. CA, GR No. L-16629, January 31, 1962
46
Ganzon v. CA, GR No. L-48757, May 30, 1988
10
EVIDENCE
EXEMPTING CAUSES Force majeure – in general, has also been invoked as an exempting cause based
on Art. 1174, which states that no person shall be responsible for a fortuitous
NATURAL DISASTER OR CALAMITY event which could not be foreseen, or which, though foreseen, was inevitable.
1 The natural disaster was the proximate and only cause. A fortuitous event has the following characteristics:
a. The cause of the unforeseen and unexpected occurrence, or the failure of the
2 The carrier exercised due diligence to prevent or minimize loss before,
debtor to comply with his obligations, must be independent of human will;
during, and after the occurrence of the natural disaster.
b. It must be impossible to foresee the event which constitutes the caso fortuito,
3 The common carrier has not negligently incurred delay in transporting
or if it can be foreseen, it must be impossible to avoid;
the goods.
c. The occurrence must be such as to render it impossible for the debtor to fulfill
his obligation in a normal manner; and d. The obligor must be free from any
FIRE NOT A NATURAL DISASTER participation in the aggravation of the injury resulting to the creditor.
Fire may not be considered a natural disaster or calamity because it arises A common carrier may not be absolved from liability in case of force majeure or
almost invariably from some act of man or by human means. It does not fall fortuitous event alone. The common carrier must still prove:
within the category of an act of God unless caused by lightning or by other (i) That it was not negligent in causing the death or injury resulting from an
natural disaster or calamity.47 accident; [Yobido v. CA, G.R. No. 113003 (1997)]
(ii) That the loss or destruction of the merchandise was due to accident and force
ACT OF PUBLIC ENEMY majeure and not fraud, fault, or negligence on the part of the captain or owner of
1 The act of the public enemy was committed either in an international or the ship [Tan Chiong Sian v. Inchausti, G.R. No. L-6092 (1912)].
civil war.
2 The act of the public enemy must have been the proximate and only a. Requirement of Absence of Negligence
cause. If the common carrier is found to have acted negligently, it is precluded from
3 The carrier exercised due diligence to prevent or minimize loss before, invoking the exempting causes under Art. 1734, and will be liable for damages
during, and after the act of the public enemy suffered by the goods it carried if such damages arise from its negligence
[Agbayani].
NOT PUBLIC ENEMIES The exempting circumstance should be the proximate and only cause of the loss,
Thieves, rioters, robbers, and insurrectionists, though at war with social destruction, or deterioration of the goods for the common carrier to be exempted
order, are not in a legal sense classed as public enemies, but are merely private from liability on any of the ff. grounds:
depredators for whose acts a carrier is answerable. Pirates on the high seas, 1. Natural Disaster/Calamity
however, stand as an exception to this rule. They are considered the enemies of 2. Act of Public Enemy
all civilized nations, and indeed of the human race, and consequently their 3. Character of the Goods [Art. 1739, 1742,
depredations on a common carrier will excuse him from liability. NCC]
When the common carrier’s negligence is the proximate cause of the loss,
ACT OR OMISSION OF SHIPPER OR OWNER destruction, or deterioration of the goods, the act or omission of the shipper will
The act or omission of the shipper must have been the proximate and only only mitigate the carrier’s liability [Art. 1741, NCC].
cause of the loss, destruction, or deterioration of the goods. If the shipper or b. Absence of Delay
owner merely contributed to the loss, destruction or deterioration of the goods, In order to be free from responsibility on the ground of natural disaster/calamity,
the proximate cause being the negligence of the common carrier, the latter shall the common carrier should not have negligently incurred in delay [Art. 1740,
be liable for the damages, which shall, however, be equitably reduced. NCC].
A shipper who delivers the goods to the carrier during a storm is not guilty of negligence so
as to excuse the carrier which consents to receive them from liability for loss sustained as a c. Due Diligence to prevent or lessen the loss
result of the storm. The common carrier should have exercised due diligence to prevent, forestall or
e.g., misdirection of the shipment by the shipper, or interference by the shipper with the lessen the loss, destruction, or deterioration of the goods, in order to be exempted
goods after acceptance from liability on any of the ff. grounds:
a. Natural Disaster/Calamity
b. Act of Public Enemy
c. Character of the Goods [Art. 1739,
1742, NCC]
Meeting a typhoon head-on falls short of due diligence required from a common
CHARACTER OF THE GOODS carrier [Asia Lighterage and Shipping Inc. v CA, G.R. No. 147246 (2000)].
Requisites
a. The loss, destruction, or deterioration of the goods is due to the character of
the goods or defects in the packing or in the containers [Art. 1734 (4), NCC]; and
b. The common carrier must exercise due diligence to forestall or lessen the loss
[Art. 1742, NCC].
If the fact of improper packing is known to the carrier or its servants or apparent
upon ordinary observation, but it accepts the goods notwithstanding such REQUIREMENT OF ABSENCE OF NEGLIGENCE
condition, it is not relieved of liability for loss or injury resulting therefrom REQUISITES OF A FORTUITOUS EVENT
[Southern Lines v. CA, G.R. No. L- 16629 (1962)]. Fortuitous events (flood, storm, earthquake, lightning, or other natural
ORDER OF COMPETENT AUTHORITY disaster or calamity) if the following conditions are present:
Requisites 1 The common carrier must be FREE from any participation in or
a. There must be an order or act of competent public authority through which the aggravation of the injury to the creditor.
goods are seized or destroyed [Art. 1734 (5),
2 The event must be such as to render it IMPOSSIBLE for the common
NCC]; and
b. The said public authority must have had the power to issue the order [Art. carrier to fulfill his obligation in a normal manner.
1743, NCC]. 3 The event must be UNFORESEEN or UNAVOIDABLE.
To be exempted from liability, the intervention of the competent public authority 4 The cause of the breach of obligation must be INDEPENDENT of the
must be of a character that would render impossible the fulfillment by the carrier will of the common carrier.48
of the obligation [Ganzon v. CA, G.R. No. L-48757 (1988)].
Force majeure
47 48
Eastern Shipping Lines v. IAC Real v. Belo, G.R. No. 146224, January 26, 2007
11
REMEDIAL LAW
NON-FORTUITOUS EVENTS The common carrier is not liable for the value of the undelivered merchandise which was
lost because of an event that is beyond his control.
o Mechanical defects in the carrier are not considered a caso fortuito that
exempts the carrier from responsibility.49
o Tire blowout of a jeep is not a fortuitous event where there exists a specific HIJACKING
act of negligence by the carrier consisting of the fact that the jeepney was Hijacking, not being included in the provisions of Article 1734, must be
overloaded and speeding at the time of the incident.50 dealt with under the provisions of Article 1735 and thus, the common carrier is
o Defective brakes cannot be considered fortuitous in character.51 presumed to have been at fault or negligent. To exculpate the carrier from
liability arising from hijacking, he must prove that the robbers or the hijackers
acted with grave or irresistible threat, violence, or force.59
FIRE NOT CONSIDERED A NATURAL DISASTER
GR: Fire arises almost invariably from some act of man or by human ARMED ROBBERY
means. It does not fall within the category of an act of God.
When an airline company was not authorized to search passengers for
XPN: if the fire is caused by lightning or by other natural disaster or
firearms, the loss of the jewelry and cash of a passenger because of an armed
calamity52
If the goods have already been deposited in the warehouse of the Bureau of Customs and the robbery committed by other passengers is a force majeure, for which the airline
goods were then destroyed by fire, the carrier is not anymore liable.53 company is not liable.60
51
Juntilla v. Fontanar, GR No. L-45637, May 31, 1985 (b) Excusable delay in carriage merely suspends and generally does not
Vergara v. CA, G.R. No. 77679, September 30, 1987
52
terminate the contract of carriage.
Eastern Shipping Lines v. IAC, G.R. No. L-69044, May 29, 1987
53
Servando v. Philippine Steam Navigation, G.R. No. L-36481-2, October 23, 1982
54 59
PhilAm Gen. v. MGG Marine Services, Inc., G.R. No. 135645, March 8, 2002 Bascos v. CA, G.R. No. 101089, April 7, 1993
55 60
PhilAm Gen. v. PKS Shipping Company, G.R. 149038, April 9, 2003 Quisumbing v. CA, G.R. No L-50076, September 14, 1990
56 61
Arada v. CA, G.R. No. 98243, July 1, 1992 People v. Suzuki, G.R. No. 120670, October 23, 2003
57 62
Eastern Shipping Lines v. CA, G.R. No. 97412, July 12, 1994 Saludo, Jr. v. CA, G.R. No. 95536, March 23, 1992
58 63
The Philippine American General Insurance Co., Inc. v. MCG Marine Services, Inc. and Gaerland, G.R. No. Art. 1747, NCC
64
135645, March 28, 2005 Art. 1748, NCC
12
EVIDENCE
(c) The carrier shall be made liable when the vessel or vehicle is
unreasonably delayed.
(d) The carrier remains duty-bound to exercise extraordinary diligence.
(e) Natural disaster shall not free the carrier from responsibility.
However, where the delay in the transportation of the remains of a deceased person was due
to the fault of the mortuary service, who erroneously switched the casket with that of
another deceased person, the airline company cannot be held liable for damages because
of the delay.
Although the delivery of the suitcase of a passenger was delayed by eleven days, an airline
company cannot be held liable for moral damages, exemplary damages, and attorney’s
fees, where the airline company was not guilty of bad faith and exerted efforts in tracing
the suitcase.65
65
Philippine Air Lines v. Miano, G.R. No. 106664, March 8, 1995
66
Southern Lines, Inc. v. CA, 4 SCRA 259
13
REMEDIAL LAW
CONTRIBUTORY NEGLIGENCE CONTRIBUTORY NEGLIGENCE ON THE PART OF THE SHIPPER
If the shipper or owner merely contributed to the loss, destruction, or
Contributory negligence is conduct on the part of the injured party, deterioration of the goods, the proximate cause thereof being the negligence of
contributing as a legal cause to the harm he has suffered, which falls below the common carrier, the latter shall be liable for damages, which however,
the standard to which he is required to conform for his own protection. shall be equitably reduced.67
Q: Nelson owned and controlled the Sonnel Construction Company. Acting for
the company, Nelson contracted the construction of a building. Without first
installing a protective net atop the sidewalks adjoining the construction site, the
company proceeded with the construction work. One day, a heavy piece of
lumber fell from the building. It smashed a taxicab which at that time had gone
off-road and onto the sidewalk in order to avoid the traffic. The taxicab
passengers died as a result.
a. If you were the counsel for Sonnel Construction, how would you defend your
client? What would be your theory?
b. Could the heirs hold the taxicab owner and driver liable? Explain. (2008 Bar)
A:
a. I shall raise the affirmative defense of contributory negligence. The proximate
cause of death is the violation of the taxi driver of traffic rules and regulations
when it drove off-road to avoid heavy traffic. The lumber that fell from the
building was only the immediatecause ofdeath of the victims. Further, Sonnel
Construction, exercised due diligence in the selection and supervision of its
employees.
b. YES. Both taxicab owner and driver may be held liable based on breach of
contract of carriage and negligence in the selection and supervision of employees
for quasi-delict. The driver can be held criminally liable for reckless imprudence
resulting to homicide and for damages under quasi-delict as provided in Article
2180— an employer may be held solidarily liable for the negligent act of his
employee. Hence, in this case, the taxicab owner is exempted from liability while
the taxi cab driver is liable solely and personally for criminal prosecution.
Q: A and his classmates took a bus from UP to Quiapo. On the way, another
Quiapo-bound bus tries to overtake them. A and his classmates dared the bus
driver to run faster and race with the other bus. The driver takes their dare, to the
delight of A and his friends who cheered him. On rounding the curve, the bus
driver fails to slow down and the bus turns turtle, resulting in the death of A and
injuries to the other passengers.
The bus carried the following sign: “Do not talk to driver while bus is on motion,
otherwise the company will not assume liability for any accident.”
Explain briefly the extent of the liability, if any, of the bus company, giving the
legal provisions and principles involved. (1983 Bar)
A: The bus company is liable for damages to A’s heirs and to all the injured
passengers. Under the Civil Code, a common carrier is duty bound to exercise
extraordinary diligence in carrying its passengers through the negligence or
willful acts of its employees even if the latter have acted beyond the scope of
their authority or in violation of their orders. This liability cannot be eliminated
or limited by stipulation or by posting notices. Although it may be argued that A
was guilty of contributory negligence, such an argument loses its force in the
face of the driver’s recklessness in taking the dare. And even if such argument
would be accepted, at most it can only mitigate the amount of damages, since the
proximate cause of the accident was the driver’s willful and reckless act in
running a race with the other bus.
67
Art. 1741, NCC
14
EVIDENCE
DURATION OF LIABILITY liability of the common carrier continues to be
operative even during the time the goods are
INSTANCES WHEN CARRIER HAS RESPONSIBILITY TO EXERCISE stored in a warehouse of the carrier at the place
of destination, until the consignee has:
EXTRAORDINARY DILIGENCE
1. Been advised of the arrival of the goods;
a. From the time the goods are and
unconditionally placed in the possession 2. Had reasonable opportunity thereafter to
of, and received by the carrier or its authorized agent, until the same are remove them or otherwise dispose of them.
delivered actually and constructively by the Delivery of the cargo to the customs authorities
carrier to the consignee or to the person is not delivery to the consignee or “to the
who has a right to receive them; person who has a right to receive them” as
b. When goods are temporarily unloaded or contemplated in Art. 1736 because in such
stored in transit, unless the shipper or case the goods are still in the hands of the
owner has made use of the right of government and the owner cannot exercise
stoppage in transitu [Art 1737, NCC]; dominion over them. However, the parties may
c. During storage in a warehouse of the agree to limit the liability of the carrier
carrier at the place of destination, until considering that the goods still have to go
consignee has been advised of the arrival through the inspection of the customs
of the goods and has had reasonable authorities before they are actually turned over
opportunity to remove or dispose them [Art to the consignee. It is unfair that the carrier be
1738, NCC]. made responsible for what may happen during
In dealing with the contract of common carriage the interregnum [Lu Do v. Binamira, G.R. No.
of passengers, for purpose of accuracy, there L-9840 (1957)].
are two (2) aspects of the same, namely: It is settled in maritime law jurisprudence that
(a) Contract ‘to carry (at some future time),’ cargoes while being unloaded generally remain
which contract is consensual and is under the custody of the carrier [Asian
necessarily perfected by mere consent; Terminals, Inc. v. Philam Insurance Co., G.R.
and No. 181163 (2013)].
(b) Contract ‘of carriage’ or ‘of common Temporary Unloading or Storage
carriage,’ which should be considered as a General rule: Extraordinary diligence over the
real contract for not until the carrier is goods remains even when the goods are
actually used can the carrier be said to temporarily unloaded or stored in transit.
have already assumed the obligation of a Exception: The duty to observe such diligence
carrier [Paras, Civil Code Annotated, 11th ceases when shipper or owner makes use of
Ed]. the right of stoppage in transitu [Art 1737,
Note: The distinction is important in NCC].
determining when the common carrier is Stoppage in transitu is the act by which the
required to exercise extraordinary unpaid vendor of goods stops their progress
responsibility. The birth of the contract is not and resumes possession of them
necessarily the birth of the duty to exercise constructively, while they are in the course of
extraordinary responsibility. transit from him to the purchaser and not yet
Delivery of Goods to Common actually delivered to the latter [Agbayani].
Carriers Basis: Under Art. 1530, when the buyer of the
Delivery means unconditionally placing the goods becomes insolvent, the unpaid seller
goods in the possession of the carrier and the who has parted with the possession of the
carrier receiving them for transportation [Art. goods, at any time while they are in transit, may
1736]. resume the possession of the goods as he
Unconditionally placing the goods in the would have had if he had never parted with the
possession of the carrier means the shipper possession.
cannot get them back from the common carrier When the right of stoppage in transitu is
at will. exercised, the common carrier holds the goods
in the capacity of an ordinary bailee or
Thus, the liability of the carrier as common warehouseman upon the theory that the
carrier and its duty of extraordinary diligence exercise of the right of stoppage in transitu
begins with the actual delivery of the goods, terminates the contract of carriage. Hence,
NOT: only ordinary diligence is required
When the common carrier received the [Agbayani].
goods not for transportation but only for
safekeeping; or
When a receipt or bill of lading is executed,
since the issuance of a bill of lading is not The extraordinary responsibility of the common carrier lasts from the time
necessary to complete delivery and
the goods are unconditionally PLACED in the possession of, and received by
acceptance [Compania Maritima v
Insurance Co., G.R. No. L-18965 (1964)]. the carrier for transportation until the same are DELIVERED, actually or
Actual or Constructive Delivery constructively, by the carrier to the consignee, or to the person who has a right
The extraordinary responsibility of the common to receive them.68
carrier ends when, subject to Art. 1738, the
goods are delivered actually or constructively WHEN CARRIER’S RESPONSIBILITY PERSISTS
by the carrier to: (a) when goods are temporarily unloaded or stored in TRANSIT
a. The consignee; or (b) during STORAGE in a warehouse of the carrier at the place of
b. The person who has a right to receive destination
them, such as agents, brokers, and the
like.
Art. 1738 provides that the extraordinary 68
Art. 1736, NCC
15
REMEDIAL LAW
WHEN CARRIER’S RESPONSIBILITY TERMINATES o If the buyer, or his agent in that behalf, obtains delivery of the goods before their
(a) when the goods are temporarily unloaded or stored in transit by reason arrival at the appointed destination;
o If, after the arrival of the goods at the appointed destination, the carrier or other bailee
of the exercise of the shipper or owner of his right of STOPPAGE IN acknowledges to the buyer or his agent that he holds the goods on his behalf and
TRANSITU continues in possession of them as bailee for the buyer or his agent; and it is immaterial
(b) when the consignee has been ADVISED of the arrival of the goods at the that further destination for the goods may have been indicated by the buyer;
o If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his
place of destination and has had reasonable opportunity to remove agent in that behalf.
them or dispose of them from the warehouse of the carrier at the place of
destination
HOW RIGHT OF STOPPAGE IN TRANSITU EXERCISED
(a) by obtaining actual possession of the goods; or
CONTRACT TO CARRY AND CONTRACT OF CARRIAGE
(b) by giving notice of his claim to the carrier or other bailee in whose
In dealing with the contract of common carriage of passengers, for purpose possession the goods are.
of accuracy, there are two (2) aspects of the same, namely: (a) CONTRACT TO Notice may be given either to the person in actual possession of the goods or to
CARRY (at some future time), which contract is consensual and is necessarily his principal. In the latter case, the notice, to be effectual, must be given at
perfected by mere consent; and (b) CONTRACT OF CARRIAGE or of common such time and under such circumstances that the principal, by the exercise
carriage, which should be considered as a real contract for not until the carrier of reasonable diligence, may prevent a delivery to the buyer.73
is actually used can the carrier be said to have already assumed the obligation of
a carrier. CARRIER’S RESPONSIBILITY IN CASE OF TEMPORARY UNLOADING
The distinction is important in determining when the common carrier is required to OR STORAGE
exercise extraordinary responsibility. The birth of the contract is not necessarily the
birth of the duty to exercise extraordinary responsibility.
GR: The common carrier’s duty to observe extraordinary diligence in the
vigilance over the goods remains in full force and effect even when they are
temporarily unloaded or stored in transit.
DELIVERY OF GOODS TO COMMON CARRIER
XPN: when the shipper or owner has made use of the right of STOPPAGE IN
The goods are deemed delivered to the carrier when the goods are ready
for and have been placed in the exclusive possession, custody and control of TRANSITU
the carrier for the purpose of their immediate transportation and the carrier The diligence required is merely ordinary diligence as the carrier no longer holds the
goods as such but in the capacity of an ordinary bailee or warehouseman because there is
has accepted them. When the carrier has thus accepted such delivery, the a change of contract from a contract of carriage to a contract of deposit.
liability of the carrier commences.69
OBLIGATION OF COMMON CARRIER IN STOPPAGE IN TRANSITU
ACTUAL OR CONSTRUCTIVE DELIVERY When notice of stoppage in transitu is given by the seller to the carrier, he
PARTY TO WHOM DELIVERY SHOULD BE MADE must redeliver the goods to, or according to the directions of, the seller. The
It must be delivered, actually or constructively, to the consignee or to the expenses of such delivery must be borne by the seller.74
person who has a right to receive them.70 Delivery of the cargo to the If the seller instructs to deliver it somewhere else, a new contract of carriage is formed and
customs authorities is not delivery to the consignee or to the person who has the carrier must be paid accordingly.
a right to receive them because in such case, the goods are still in the hands of
the Government and the owner cannot exercise dominion over them.
However, the parties may agree to limit the liability of the carrier considering that the
goods still have to go through the inspection of the customs authorities before they are
actually turned over to the consignee. It is a situation where the carrier loses control of the
goods because of a customs regulation and it is unfair that it be made responsible for what
may happen during the interregnum. This stipulation is not contrary to morals or public
policy.71
CONSTRUCTIVE DELIVERY
There is constructive delivery when delivery is effected not by actually
transferring the possession of thing to the vendee (in this case, the other party,
either the carrier or the consignee) but by legal formalities or by symbolic
tradition.
69
Saludo, Jr. v. CA, G.R. No. 95536, March 23, 1992
70
Art.1736, NCC
71 73
Lu Do & Lu Ym Corp. vs. Binamira, G.R. No. L-9840, April 22, 1957 NCC, Art. 1532
72 74
Smith, Bell & Co. Phils. v. Gimenez, G.R. No. L-17617, June 29, 1963 Art. 1532, NCC
16
EVIDENCE
STIPULATIONS LIMITING LIABILITY (1) just and reasonable under the circumstances
(2) fairly and freely agreed upon.
A contract fixing the sum that may be recovered by the owner or shipper
for the loss, destruction, or deterioration of the goods is valid, if it is reasonable The liability of a common carrier may, by contract, be limited to a fixed
and just under the circumstances, and has been fairly and freely agreed upon.75 amount, but the agreement must be in writing and signed by the shipper or
owner of the goods, besides the other requirements of the law.82
A stipulation limiting the carrier’s liability up to a certain amount regardless of the actual
VALID STIPULATIONS THAT A COMMON CARRIER OF GOODS MAY value of such cargo, whether declared by its shipper or otherwise, is violative of the
INDICATE IN A CONTRACT IN ORDER TO ESCAPE LIABILITY requirement of Art. 1750 of the Civil Code, which provides that stipulations limiting liability
(a) a stipulation limiting the liability of the common carrier for the loss, should be fairly and freely agreed upon. A stipulation that denies to the shipper the right to
destruction, or deterioration of the goods to a degree less than declare the actual value of his cargoes and to recover, in case of loss or damage, on the basis
extraordinary diligence but not less than the diligence of a good father of such stipulation is invalid.
of a family
The stipulation must be in writing, signed by the shipper or owner, supported by a
valuable consideration other than the service rendered by the common carrier, and LIMITATION OF LIABILITY IN THE ABSENCE OF DECLARATION OF
must be reasonable, just and not contrary to public policy. GREATER VALUE
(b) an agreement limiting the common carrier's liability for delay on account of
GR: The liability of the common carrier shall not EXCEED the stipulation in
strikes or riots76
(c) a stipulation that the common carrier's liability is limited to the value of a contract of carriage, even if the loss or damage results from the carrier's
the goods appearing in the bill of lading, unless the shipper or owner negligence.83
declares a greater value77 XPN: The common carrier’s liability may be extended beyond the specified
(d) a contract fixing the sum that may be recovered by the owner or shipper amount mentioned if the shipper or owner of the goods DECLARES a greater
for the loss, destruction, or deterioration of the goods78 value and PAYS corresponding freight.84
The stipulation must be just and reasonable under the circumstances and must be The liability of an airline company for lost baggage is limited to the amount stated in the
fairly and freely agreed upon. ticket unless the passenger declared a higher valuation and paid additional fare.85
The agreement limiting liability may be annulled by the shipper or owner if the common The shipper or owner of the goods is bound by the stipulation written in the ticket from
carrier refused to carry the goods, unless the former agreed to the stipulation. the moment he availed the services of the carrier because he consented to the terms and
The contract limiting the common carrier's liability cannot be availed of if the common conditions thereof.86
carrier, without just cause:
o delays the transportation of the goods; or BASIS OF COMPUTING LIABILITY
o changes the stipulated or usual route.79
Even if there is an agreement limiting the liability of the common carrier in the vigilance
But when the goods being shipped are packed in cartons placed in
over the goods, the common carrier is still disputably presumed to have been negligent in containers supplied by the carrier and the number of cartons is disclosed in
case of its loss, destruction or deterioration. the shipping documents, it is the number of cartons and not of the containers
that should be used in computing the liability of the carrier for the loss of the
ANNULMENT OF STIPULATION LIMITING THE COMMON CARRIER’S goods, as it is the cartons that constitute the packages.87
LIABILITY BY THE SHIPPER OR OWNER
A stipulation limiting the common carrier’s liability may be annulled by the
shipper or owner if the common carrier refused to carry the goods unless the
shipper or owner agreed to such stipulation.80
VOID STIPULATIONS
The following or similar stipulations shall be considered unreasonable, unjust
and contrary to public policy:
o that the common carrier need not observe any DILIGENCE in the custody of
the goods
o that the goods are transported at the RISK of the owner or shipper
o that the common carrier’s liability for acts committed by THIEVES, or of
ROBBERS who do not act with grave or irresistible threat, violence or
force, is dispensed with or diminished
o that the common carrier shall exercise a degree of diligence LESS than that
of a good father of a family, or a man of ordinary prudence, in the vigilance
over the movables transported
o that the common carrier will not be LIABLE for any loss, destruction, or
deterioration of the goods
o that the common carrier shall not be responsible for the acts or omissions of
his or its EMPLOYEES
o 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 carriage81
o any similar stipulation that is unreasonable, unjust and contrary to public
policy
75
Art. 1750, NCC
76 82
Art. 1748, NCC Shewaran v. PAL, G.R. No. L-20099, July 7, 1966
77 83
Art. 1749, NCC Eastern and Australian Shipping Co. v. Great American Insurance Co., GR No. L-37604, October 23, 1981
78 84
Art. 1750, NCC Art. 1749, NCC
79 85
Art. 1747, NCC Pan American World Airways, Inc. v. IAC, G.R. No. 70462, August 11, 1988
80 86
Art. 1746, NCC Eastern and Australian Shipping Co., v. Great American Insurance Co., G.R. No. L-37604, October 23, 1981
81 87
Art. 1745, NCC Eastern Shipping Lines, Inc. s. IAC, G.R. No. L-71478, May 29, 1987
17
REMEDIAL LAW
LIABILITY FOR BAGGAGE OF PASSENGERS
BAGGAGE
Baggage is any personal property carried by the passenger, either check-
in or hand-carry.
Baggage are things that a passenger will bring with him consistent with a
temporary absence from where he lives. Passenger’s baggage must have a
direct relationship with the passenger who is traveling.
A balikbayan box or suitcase is passenger’s baggage. However, 10,000 cans of corned beef
are not considered as passenger baggage. They are considered as goods, and are not part
of the contract of carriage of passenger. A separate contract of carriage or bill of lading
must be entered into in order to transport them.
In case of loss owing to the fault of the passenger, the carrier will not be liable.
CHECKED-IN BAGGAGE
If the baggage is in the custody of the common carrier, the latter is
obliged to observe extraordinary diligence and the presumption of negligence
applies in case of loss.
18
EVIDENCE
A common carrier is bound to carry the passengers safely as far as human care STIPULATIONS LIMITING THE LIABILITY OF COMMON CARRIER IN
and foresight can provide, using the utmost diligence of very cautious CASE OF INJURY OR DEATH
persons, with a due regard for all the circumstances (Art. 1755, NCC). GR: The responsibility of a common carrier for the safety of passengers
cannot be dispensed with or lessened by stipulation, by posting of notices, by
statements on tickets, or otherwise.88
Article 1759. Common carriers are liable for the death of or injuries to XPN: When a passenger is carried gratuitously, a stipulation limiting the
passengers through the negligence or wilful acts of the former's employees, common carrier’s liability for negligence is valid.
although such employees may have acted beyond the scope of their authority or The passenger must be carried gratuitously. If it is only a reduction of fare, then any
in violation of the orders of the common carriers. limitation of the common carrier’s liability is not justified.
XPN to the XPN: Notwithstanding the exception, common carriers will be liable
This liability of the common carriers does not cease upon proof that they nevertheless for willful acts or gross negligence.
exercised all the diligence of a good father of a family in the selection and
supervision of their employees.
DURATION OF LIABILITY
Article 1760. The common carrier's responsibility prescribed in the preceding
article cannot be eliminated or limited by stipulation, by the posting of notices, Observance of extraordinary diligence in transportation of passengers
by statements on the tickets or otherwise. commences from the moment the person who purchases the ticket from the
carrier presents himself at the proper place and in a proper manner to be
WHO ARE NOT CONSIDERED PASSENGERS transported, and continues until the passenger has been landed at the port of
1. one who has boarded the WRONG vehicle, has been properly informed of destination and has left the vessel owner’s dock or premises.
such fact, and on alighting, is injured by the carrier
2. invited guests and ACCOMMODATION passengers. WAITING FOR CARRIER OR BOARDING OF CARRIER
3. one who attempts to board a Moving vehicle, although he has a ticket, unless A proper person whom the carrier would be bound to accept who enters
the attempt be with the knowledge and consent of the carrier upon the carrier’s premises such as a station, ticket office, or waiting room, with
4. One who remains on a carrier for an Unreasonable length of time after he has the intention of becoming a passenger, will ordinarily be viewed as assuming
been afforded every safe opportunity to alight. the status of a passenger.89
The carrier is thus NOT obliged to exercise extraordinary diligence but only
ordinary diligence in these instances. TRAINS
Assumption of risk on the part of passengers The carrier is supposed to exercise extraordinary diligence although the
Passengers must take such risks incident to the mode of travel. The passenger passenger is still waiting for a coach on the platform of the train station.90
must observe the diligence of a good father of a family to avoid injury to himself However, there is no obligation on the part of a street railway company to
(Art. 1761, NCC). stop its cars to let on intending passengers at points other than those
Carriers are not insurers of any and all risks to passengers and goods. It merely appointed for stoppage.91
undertakes to perform certain duties to the public as the law imposes, and holds
itself liable for any breach thereof (Pilapil v. CA, G.R. No. 52159, Dec. 22, Q: City Railways, Inc. (CRI) provides train service, for a fee, to commuters from
1989). Manila to Calamba, Laguna. Commuters are required to purchase tickets and
then proceed to designated loading and unloading facilities to board the train.
Q: Wisconsin Transportation Co., Inc. (WTC) owned and operated an inter- Ricardo Santos purchased the ticket for Calamba and entered the station. While
island de luxe bus service plying the Manila-Batangas-Mindoro route. Three waiting, he had an altercation with the security guard of CRI leading to a
friends, namely: Aurelio, Jerome and Florencio rode on the same WTC bus from fistfight. Ricardo Santos fell on the railway just as a train was entering the
Manila bound for Mindoro. Aurelio purchased a ticket for himself. Jerome, being station. Ricardo Santos was run over by the train. He died. CRI contented that
a boyhood friend of the bus driver, was allowed a free ride by agreeing to sit the mishap occurred before Ricardo Santos boarded the train and that it was not
during the trip on a stool placed in the aisle. Florencio, already penniless after guilty of negligence. Decide. (2008 Bar)
spending all of his money on beer the night before, just stole a ride in the bus by A: The contention of CRI must fail. The duty of a common carrier to provide
hiding in the on-board toilet of the bus. safety to its passengers is not only during the course of the trip but for so long as
During the trip, the bus collided with another bus coming from the opposite the passengers are within its premises and where they ought to be in pursuance to
direction. The three friends all suffered serious physical injuries. the contract of carriage. Furthermore, the common carrier will still be liable even
What are WTC's liabilities, if any, in favor of Aurelio, Jerome and Florencio? though its employees acted beyond the scope of their work (LRTA vs. Navidad,
Explain your answer. (2017 Bar) G.R. No. 145804 February 6, 2003).
A: As a common carrier, WTC is liable to Aurelio for breach of contract of Q: P, a sales girl in a flower shop at the Ayala Station of the MRT bought two
carriage, the latter being a passenger who purchased a ticket for himself. WTC is (2) tokens or tickets, one for her ride to work and another for her ride home. She
also liable to Jerome for breach of contract of carriage because he was a got to her flower shop where she usually worked. While P was attending to her
passenger although he was being transported gratuitously. However, WTC has duties at the flower shop, two (2) crews of the MRT got into a fight near the
no liability in favor of Florencio for breach of contract of carriage. A stowaway flower shop, causing injuries to P in the process. Can P sue the MRT for
like Florencio, who secures passage by fraud, is not a passenger. contractual breach as she was within the MRT premises where she would shortly
NOTE: As accommodation passengers or invited guests, defendant as owner and take her ride home? (2011 Bar)
driver of the pick-up owes to them merely the duty to exercise reasonable care so A: NO, P had no intention to board an MRT train coach when the incident
that they may be transported safely to their destination. The rule is established by occurred.
the weight of authority that the owner or operator of an automobile owes the duty Carriage by sea
to an invited guest to exercise reasonable care in its operation, and not The duty of the carrier commences as soon as a person with bona fide intention
unreasonably to expose him to danger and injury by increasing the hazard of of taking passage places himself in the care of the carrier or its employees and is
travel (Articles 1755 and 1756, NCC, Lara v. Valencia, G.R. No. L-9907, June accepted as passenger (Aquino and Hernando, 2016, citing 80 C.J.S. 1085).
30, 1958). Land transportation
The act of the driver in stopping their conveyances is a continuous offer to riders
(continuing offer rule). The passenger is deemed to be accepting the offer if he is
88
Art. 1757, NCC
89
LRTA v. Navidad, G.R. No. 145804, February 6, 2003
90
LRTA v. Navidad, G.R. No. 145804, February 6, 2003
91
De Prado v. Manila Electric Co., G.R. No. 29462, March 7, 1929
19
REMEDIAL LAW
already attempting to board the conveyances and the contract of carriage is NOTE: By express provision of Article 1759, it is no defense that the employee
perfected from that point. acted beyond the scope of his authority because the riding public is not expected
It is the duty of common carriers of passengers, including common carriers by to inquire from time to time before they board the carrier whether or not the
railroad train, streetcar, or motorbus, to stop their conveyances a reasonable driver or any other employee is authorized to drive the vehicle or that said driver
length of time in order to afford passengers an opportunity to board and enter, is acting within the scope of his authority and observing the existing rules and
and they are liable for injuries suffered by boarding passengers resulting from the regulations required of him by management (Aquino and Hernando, 2016).
sudden starting up or jerking of their conveyances while they are doing so
(Dangwa vs. CA, G.R. No. 95582, October 7, 1991). Q:At around 8:45 in the morning, A, after having alighted from a passenger bus
Q: A bus of GL Transit on its way to Davao stopped to enable a passenger to in front of Robinsons Galleria along the north-bound lane of EDSA, was hit and
alight. At that moment, Santiago who had been waiting for a ride, boarded the run over by a bus driven by B, who was then employed by C Transport
bus. However, the bus driver failed to notice Santiago who was still standing on Company. A was immediately rushed to the hospital where she was pronounced
the bus platform, and stepped on the accelerator. Because of the sudden motion, dead on arrival. By reason of the quasi-delict, who should be held liable for the
Santiago slipped and fell down suffering serious injuries. Is GL Transit liable? death of A? B, the bus driver, C Transport Company, or both?
(1996 Bar) A: Both B and C Transport Company should be held solidarily liable as joint
A: YES. Santiago may hold GL Transit liable for breach of contract of carriage. tortfeasors. Under Article 2180 of the New Civil Code, employers are liable for
It was the duty of the driver, when he stopped the bus, to do no act that would the damages caused by their employees acting within the scope of their assigned
have the effect of increasing the peril to a passenger such as Santiago while he tasks. Once negligence on the part of the employee is established, a presumption
was attempting to board the same. When a bus is not in motion there is no instantly arises that the employer was remiss in the selection and/or supervision
necessity for a person who wants to ride the same to signal his intention to board. of the negligent employee. It is incumbent upon the employer to rebut this
A public utility bus, once it stops, is in effect making continuous offer to bus presumption by presenting adequate and convincing proof that it exercised the
riders. It is the duty of common carriers of passengers to stop heir conveyances care and diligence of a good father of a family in the selection and supervision of
while they are doing so. Santiago, by stepping and standing on the platform of its employees. Failing to do this, a common carrier cannot avoid liability for the
the bus is already considered as a passenger and is entitled to all the rights and quasi-delict committed by its negligent employee. The responsibility of two or
protection pertaining to a contract of carriage (Dangwa Trans. Co. v. CA, G.R. more persons who are liable for a quasi-delict is solidary (R Transport
No. 95582, October 7, 1991). Corporation vs. Luisito G. Yu, G.R. No. 174161, February 18, 2015).
When a Public Utility Vehicle is not in motion, it is not necessary for a person NOTE: The carrier, unlike in suits for quasi-delict, may not escape liability by
who wants to ride the same to signal his intention to board proving that it has exercised due diligence in the selection and supervision of its
When the bus is not in motion, there is no necessity for a person who wants to employees (Art. 1759, NCC; see Cangco vs. Manila Railroad Co., supra; Prado
ride the same to signal his intention to board. A public utility bus, once it stops, vs. Manila Electric Co., 51 Phil., 900)
is in effect making a continuous offer to bus riders. Hence, it becomes the duty Liability of the common carrier as regard the acts of employees may not be
of the driver and the conductor, every time the bus stops, to do no act that would limited by stipulation
have the effect of increasing the peril to a passenger while he was attempting to The common carrier’s responsibility cannot be eliminated or limited by
board the same. The premature acceleration of the bus in this case was a breach stipulation, by the posting of notices, by statements on the tickets or otherwise
of such duty. (Art. 1760, NCC).
A person, by stepping and standing on the platform of the bus, is already Rationale: The basis of the carrier's liability for assaults on passengers
considered a passenger and is entitled all the rights and protection pertaining to committed by its drivers rests on the principle that it is the carrier's implied duty
such a contractual relation. Hence, it has been held that the duty which the carrier to transport the passengers safely. As between the carrier and the passenger, the
owes to its patrons extends to persons boarding cars as well as to those alighting former must bear the risk of wrongful acts or negligence of the carrier's
therefrom (Dangwa Trans. Co. v. CA, supra). employees against passengers, since it, and not the passengers, has power to
select and remove them(Maranan vs. Perez, GR No. L-22272, June 26, 1967).
ARRIVAL AT DESTINATION Q: The AAA Bus Company picks up passengers along EDSA. X, the conductor,
Liability for death or injury to passengers upon arrival at destination while on board the bus, drew his gun and randomly shot the passengers inside.
Once created, the relationship will not ordinarily terminate until the passenger As a result, Y, a passenger, was shot and died instantly. Is AAA Bus Company
has, after reaching his destination, safely alighted from the carrier's conveyance liable? (2012 Bar) A: YES. The bus company is liable because common carriers
or had a reasonable opportunity to leave the carrier's premises. All persons who are liable for the negligence or willful act of its employees even though they
remain on the premises a reasonable time after leaving the conveyance are to be acted beyond the scope of their responsibility. NOTE: Willful acts of the
deemed passengers, and what is a reasonable time or a reasonable delay within employees include theft. It should be pointed out that the Code of Commerce
this rule is to be determined from all the circumstances, and includes a expressly provides that the captain shall be civilly liable to the naviero and the
reasonable time to see after his baggage and prepare for his departure (La latter to third persons for all thefts committed by the crew, reserving the right of
Mallorca v. CA, G.R. No. L-21486, May 14, 1966). action against the guilty party (Aquino and Hernando, 2016). OTHER
Carrier-passenger relationship continues until the passenger has been landed at PASSESNGERS AND STRANGERS
the port of destination and has left the vessel-owner’s premises. The victim’s The registered owner of the vehicle may be held liable for damages suffered by a
presence in a vessel after one (1) hour from his disembarkation is not enough in third person in the course of the operation of the vehicle
order to absolve the carrier from liability in his death (Aboitiz Shipping The registered owner of a public service vehicle is responsible for damages that
Corporation v. CA, G.R. No. 84458, November 6, 1989). may arise from consequences incident to its operation or that may be caused to
Q: Robert De Alban and his family rode a bus owned by Joeben Bus Company. any of the passengers therein (Gelisan vs. Alday, G.R. No. L-30212, September
Upon reaching their desired destination, they alighted from the bus but Robert 30, 1987).
returned to get their baggage. However, his youngest daughter followed him Extent of liability of common carriers for acts of co-passengers or strangers
without his knowledge. When he stepped into the bus again, the bus accelerated (1997, 2005 Bar)
that resulting to Robert’s daughter death. The bus ran over her. Is the bus A common carrier is responsible for injuries suffered by a passenger on account
company liable? of the willful acts or negligence of other passengers or of strangers, if the
A: YES. The relation of carrier and passenger does not cease at the moment the carrier’s employees through the exercise of the diligence of a good father of a
passenger alights from the carrier’s vehicle at a place selected by the carrier at family would have prevented or stopped the act or omission (Art. 1763, NCC).
the point of destination, but continues until the passenger has had a reasonable Q: P rode a Sentinel Liner bus going to Baguio from Manila. At a stop-over in
time or reasonable opportunity to leave the current premises (La Mallorca v. CA, Tarlac, the bus driver, the conductor, and the passengers disembarked for lunch.
GR L-20761, July 27 1966). P decided, however, to remain in the bus, the door of which was not locked. At
LIABILITY FOR ACTS OF OTHERS EMPLOYEES this point, V, a vendor, sneaked into the bus and offered P some refreshments.
Common carriers are liable for the acts of their employees When P rudely declined, V attacked him, resulting in P suffering from bruises
Common carriers are liable for the death of or injuries to passengers through the and contusions. Does he have cause to sue Sentinel Liner? (2011 Bar)
negligence or willful acts of the former’s employees, although such employees A: YES, since the carrier's crew did nothing to protect a passenger who remained
may have acted beyond the scope of their authority or in violation of the orders in the bus during the stop-over.
of the common carriers. The liability of the common carriers does not cease upon Transportation Laws
proof that they exercised all the diligence of a good father of a family in the 140
selection and supervision of their employees (NCC, Art. 1759). UNIVERSITYOFSANTOTOMAS
20
EVIDENCE
2019GOLDENNOTES 1. Net Earning Capacity = Life Expectancy x (Gross annual income - Reasonable
Q: In a jeepney, Angela, a passenger, was injured because of the flammable and necessary living expenses).
material brought by Antonette, another passenger. Antonette denied her baggage 2. Life expectancy is determined in accordance with the formula: 2/3 x (80 – age
to be inspected invoking her right to privacy. of deceased at the time of death). (Heirs of Ochoa vs. VS.G & S Transport
a. Should the jeepney operator be held liable for damages? Corporation, G.R. No. 170071, March 09, 2011)
b. If it were an airline company involved, would your answer be the same? (1992 When there is no showing that the living expenses constituted the smaller
Bar) percentage of the gross income, the Court fixes the living expenses at half of the
A: gross income.
a. NO. The operator is not liable for damages. In overland transportation, the Moral damages
common carrier is not bound nor empowered to make an examination on the GR: Moral damages are not recoverable for breach of contract of carriage,
contents of packages or bags, particularly those hand carried by passengers because such contract cannot be considered included in the “analogous cases”
(Nocum vs. Laguna Tayabas Bus Company, G.R. No. L-23733, October 31, used in Article 2219 of the NCC. Also, Art. 2176 of the NCC, which is the
1969). provision on quasi-delict, expressly excludes the cases where there is a “pre-
b. NO. The common carrier should be made liable. In case of air carriers, it is existing contractual relation between the parties” from recovering damages
unlawful to carry flammable materials in passenger aircrafts, and airline (Versoza v. Baytan, et al., G.R. L-14092, April 29, 1960).
companies may open and investigate suspicious packages and cargoes pursuant XPNs: (DeFraG)
to Republic Act No. 6235. 1. Where the mishap results in the Death of the passenger (Art. 1764, NCC); or
Q: Marites, a paying bus passenger, was hit above her left eye by a stone hurled 2. Where it is proved that the common carrier was guilty of Fraud or bad faith,
at the bus by an unidentified bystander as the bus was speeding through the even if death does not result (Art. 2220, NCC).
National Highway. The bus owner’s personnel lost no time in bringing Marites 3. Where the negligence of the carrier is so Gross and reckless as to virtually
to the provincial hospital where she was confined and treated. Marites wants to amount to bad faith (PAL vs. CA et al., GR NO. 123238, Sept. 22, 2008)
sue the bus company for damages and seeks your advice whether she can legally Although the relation of passenger and carrier is "contractual both in origin and
hold the bus company liable. What will you advise her? (1994 Bar) nature" nevertheless, “the act that breaks the contract may be also a tort" when
A: I will advise Marites that she cannot legally hold the bus company liable if the said act is done with gross negligence or with bad faith (Air France v.
stone throwing was entirely unforeseeable and the carrier exercised utmost Carrascoso, G.R. No. L-21438, September 28, 1966).
diligence. However, I will also inform her that the burden is on the carrier to NOTE: The current jurisprudential award for the loss of life of a passenger is
prove such exercise of due diligence. If she decides to file a case in court, all that P100,0000 pesos by way of moral damages (Victory Liner vs. Gammad; supra;
she will prove is that she was a passenger and she was inhured while on board Heirs of Ochoa vs. VS.G & S Transport Corp., supra).
the bus. Q: Judith and Joyce were on board a passenger bus operated by Eduardo. The
Q: A was seated at the first row behind the driver and slept during the ride. When bus was driven at a fast speed by the driver, Rolando, when it crashed into a
the bus reached the Philippine Carabao Center in Muñoz, Nueva Ecija, the bus truck parked on the shoulder of the Kennon Road. As a result, Judith and Joyce
driver, B, stopped the bus and alighted to check the tires. At this point, a man suffered injuries. Eduardo and Rolando paid for their medical and hospitalization
who was seated at the fourth row of the bus stood up, shot A at his head and then expenses. Nonetheless, Judith and Joyce filed a complaint against Eduardo and
left with a companion. The bus conductor, C, notified B of the incident and Rolando for breach of contract of carriage caused by Rolando’s reckless and
thereafter, brought A to the hospital but the latter was pronounced dead on negligent driving. As relief, they prayed for moral and exemplary damages.
arrival. Can the common carrier, B, and C be held liable for the death of A? Eduardo and Rolando refused to pay moral damages on the ground that there was
A: NO. It is imperative for a party claiming against a common carrier to show neither proof nor allegation that they acted fraudulently or in bad faith. Are
that the injury or death of the passenger/s arose from the negligence of the Eduardo and Rolando liable for moral damages?
common carrier and/or its employees in providing safe transport to its A: NO. In an action for breach of contract, moral damages may be recovered
passengers.In this case, A’s death was neither caused by any defect in the means only when a) death of a passenger results; or b) the carrier was guilty of fraud
of transport or in the method of transporting, or the negligent or willful acts of and bad faith even if death does not result. In the case, Judith and Joyce impute
the bus driver or conductor.Instead, the case involves the death of A wholly negligence when the bus collided with another vehicle. While they propounded
caused by the surreptitious act of a co-passenger, who after committing such on negligence, they did not discuss or impute fraud or bad faith, or such gross
crime, hurriedly alighted from the vehicle (G.V. Florida Transport, Inc. vs. Heirs negligence which would amount to bad faith. There being neither allegation nor
of Romeo Battung, Jr., represented by Romeo Battung, Sr.; G.R. No. 208802; proof that respondents acted in fraud or in bad faith in performing their duties
October 14, 2015). arising from their contract of carriage, they are not liable for moral damages.
EXTENT OF LIABILITY FOR DAMAGES Since moral damages cannot be awarded, it follows that the award of exemplary
Kinds of damages that may be recovered in case of death of a passenger (DeLo- damages is also not available, since this kind of damages may only be awarded
MEAtIH) in addition to moral, temperate, liquidated, or compensatory damages (Darnes v.
1. An indemnity for the death of the victim Quiñones, G.R. No. 206468, August 2, 2017, Del Castillo, J.).
2. An indemnity for loss of earning capacity of the deceased Defenses available to a Common Carrer (FECoLD)
3. Moral damages 1. Exercise of extraordinary due diligence
4. Exemplary damages 2. Fortuitous event
NOTE: Carrier is not liable for exemplary damages where there is no proof that 3. Contributory negligence of passengers – it does not bar recovery of damages
it acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. for death or injury if the proximate cause is the negligence of the common carrier
5. Attorney's fees and expenses of litigation but the amount of damages shall be equitably reduced (NCC, Art. 1762).
6. Interest in proper cases (Briñas v. People, G.R. No. L-30309, Nov. 25, 1983) 4. Doctrine of Last Clear Chance
7. Hospital and funeral expenses 5. Due Diligence in the selection and supervision of employees.
NOTE: In case of death, the plaintiff is entitled to the amount he spent during the The diligence of the passenger may be considered in determining liability in case
wake and funeral of the deceased. However, it has been ruled that expenses after of injury
the burial are not compensable (Victory Liner, Inc. v. Heirs of Andres Malecdan, The passenger must observe the diligence of a good father of a family or
G.R. No. 154278). ordinary diligence to avoid injury to himself (NCC, Art. 1761). This means that
Damages in Personal Injury Cases if the proximate cause of the passenger’s injury is his negligence, the common
Personal injury and even death entitles claimant to all medical expenses as well carrier is not liable.
as other reasonable expenses that he incurred to treat his or his relative’s injuries. DOCTRINE OF LAST CLEAR CHANCE
Medical expenses may even include the amount spent for plastic surgery of the Transportation Laws
plaintiff or any procedure to restore the part of the body that was affected (Sps. 142
Ong v. CA, G.R. No. 117103, January 21, 1999). UNIVERSITYOFSANTOTOMAS
Loss of earning capacity 2019GOLDENNOTES
Mercantile Law The doctrine of last clear chance provides that where both parties are negligent
141 but the negligent act of one is appreciably later in point of time than that of the
UNIVERSITYOFSANTOTOMAS other, or where it is impossible to determine whose fault or negligence brought
F A C U L T Y O F C I V I L LAW about the occurrence of the incident, the one who had the last clear opportunity
The formula for the computation of unearned income is: to avoid the impending harm but failed to do so, is chargeable with the
consequences arising therefrom. Stated differently, the rule is that the antecedent
21
REMEDIAL LAW
negligence of a person does not preclude recovery of damages caused by the
supervening negligence of the latter, who had the last fair chance to prevent the
impending harm by the exercise of due diligence.
Q: B Traversing EDSA swerved then collision took place with B barely
encroaching on C’s lane. Prior to and at the time of collision, C did not take any
defensive maneuver to prevent the accident and minimize the impending damage
to life and property, which resulted in the collision in the middle of the highway,
where a vehicle would normally be traversing. Is C liable for his lack of care in
driving?
A: Yes. The collision was certainly foreseen and avoidable but C took no
measures to avoid it. Rather than exhibit concern for the welfare of his
passengers and the driver of the oncoming vehicle, who might have fallen asleep
or suddenly fallen ill at the wheel, C coldly and uncaringly stood his ground
closed his eyes, and left everything to fate, without due regard for the
consequences. Such a suicidal mindset cannot be tolerated, for the grave danger
it poses to the public and passengers availing of petitioners' services. Where both
parties are negligent but the negligent act of one is appreciably later in point of
time than that of the other, or where it is impossible to determine whose fault or
negligence brought about the occurrence of the incident, the one who had the last
clear opportunity to avoid the impending harm but failed to do so, is chargeable
with the consequences arising therefrom. In this case C, clearly had the Last
Clear Chance, thus he is should be the one liable for having failed to avert the
clearly imminent danger. (Greenstar v Universal Robina G.R. No. 205090,
October 17, 2016)
The doctrine of “last clear chance” cannot apply if the: (iCOIN)
a. Negligence of the plaintiff is concurrent with that of the defendant (in pari
delicto);
b. Party charged is required to act instantaneously; c. Injury cannot be avoided
despite the application at all times of all the means to avoid the injury (after the
peril is or should have been discovered), at least in all instances where the
previous negligence of the party charged cannot be said to have contributed to
the injury at all. (O'Mally vs. Eagan, 77 ALR 582)
It goes without saying that the plaintiff himself was not free from fault, for he
was guilty of antecedent negligence in planting himself in the wrong side of the
road. But as we have already stated, the defendant was also negligent; and in
such case the problem always is to discover which agent is immediately and
directly responsible. It will be noted that the negligent acts of the two parties
were not contemporaneous, since the negligence of the defendant succeeded the
negligence of the plaintiff by an appreciable interval. Under these circumstances,
the law is that a person who has the last clear chance to avoid the impending
harm and fails to do so is chargeable with the consequences, without reference to
the prior negligence of the other party. (Picart vs. Smith, 37 Phil., 809)
The last clear chance doctrine of the common law was imported into our
jurisdiction by Picart vs. Smith but it is a matter for debate whether, or to what
extent, it has found its way into the Civil Code of the Philippines. The historical
function of that doctrine in the common law was to mitigate the harshness of
another common law doctrine or rule—that of contributory negligence. The
common law rule of contributory negligence prevented any recovery at all by a
plaintiff who was also negligent, even if the plaintiff’s negligence was relatively
minor as compared with the wrongful act or omission of the defendant. The
common law notion of last clear chance permitted courts to grant recovery to a
plaintiff who had also been negligent provided that the defendant had the last
clear chance to avoid the casualty and failed to do so. Accordingly, it is difficult
to see what role, if any, the common law last clear chance doctrine has to play in
a jurisdiction where the common law concept of contributory negligence as an
absolute bar to recovery by the plaintiff, has itself been rejected, as it has been in
Article 2179 of the Civil Code of the Philippines. (PHOENIX
CONSTRUCTION, INC. and CARBONEL Mar 10, 1987)
2. Duration of liability
a. Waiting for carrier or boarding of carrier
b. Arrival at destination
3. Liability for acts of others
a. Employees
b. Other passengers and strangers
4. Liability for delay in commencement of voyage
5. Liability for defects in equipment and facilities
6. Extent of liability for damages
22
EVIDENCE
23
REMEDIAL LAW
The document remains to be negotiable even if the words “not negotiable” or “non- Q: X is a trader of school supplies in Calapan, Oriental Mindoro. To bring the
negotiable” are placed thereon. school supplies to Calapan, it has to be transported by a vessel. Because there
HOW NEGOTIATED were so many passengers, the two (2) boxes of school supplies were loaded but
BEARER by delivery the shipping company was not able to issue the Bill of Lading. So, on board, the
DOCUMENT Ship Captain issued instead a "shipping receipt" to X indicating the 2 boxes of
school supplies being part of the cargo of the vessel. Is there a contract of
ORDER DOCUMENT through indorsement
carriage?
EFFECTS OF NEGOTIATION A:
has the effect of manual delivery so as to constitute the transferee the owner Q: A bill of lading indicated that the contract of carriage was under a "said to
of the goods weigh" clause. What are the responsibilities of the shipper and the carrier?
A: This means that the shipper was solely responsible for the loading of the
container while the carrier was oblivious to the contents of the shipment.
The nature of a Bill of Lading is as follows: The arrastre operator was, like any ordinary depositary, duty-bound to take good
(a) is a CONTRACT in itself and the parties are bound by its terms care of the goods received from the vessel and to turn the same over to the party
(b) it is a RECEIPT entitled to their possession, subject to such qualifications as may have validly
been imposed in the contract between the parties. The arrastre operator was not
(c) it is a SYMBOL of the goods covered by it required to verify the contents of the container received and to compare
them with those declared by the shipper because, as earlier stated, the cargo
The bill of lading is the law between the parties and is legal evidence of the was at the shipper’s load and count.94
contract. As such it is an actionable document.
As a receipt means that the issuance of a bill of lading carries the presumption GR: The bill of lading constitutes the
that the goods were delivered to the carrier issuing the bill, for immediate legal evidence of the contract of transportation, and all disputes between the
shipment and it is nowhere questioned that a bill of lading is prima facie parties regarding the execution and performance of the contract shall be decided
evidence of the receipt of the goods by the carrier. Since it is a prima facie by the contents of the bill of lading issued by the carrier. It is covered by the
evidence of receipt, the carrier may be allowed to present proof that he Parol Evidence Rule in which the terms of the contract are rendered conclusive
received the cargo on a date different from the date of the bill of lading. upon the parties. Evidence aliunde is not admissible to vary or contradict a
complete and enforceable agreement embodied therein [Magellan Mfg.
Since it also is a symbol of the goods, it is considered a document of title to the Marketing Corp. v. CA, G.R. No. 95529 (1991)]. The value of the goods stated
goods. A document of title is any document used in the ordinary course of in the bill of lading is conclusive between the parties, and the shipper is not
business in the sale or transfer of goods allowed to prove a higher value [Art. 372, COC]. It is only when the carrier’s
as proof of the possession or control of goods, or fault is so gross as to amount to actual fraud that the actual amount of the losses
authorizing the possessor of the document to transfer or receive, either by and damages suffered may be proved by the shipper against the carrier.
endorsement or delivery, goods represented by such document Exception: The contents of the bill of lading
are not controlling when there is falsity and
It is possible to have a contract of carriage even without a bill of lading. The material error in its drafting [Art. 353, COC].
shipping receipt would be sufficient. A bill of lading is not indispensable. For A bill of lading is not, however, indispensable
as long as there is a meeting of the minds of the parties, a contract of carriage for the creation of a contract of carriage
exists even in the absence of a bill of lading (Compania Maritima vs. Insurance [Compania Maritima v Insurance Co., G.R. No.
Co. of NA, G.R. No. L-18965, October 30, 1964). L-18965 (1964)].
In the absence of a bill of lading, disputes shall
be determined by the legal proofs which the
parties may present in support of their
respective claims, according
DELIVERY OF GOODS
LEGAL EVIDENCE
PERIOD OF DELIVERY
PARTIES TO A BILL OF LADING
1. Shipper
2. Carrier
NOTE: A consignee, although not a signatory to the contract of carriage between
the shipper and the carrier, becomes a party to the contract by reason of either:
a) The relationship of agency between the consignee and the shipper/ consignor;
b) The unequivocal acceptance of the bill of lading delivered to the consignee, PERIOD FIXED NO PERIOD FIXED
with full knowledge of its contents; or It must be made within such time; The carrier is obliged forward them
c) Availment of the stipulation pour autrui, i.e., when the consignee, a third otherwise, the carrier shall pay the with the first shipment of the same
person, demands before the carrier the fulfillment of the stipulation made by the indemnity stipulated in the bill of or similar merchandise he may
consignor/shipper in the consignee’s favor, specifically the delivery of the lading, neither the shipper nor the make to the point where he must
goods/cargoes shipped.93 consignee being entitled to anything deliver them; otherwise, the
else damages occasioned by the delay
TWO TYPES OF BILL OF LADING shall be suffered by him
(a) NEGOTIABLE – If issued to the bearer or to the order of any person
named in such bill.
(b) NON-NEGOTIABLE – If issued to a specific person named in such bill. DETERMINATION OF INDEMNITY IF THE SAME IS NOT STIPULATED
If no indemnity has been stipulated and the delay exceeds the time fixed in the
bill of lading, the carrier shall be liable for the damages which the delay may
have caused.
93 94
MOF Company, Inc., v. Shin Yang Brokerage Corporation, G.R. No. 172822, December 18, 2009 Asian Terminals Inc. v. Simon Enterprises, Inc., G.R. No. 177116, February 27, 2013
24
EVIDENCE
c when the goods are DAMAGED and such damage renders the goods
DELIVERY WITHOUT SURRENDER OF BILL OF LADING useless for the particular purpose for which there are to be used
GENERAL RULE d when there is DELAY on account of the fault of the carrier
Upon delivery of the goods, the consignee must surrender the bill of
lading to the carrier and their respective obligations are considered REMEDY OF SHIPPER
cancelled. In all cases, the shipper may exercise the RIGHT OF ABANDONMENT
by notifying the carrier. Ownership over damaged goods passes to the carrier
EXCEPTIONS and the carrier must pay the shipper the market value of the goods at point of
The goods may be released without the surrender of the bill of lading: destination.
a if surrender of the original bill of lading is IMPOSSIBLE (i.e., the bill
of lading gets lost or for other cause)
b if the seller INSTRUCTED the shipping company to deliver the cargoes
to the buyer without requiring the presentation of the bill of lading
In either case, the consignee must issue a receipt to the carrier upon release of
the goods. Such receipt shall produce the same effect as the surrender of the
bill of lading.
GR:
The surrender of the bill of lading is necessary upon delivery of the goods. If the
carrier fails to require such surrender and the bill od lading is non-negotiable, an
action against the carrier does not lie. If the bill of lading is negotiable, an action
by the shipper may lie against the carrier.
1. If– Action
2. If negotiable –
XPN: Surrender of the bill of lading is not necessary:
1.;
The shipping company is shall not be liable for releasing the cargoes to the buyer
(Macam vs. CA, G.R. No. 125524, August 25, 1999)
2..
Acknowledgment of the delivery by signing the delivery receipt suffices to
discharge the common carrier of its contractual obligation (National Trucking
and Forwarding Corporation vs. Lorenzo Shipping Corporation, G.R. No.
153563, February 27, 2005).
RONDEZ
1.1 The periods prescribed shall commence to run only from the time
the consignee is in actual possession.
1.2 The 24-hour rule is counted from the receipt of goods except if: (a)
the defect is due to the packing of the goods or may be seen from outside the
goods, or (b) owner/shipper never received the goods as there can be no
question as to the right to bring a claim.
25
REMEDIAL LAW
PERIOD FOR FILING CLAIMS Hong Kong, and second, in Manila. While travelling from Tokyo to Hong Kong,
the goods were damaged. What law will govern? (2013 Bar)
If the damage is APPARENT Immediately after delivery A: D. Philippine Law
If the damage is NOT APPARENT within 24 hours from delivery
Q: Assuming Philippine law to be applicable and Juan fails to file a claim with
the carrier, may he still commence an action to recover damages with the court?
(2013 Bar)
Claim for damages under Art. 366 of Code of Commerce A: B. Yes, provided he files the complaint within 10 years from delivery.
It applies in case of domestic transportation (inter-island) where there is damage
to the goods transported. COMMENCEMENT OF ACTION IF DELIVERY WAS MADE TO
The filing of claim is a condition precedent for recovery of damages.
Requisites: ARRASTRE OPERATOR
Commencement of action should be computed from the time of delivery to the
1. CONSIGNMENT of goods through a common carrier, by a consignor in one
arrastre operator. To use as basis for computing the one-year period, the
place to a consignee in another place; and
delivery to the consignee would be unrealistic and might generate confusion
2. The DELIVERY of the merchandise by the carrier to the consignee at the place between the loss or damage sustained by the goods while in the carrier’s custody
of destination.95 and those occurring while in the arrastre operator’s possession.
A claim against the arrastre operator must be filed within fifteen days from the
EFFECT OF PAYING THE TRANSPORTATION CHARGES IN THE FILING delivery of goods.98
OF AN ACTION ON ACCOUNT OF DAMAGES TO GOODS The filing of a provisional claim is substantial compliance with the provision in
If paid BEFORE checking the goods The right to file a claim is not the management contract of the arrastre operator that a formal claim for the loss
waived. of goods must be filed within thirty days from the filing of the entry.99
If paid AFTER the goods were The right to file a claim is already
checked waived.96
1.–
2.–
The compliance with a requirement in the bill of lading that the consignee must
file a claim for loss or damage to the goods shipped within thirty days from
delivery is a condition precedent to the accrual of a right of action against
the carrier.97
Q: Akiro of Tokyo, Japan sent various goods to his friend Juan in Cebu City,
Philippines, through one of the vessels of Worth Well Shippers, Inc., an
American corporation. En route to Cebu City, the vessel had two stops, first in
95 98
New Zealand Ins. Co., Ltd. v. Choa Joy, G.R. No. L-7311, Sept. 30, 1955 International Container Terminal Services, Inc. v. Prudential Guarantee and Assurance Company, Inc. G.R.
96
Southern Lines, Inc. v. CA, G.R. No. L-16629, Jan. 31, 1962 No. L-134514, December 8, 1999
97 99
Philippine American General Insurance Co. v. Sweet Lines, Inc., G.R. No. 87434, August 5, 1992 Metro Port Service Inc. v. IAC, G.R. No. 66253, August 31, 1992
26
EVIDENCE
The word ‘vessel’ used in the Code of Commerce was not intended to include
all ships, craft, or floating structures of every kind without limitation.100
SHIPOWNER
He has possession, management, and control over the vessel, and the
consequent right to direct her navigation. While in his possession, the
shipowner also receives freight earned and paid.
SHIP AGENT
He is entrusted with provisioning and of representing the vessel in the
port in which it may be found. His liability to passengers and cargo owners for
loss or injury is the same as the shipowner. He is solidarily liable with the
shipowner for loss or damage subject to his right to claim reimbursement
from the shipowner.
SUPERCARGO
He discharges administrative duties assigned to him by the ship agent or
the shippers, keeping an account and record of transactions as required in the
accounting book of the captain.
100
Lopez v. Duruelo, G.R. No. L-29166 (1928)
27
REMEDIAL LAW
CHARTER PARTIES BAREBOAT DISTINGUISHED FROM CONTRACT OF AFFREIGHTMENT
BAREBOAT OR DEMISE CONTRACT OF
CHARTER PARTY CHARTER AFFREIGHTMENT
It is a contract by virtue of which the owner or agent of a vessel leases the charterer becomes liable to others for owner remains liable as carrier and
entire ship or some principal part thereof to another person for a specified any breach caused by its negligence must answer for any breach of duty
period of time or use in consideration of the payment of freight. charterer regarded as owner pro hac charterer not regarded as owner
vice for the voyage
CLASSES OF CHARTER PARTY owner relinquishes possession, owner retains possession, command,
(1) Bareboat or demise command, and navigation to and navigation of the ship
(2) Contract of affreightment charterer
a. Time charter In a bareboat or demise charter, the common carrier is converted to private
b. Voyage or trip charter carrier.
Both time and voyage charters are said to be contracts of affreightment, where a common
Although a charter party may transform a common carrier into a private one, the
or public carrier is not converted into a private carrier.
same, however, is not true in a contract of affreightment on account of the
distinctions between a contract of affreightment and a demise or bareboat charter
PERSONS WHO MAKE A CHARTER [Puromines Inc. v. CA, G.R. No. 91228 (1993)].
a. Owner or owners of the vessel, either in whole or in part, who have legal
control and possession of the vessel;
b. A charterer may subcharter the entire vessel to a third person unless prohibited
CONTRACT OF AFFREIGHTMENT
in original charter [Art 679, COC];
It is one whereby the owner of the vessel leases part or all of its space to
c. A ship agent if authorized by the owner/s or given such power in the certificate
haul goods for others. It is a contract for special service to be rendered by the
of appointment [Art 598, COC]; or
owner of the vessel. Under such contract, the shipowner retains the possession,
d. Captain in the absence of the ship agent or
command, and navigation of the ship, the charterer or freighter merely having
use of the space in the vessel in return for his payment of the charter hire.
REQUISITES FOR A VALID CHARTER PARTY
a. Consent of the contracting parties
b. Existing vessel which should be placed at the disposition of the shipper
c. Freight
TIME CHARTER
d. Compliance with the formal requisites under Article 652 of the Code of
It is a contract for the use of a vessel for a specified period of time or for
Commerce which include the requirement that the charter party must be in (a)
the duration of one or more specified voyages. The owner of a time-chartered
writing, (b) drawn in duplicate, and (c) signed by the parties.
vessel retains possession and control through the master and crew, who
remain his employees.
Note:
The time charterer acquires the right to:
Contract of affreightment – one in which the
Utilize the carrying capacity and facilities of the vessel; and
owner of the vessel leases part or all of its
Designate her destinations during the term of the charter [Litonjua Shipping
space to haul goods for others.
Co., Inc. v. National Seamen Board, G.R. No. L- 51910(1989)].
It is a contract for special service, wherein the
general owner retains the possession,
command and navigation of the ship VOYAGE OR TRIP CHARTER
The charterer or freighter merely has use of the In a voyage charter, the vessel is leased for a single or particular voyage.
space in the vessel in return for his payment of The vessel is chartered for a carriage of goods from one or more ports of loading
the charter hire. to one or more ports of unloading.
The rights, responsibilities of ownership rest on The master and crew remain the employ of the owner of the vessel.102
the owner, and the charterer is usually free The owner who retains possession of the ship remains liable as carrier and must
from liability to third persons in respect of the answer for loss or non-delivery of the goods received for transportation. 103
ship [Puromines Inc. v. CA, G.R. No. 91228
(1993)]. Te master and crew remain under the employ of the owner.
102
Litonjua Shipping Co., Inc. v. National Seamen Board
103
Cebu Salvage Corp. v. Philippine Home Assurance Corp.
101 104
Puromines Inc. v. CA Litonjua Shipping Co., Inc. v. National Seamen Board, G.R. No. L-51910, August 10, 1989
28
EVIDENCE
a. Bareboat/demise charter
b. Time charter
c. Voyage/trip charter The captain shall be liable to the agent, and the latter to third persons for:
all DAMAGES suffered by the vessel and his cargo by reason of want of skill
or negligence on his part
all THEFTS committed by the crew, reserving his right of action against the
guilty parties
LIABILITY OF SHIPOWNERS AND SHIPPING AGENTS all losses, fines, and confiscations imposed on account of VIOLATION of the
laws and regulations of customs, police, health, and navigation
all losses and damages caused by MUTINIES on board the vessel, or by
Shipowners are allowed to limit their liability for any loss or damage to the value reason of faults committed by the crew in the service and defense of the
of their investment or amount of interest in the vessel. same, if he does not prove that he made full use of his authority to prevent or
avoid them
This is called the real and hypothecary nature of maritime law, otherwise known those arising by reason of an undue use of powers and non-fulfillment of
as the no vessel no liability doctrine the obligations which are his
those arising by reason of his going out of his COURSE or taking a course
which he should not have taken without sufficient cause, in the opinion of
CIVIL LIABILITY OF THE SHIP AGENT AND SHIPOWNER the officers of the vessel at a meeting with the shippers or supercargoes who
(1) all CONTRACTS of the captain, whether authorized or unauthorized, to may be on board
repair, equip, and provision the vessel those arising by reason of his voluntarily entering a PORT other than that of
(2) LOSS and DAMAGE to the goods loaded on the vessel without prejudice his destination
to the shipowner or ship agent freeing themselves from liability by those arising by reason of NON-OBSERVANCE of the provisions contained
abandoning the vessel to the creditors in the regulations on situation of lights and maneuvers for the purpose of
preventing collisions
29
REMEDIAL LAW
ACCIDENTS AND DAMAGES IN MARITIME COMMERCE (2) There must be a DELIBERATION.
(3) The captain must make a RESOLUTION.
(4) The resolution shall be ENTERED in the log book, with the reasons and
AVERAGE motives and the votes for and against the resolution.
Averages pertain to expenses and damages: (5) The MINUTES of the meeting shall be signed by the parties and
D There must be a common DANGER to the ship and cargo after it has delivered to the maritime judicial authority of the first port of arrival
been loaded. within 24 hours from arrival.
(6) There must be RATIFICATION by the captain under oath.
a. Expense
a. Extraordinary or accidental;
b. Incurred during the voyage; and
c. Incurred in order to preserve the vessel, the cargo, or both.
GENERAL AVERAGES PARTICULAR AVERAGES
b. Damages or Deterioration – to constitute both the ship and cargo are subject no such common danger to both the
an average, it must: to the same danger which is real vessel and the cargo
a. Have been suffered by the vessel from the time the vessel put to sea from and known
the port of departure until it casts anchor in the port of destination; and part of the vessel or of the cargo or expenses and damage caused to the
b. Have been suffered by the merchandise from the time they are loaded in the both is sacrificed deliberately vessel or to her cargo are neither
port of shipment until they are unloaded in the port of consignment [Art. deliberately made nor subject to
806, COC]. any legal step or authority
from the expenses or damage caused expenses or damages suffered have
TWO KINDS OF AVERAGES follows the successful saving of the not inured to such common benefit
vessel and her cargo
1. Particular or simple average; and
2. Gross or general average. All the persons having an interest The owner of the things which gave
in the vessel and cargo saved shall rise to the expenses or suffered the
contribute to indemnify the damages shall bear the same.
expenses or damages caused.
GENERAL AVERAGE Common danger means both the ship and the cargo, after it has been loaded, are subject to
(a) must be deliberately incurred the same danger.
(b) must be intended to save vessel and cargo Whether during the voyage, or in the port
(c) must be caused by a real and known risk to which the shipper and the of loading or unloading;
carrier were exposed Whether the danger arises from the
(d) success in saving the vessel and the remaining cargo accidents of the sea, dispositions of the
authority, or faults of men;
If notwithstanding the jettison of merchandise, breakage of masts, ropes, Provided that the circumstances producing
and equipment, the vessel shall be lost running the same risk, no contribution the peril may rationally be said to be certain
whatsoever by jettison of gross average shall be proper. The owners of the and imminent;
goods saved shall not be liable for indemnification of those jettisoned, lost or Excludes measures undertaken against a
damaged. distant peril [Magsaysay, Inc. v. Agan, G.R.
No. L-6393 (1955)].
PARTICULAR AVERAGE Note: When a vessel is stranded unintentionally, the damages incurred cannot
Particular or simple averages shall include all damages and expenses caused to constitute general averages.
the vessel or cargo that did not inure to the common benefit and profit of all
persons interested in the vessel and her cargo. CASES OF GENERAL AVERAGE
The owner of the goods which gave rise to the expense or suffered the damage The goods or cash invested in the redemption of the vessel or cargo captured
shall bear this average [Art. 810, COC]. by enemies, privateers, or pirates, and the provisions, wages, and expenses of
the vessel detained during the time the arrangement or redemption is taking
GENERAL AVERAGE place.
General or gross averages shall include all the damages and expenses which are The goods jettisoned to lighten the vessel, whether they belong to the vessel,
deliberately caused in order to save the vessel, her cargo, or both at the to the cargo, or to the crew, and the damage suffered through said act by the
same time, from a real and known risk [Art. 811, COC]. goods kept.
The gross or general average shall be borne by those who benefited from the The cables and masts which are cut or rendered useless, the anchors and the
sacrifice. These include the ship owner and the owners of the cargoes that were chains which are abandoned in order to save the cargo, the vessel, or both.
saved. Contribution may also be imposed on the insurers of the vessel or cargoes The expenses of removing or transferring a portion of the cargo in order to
that were saved, as well as lenders on bottomry or respondentia. lighten the vessel and place her in condition to enter a port or roadstead, and
the damage resulting therefrom to the goods removed or transferred.
REQUISITES FOR GENERAL AVERAGE The damage suffered by the goods of the cargo through the opening made in
D There must be a common DANGER to the ship and cargo after it has the vessel in order to drain her and prevent her sinking.
been loaded. The expenses caused through floating a vessel intentionally stranded for the
D A portion of the vessel or some of the cargoes or both are purpose of saving her.
DELIBERATELY sacrificed for the common safety. The damage caused to the vessel which is necessary to break open, scuttle, or
S The vessel or cargo is SUCCESSFULLY saved. smash in order to save the cargo.
The expenses of curing and maintaining the members of the crew who may
F The expenses or damages should have been incurred or inflicted after
have been wounded or crippled in defending or saving the vessel.
taking the FORMALITIES provided under Articles 813 and 814 of
The wages of any member of the crew detained as hostage by enemies,
the Code of Commerce. privateers, or pirates, and the necessary expenses which he may incur in his
imprisonment, until he is returned to the vessel or to his domicile, should he
FORMALITIES FOR INCURRING GROSS AVERAGE prefer it.
(1) There must be an ASSEMBLY called by the captain of the sailing mate The wages and victuals of the crew of a vessel chartered by the month during
and other officers, including those with interests in the cargo. the time it should be embargoed or detained by force majeure or by order of
30
EVIDENCE
the Government, or in order to repair the damage caused for the common If a vessel should collide with another through the fault, negligence, or lack of
good. skill of the captain, sailing mate, or any other member of the complement, the
The loss suffered in the value of the goods sold at arrivals under stress in owner of the vessel at fault shall indemnify the losses and damages suffered,
order to repair the vessel because of gross average. after an expert appraisal.
The expenses of the liquidation of the average.
If in lightening a vessel on account of a storm, in order to facilitate her entry If both vessels may be blamed for the collision, each one shall be liable for his
into a port or roadstead, part of her cargo should be transferred to lighters or own damages, and both shall be jointly responsible for the losses and damages
barges and be lost, the owner of said part shall be entitled to indemnity, as if suffered by their cargoes.
the loss has originated from a gross average.
If, as a necessary measure to extinguish a fire in a port; roadstead; creek, or The provisions of the foregoing article are applicable to the case in which it can
bay, it should be decided to sink any vessel, this loss shall be considered gross not be decided which of the two vessels was the cause of the collision.
average, to which the vessels saved shall contribute.
If a vessel should be forced to collide with another one by a third vessel, the
owner of the third vessel shall indemnify for the losses and damages caused, the
JETTISON captain thereof being civilly liable to said owner.
The act of throwing overboard part of a vessel’s cargo or hull in hopes of saving
a ship from sinking. The captain shall direct the jettison, and shall order the
goods cast overboard in the following order: COLLISION BETWEEN A STEAM AND A SAIL VESSEL
1 GOODS ON DECK General Rule: When meeting a sailing vessel, whether close hauled or with the
wind free, the sail vessel has a right to keep her course, and it is the duty of the
beginning with those which embarrass the maneuver or damage the steamer to adopt precautions as will avoid the sail vessel. In a collision
vessel, preferring, if possible, the HEAVIEST ones with the LEAST utility between a steam vessel and a sail vessel, the presumption is against the steam
and value vessel.
2 GOODS BELOW THE UPPER DECK The steam vessel must show that she took the proper measures to avoid a
collision. Ratio: The steamer’s greater facility of maneuvering over a sail
3 vessel means it has the greater ability to avoid collisions [A. Urrutia & Co. v.
Baco River Plantation Co, G.R. No. L- 7675. [1913)].
COLLISION BETWEEN TWO POWER-DRIVEN VESSELS
1. -; General Rule: When two power-driven vessels are meeting head on, or nearly
2. - always beginning with those of the greatest weight and smallest value to the head on, so as to involve risk of collision, each shall alter her course to
amount and number absolutely indispensable [Art. 815, COC]. starboard (right side). Ratio: So that each may pass on the port (left) side of the
other [Smith Bell and Co. v. CA, G.R. No. L-56294 (1991)].
REQUIRED PROOF
To include the goods jettisoned in the general or gross average, the existence of LIABILITY IN COLLISION CASES
the cargo or goods must be proved: Liability in collision cases is negligence-based. Courts are called upon to
1. For cargo – by means of bill of lading; determine the negligence of the persons involved in order to impose liability.
2. For good belonging to the vessel – by means of the inventory prepared prior The person who caused the injury is both civilly and criminally liable [Aquino].
to departure [Art. 816, COC]. Nevertheless, the rules that apply to quasidelict cannot be applied to collision
cases. The doctrine of last clear chance and the rules on contributory negligence
JASON CLAUSE cannot be applied in collision cases. This is in accordance with Art. 827 of the
Jason clause is a provision in the contract of carriage that requires the cargo Code of Commerce. Thus, if both vessels were negligently operated, each must
owners to contribute in the general average, though the event which gave rise to suffer its own damage even if the other has the last clear chance of avoiding the
the sacrifice or expenditure may have been due to the fault of one of the parties injury [C.B. Williams v. Yangco, G.R. No. L-8325 (1914)]. Similarly, proof that
to the adventure [Rule D, York Antwerp Rules]. Note: This shall not prejudice the plaintiff was negligent will bar recovery from the defendant in collision cases
any remedies or defenses which may be open against or to that party in respect of even if the plaintiff’s negligence can be classified as merely contributory
such fault. [Gorgonio De Sarasola v. Yu Biao Sontua, G.R. No. L-22630 (1925)].
U.P. LAW BOC TRANSPORTATION LAW COMMERCIAL LAW
Page 85 of 450
PROCEDURE FOR RECOVERY
1. Assembly and deliberation with the sailing mate and other officers
CLASSES OF COLLISION
2. Resolution of the captain adopted
3. Hearing of the persons interested. In case an interested person should not be 1 FORTUITOUS
heard, he shall not contribute to the gross average When collision is due to a fortuitous event or force majeure, each vessel
4. Resolution to be entered in the log book, stating the motives and reasons and its cargo shall bear its own damages.
therefore as well as the votes and reason for disagreement When, by reason of force majeure, a vessel properly anchored and
5. Minutes to be signed by all the persons present or in urgent cases, the captain moored collides with another, the injury occasioned shall be looked upon
6. Captain shall deliver one copy of the minutes to the maritime judicial authority as particular average to the vessel run into.
of the first port he may make within 24 hours 2 CULPABLE
7. Captain shall ratify the minutes under oath When only one vessel is at fault, the owner of the vessel at fault shall
indemnify the losses and damages suffered, after an expert appraisal.
When both vessels are at fault, each shall suffer its own damages, and
a. General average both shall be solidarily responsible for the losses and damages
occasioned to their cargoes. The ship owners cannot successfully
COLLISIONS AND ALLISIONS maintain an action against the other for the loss or injury to his vessel.
The common carrier operating the vessel is precluded from interposing the defense of
Collision refers to the contact of two moving vessels. Allision refers to the due diligence in the selection and supervision of its employees in an action against it by
contact between one moving vessel and a stationary vessel. a shipper of the other colliding vessel.
When a third vessel is at fault, the owner of the third vessel shall
indemnify the losses and damages caused, the captain thereof being civilly
31
REMEDIAL LAW
liable to said owner. (3) After receiving the goods into his charge the carrier, or the master or agent of
3 INSCRUTABLE FAULT the carrier, shall, on demand of the shipper, issue to the shipper a bill of lading
If it cannot be decided which of the two vessels was the cause of the showing among other things —
collision, each shall bear his own damage and both shall be jointly
responsible for the losses and damages suffered by their cargoes. (a) The leading marks necessary for identification of the goods as the same are
furnished in writing by the shipper before the loading of such goods starts,
provided such marks are stamped or otherwise shown clearly upon the goods if
THREE ZONES OF TIME IN COLLISION OF VESSELS uncovered, or on the cases or coverings in which such goods are contained, in
1 FIRST ZONE such a manner as should ordinarily remain legible until the end of the voyage.
covers the journey of the vessel until the moment when the risk of collision
begins (b) Either the number of packages or pieces, or the quantity or weight, as the
2 SECOND ZONE case may be, as furnished in writing by the shipper.
the moment when the risk of collision begins up to the moment that it
becomes a practical certainty (c) The apparent order and condition of the goods: Provided, That no carrier,
During this zone, vessels must strictly abide with nautical rules, unless a master, or agent of the carrier, shall be bound to state or show in the bill of
deviation therefrom is imperative to avoid imminent danger. lading any marks, number, quantity, or weight which he has reasonable ground
3 THIRD ZONE for suspecting not accurately to represent the goods actually received, or which
he has had no reasonable means of checking.
the period when collision is certain and the time of impact
The error in this zone would no longer be legally consequential. (4) Such a bill of lading shall be prima facie evidence of the receipt by the carrier
of the goods as therein described in accordance with paragraphs (3) (a), (b), and
(c) of this section: Provided, That nothing in this Act shall be construed as
repealing or limiting the application of any part of the Act, as amended, entitled
"An Act relating to bills of lading in interstate and foreign commerce," approved
August 29, 1916 (U. S. C. title 49, secs. 81-124), commonly known as the
CARRIAGE OF GOODS BY SEA ACT "Pomerene Bills of Lading Act."
A. APPLICATION (5) The shipper shall be deemed to have guaranteed to the carrier the accuracy at
GR: COGSA only applies in terms of loss or damage of goods the time of shipment of the marks, number, quantity, and weight, as furnished by
transported to and from Philippine ports in foreign trade. him; and the shipper shall indemnify the carrier against all loss damages, and
XPN: It may also apply to domestic trade when there is a expenses arising or resulting from inaccuracies in such particulars. The right of
paramount clause in the contract. the carrier to such indemnity shall in no way limit his responsibility and liability
The COGSA applies up to the final port of destination even if the transshipment was made under the contract of carriage or to any person other than the shipper.
on an inter-island vessel.106
(6) Unless notice of loss or damage and the general nature of such loss or
Duration of applicability damage be given in writing to the carrier or his agent at the port of discharge
From the time the goods have been discharged from the ship and given to before or at the time of the removal of the goods into the custody of the person
the custody of the arrastre operator is not covered by COGSA entitled to delivery thereof under the contract of carriage, such removal shall be
prima facie evidence of the delivery by the carrier of the goods as described in
the bill of lading. If the loss or damage is not apparent, the notice must be given
PARAMOUNT CLAUSE within three days of the delivery.
It is a stipulation or clause either on the bill of lading or charter party
stipulating the laws that the parties agreed to be followed in the event of Said notice of loss or damage maybe endorsed upon the receipt for the goods
breach. given by the person taking delivery thereof.
CASES COVERED BY THE COGSA The notice in writing need not be given if the state of the goods has at the time of
their receipt been the subject of joint survey or inspection.
It applies only in case of non-delivery or damage, and not to
misdelivery or conversion of goods.107 Also, the deterioration of goods due to
In any event the carrier and the ship shall be discharged from all liability in
delay in their transportation is not covered by Sec. 6 of COGSA.108
respect of loss or damage unless suit is brought within one year after delivery of
the goods or the date when the goods should have been delivered: Provided, That
OBLIGATIONS OF THE CARRIER if a notice of loss or damage, either apparent or concealed, is not given as
The carrier shall be bound, before and at the beginning of the voyage, to provided for in this section, that fact shall not affect or prejudice the right of the
exercise due diligence to: shipper to bring suit within one year after the delivery of the goods or the date
1 make the ship seaworthy when the goods should have been delivered
2 properly man, equip, and supply the ship
3 make the holds, refrigerating and cooling chambers, and all other In the case of any actual or apprehended loss or damage the carrier and the
parts of the ship in which goods are carried, fit and safe for their receiver shall give all reasonable facilities to each other for inspecting and
reception carriage and preservation tallying the goods.
(a); (7) After the goods are loaded the bill of lading to be issued by the carrier,
master, or agent of the carrier to the shipper shall, if the shipper so demands, be a
(b); "shipped" bill of lading Provided, That if the shipper shall have previously taken
up any document of title to such goods, he shall surrender the same as against the
(c). issue of the "shipped" bill of lading, but at the option of the carrier such
document of title may be noted at the port of shipment by the carrier, master, or
(2) The carrier shall properly and carefully load, handle, stow, carry, keep, care agent with name or name the names of the ship or ships upon which the goods
for, and discharge the goods carried. have been shipped and the date or dates of shipment, and when so noted the same
shall for the purpose of this section be deemed to constitute a "shipped" bill of
lading.
106
(8) Any clause, covenant, or agreement in a contract of carriage relieving the
Sea Land Service Inc. vs. IAC, G.R. No. 75118, August 31, 1987
107
carrier or the ship from liability for loss or damage to or in connection with the
Ang v. American Steamship Agencies, Inc., G.R. No. L-22491, Jan. 27, 1967
108
Mitsui O.S.K. Lines Ltd. v. CA, G.R. No. 119571, March 11, 1998 goods, arising from negligence, fault, or failure in the duties and obligations
32
EVIDENCE
provided in this section, or lessening such liability otherwise than as provided in
this Act, shall be null and void and of no effect. A benefit of insurance in favor
of the carrier, or similar clause, shall be deemed to be a clause relieving the
carrier from liability.
C. PERIOD OF PRESCRIPTION
The suit must be brought within one year after delivery of the goods or
the date when the goods should have been delivered; otherwise, the carrier
and the ship shall be discharged from all liability in respect of loss or damage.
The absence of a notice shall not affect or prejudice the right of the shipper to bring suit
within one year after the delivery of the goods or the date when the goods should have
been delivered.
COGSA, as a special law, prevails over the general provisions of the Civil Code on
prescription of actions.
D. LIMITATION OF LIABILITY
The limit is set at a maximum of $500 per package or customary freight
unit. This is deemed incorporated in the bill of lading even if not mentioned
therein.109
The declaration made by the shipper stating an amount bigger than $500
per package will make the carrier liable for such bigger amount, but only if
the amount so declared is the real value of goods.
The Civil Code does not limit the liability of the common carrier to a fixed amount per
package. Thus, the COGSA supplements the Civil Code by establishing a statutory
provision limiting the carrier’s liability in the absence of a shipper’s declaration of a
higher value in the bill of lading.110
109
Eastern Shipping Lines v. IAC
110
Belgian Overseas Chartering and Shipping v. Philippine First Insurance Company
33
REMEDIAL LAW
CHAPTER VI PUBLIC SERVICE ACT PUBLIC SERVICE AND PUBLIC UTILITY
PUBLIC SERVICE PUBLIC UTILITY
PURPOSE OF THE LAW every person who owns, operates, a business or service engaged in
The primary purpose of the law is to secure adequate, sustained service manages or controls, for hire or regularly supplying in the public
for the public at least cost, and to protect and conserve investments which compensation, and done for general with some commodity or service of
have already been made for that purpose. business purposes, any common public consequence such as
Hence, interested or qualified parties intending to operate as a public utility carrier railroad, street railway, electricity, gas, water, transportation,
or provide public service: (a) must apply for, and obtain, a license or permit traction railway, subway motor telephone or telegraph service
from the Public Service Commission, and comply with certain defined terms vehicle, either for freight or
and conditions, and (b) upon grant of the license, the operator must conform to, passenger, or both with or without
and comply with, all reasonable rules and regulations of the Public Service fixed route and whatever may be its
Commission. classification, freight or carrier
The law was enacted not only to protect the public against unreasonable service of any class, express service,
charges and poor, inefficient service, but also to prevent ruinous steamboat, or steamship line,
competition. pontines, ferries, and water craft
engaged in the transportation of
PUBLIC SERVICE COMMISSION passengers or freight or both,
The object and purpose of such a commission is to look out for, and shipyard, marine railway, marine
protect the interests of the public and to provide it with safe and suitable repair shop, wharf or dock, ice plant,
means of travel over the highways. ice refrigeration plant, canal,
irrigation system gas, electric light,
heat and power, water supply and
REGULATORY AGENCIES REPLACING THE PUBLIC SERVICE
power, petroleum, sewerage system,
COMMISSION wire or wireless communication
The Public Service Commission has been replaced by the following systems, broadcasting stations and
regulatory agencies: other similar public services
(a) Land Transportation Franchising Regulatory Board (LTFRB) for land provides a service or facility
transportation needed for present day living
(b) Maritime Industry Authority (MARINA) for water transportation which cannot be denied to anyone
(c) Civil Aeronautics Board (CAB) for air transportation who is willing to pay for it
(d) Energy Regulatory Board (ERB) for electric or power companies requires only a certificate of public requires a franchise, aside from a
(e) National Water Resources Council (NWRC) for water resources convenience certificate of public necessity and
(f) National Telecommunications Commission (NTC) for communication convenience
utilities and services, radio communications systems, wire or wireless
telephone and telegraph systems, radio and television broadcasting systems
and other similar public utilities
2.5 However, laws may provide that an activity is not a public utility. An
example is Section 29 of the Electric Power Reform Act of 2001 (EPIRA) which
states “any law to the contrary notwithstanding, supply of electricity to the
contestable market shall not be considered a public utility operation.” This means
PUBLIC UTILITY that independent power producers/power generators are not considered
public utilities that may be subject to regulatory policy.
A public utility is a business or service engaged in regularly supplying the
public with some commodity or service of public consequence. The term
implies public use and service.
e.g., electricity, gas, water, transportation, telephone or telegraph service
They are enterprises which specially cater to the needs of the public and
are conducive to their comfort and convenience. NECESSITY FOR CERTIFICATE OF PUBLIC CONVENIENCE
The business and operations of a public utility are imbued with public
No public service as herein defined shall operate in the Philippines without
interest. A public utility is engaged in public service, providing basic
having first secured from the Commission a certificate, which shall be known as
commodities and services indispensable to the interest of the general public.
Certificate of Public Convenience (CPC) or as Certificate of Public Convenience
For this reason, it submits to regulation of government authorities and
and Necessity (CPCN) [Section 15, Public Service Act].
surrenders certain business prerogatives, including the amount of rates that
may be charged by it. It is the imperative duty of the State to interpose its
protective power whenever too much profits become the priority of public REQUISITES BEFORE A CERTIFICATE OF PUBLIC CONVENIENCE
utilities. (CPC) MAY BE GRANTED
When, therefore, one devotes his property to a use in which the public 1 The applicant must be a CITIZEN of the Philippines, or a corporation,
has an interest, he, in effect, grants to the public an interest in that use and partnership, association or joint stock company constituted and
must submit to the control by the public for the common good, to the extent organized under the laws of the Philippines, at least 60% of the
of the interest he has thus created. stock or paid-up capital of which belong entirely to citizens of the
Philippines.
2 The applicant must prove that the operation of the public service
proposed and the authorization to do business will PROMOTE
PUBLIC INTEREST in a proper and suitable manner.
3 The applicant must be FINANCIALLY CAPABLE of undertaking the
proposed service and meeting the responsibilities incident to its
operations.111
CITIZENSHIP
A franchise, certificate, or any other form of authorization for the
operation of a public utility shall be granted only to:
111
Vda. De Lat v. Public Service Commission
34
EVIDENCE
(1) citizens of the Philippines What is a just and reasonable rate is a question of fact calling for the
(2) corporations or associations organized under the laws of the Philippines at exercise of discretion, good sense, and a fair, enlightened and independent
least 60% of whose capital is owned by such citizens112 judgment. The requirement of reasonableness comprehends such rates which
must not be so low as to be confiscatory, or too high as to be oppressive.118
PROMOTION OF PUBLIC INTERESTS
Property becomes clothed with a public interest when used in a manner to RATE OF RETURN
make it of public consequence and affect the community at large. FACTORS IN DETERMINING THE JUST AND REASONABLE RATES TO
When one devotes his property to a use in which the public has an interest, BE CHARGED BY A PUBLIC UTILITY
he, in effect, grants to the public an interest in that use, and must submit to (1) rate of return
be controlled by the public for the common good, to the extent of the interest (2) rate base
he has thus created.113 (3) the return itself or the computed revenue to be earned by the public utility
based on the rate of return and rate base
FINANCIAL CAPABILITY The rate of return is a judgment percentage which, if multiplied with the rate base,
One of the primary factors considered in the granting of a certificate of provides a fair return on the public utility for the use of its property for service to the
public convenience for the business of public transportation is the financial public.
capacity of the holder of the license, so that liabilities arising from accidents The rate of return of a public utility is not prescribed by statute but by administrative and
judicial pronouncements.
may be duly compensated.114
The Supreme Court has consistently adopted a 12% rate of return for public utilities.119
35
REMEDIAL LAW
It is one of the root causes of the prevalence of graft and corruption in the
government transportation offices.
It is contrary to public policy, and is therefore void and inexistent.123
123
Teja Marketing v. IAC
124
Lita Enterprises, Inc. v. IAC
125
Montoya v. Ignacio
36
EVIDENCE
1. Within the territories of two High Contracting Parties; or
CHAPTER VII THE MONTREAL CONVENTION 2. Within the territory of a single High Contracting Party, if there is an agreed
stopping place within a territory subject to the sovereignty, suzerainty, mandate
The Montreal Convention establishes airline liability in the case of death or
or authority of another Power, even though that Power is not a party to the
injury to passengers, as well as in cases of delay, damage or loss of baggage and
Convention (WC, Art. 1[2]).
cargo. It unifies all of the different international treaty regimes covering airline
High Contracting Parties are the signatories to the Warsaw Convention and
liability that had developed haphazardly since 1929. MC99 is designed to be a
those which subsequently adhered to it (Mapa vs. CA, G.R. No. 122308, July 8,
single, universal treaty to govern airline liability around the world.
1997).
Q: How should carriage performed by several successive air carriers be treated
MONTREAL CONVENTION under Warsaw Convention?
With the Montreal Convention, airline liability caps have been substantially A: A carriage to be performed by several successive air carriers is deemed, for
increased such that a passenger is entitled to claim damages up to $170,000 the purposes of Warsaw Convention to be one undivided carriage, if it has been
even without proof of negligence or fault by the airline. Furthermore, in excess regarded by the parties as a single operation, whether it had been agreed upon
of this amount, the burden of proof is on the shoulders of the carrier to show that under the form of a single contract or of a series of contracts (WC, Art. 1 [3]).
it was not negligent. Such carriage does not lose its international character merely because one
1. Passenger death or bodily injury – no financial limits, however, the carrier contract or a series of contracts is to be performed entirely within a territory
shall not be liable for damages exceeding 100,000 subject to the sovereignty, suzerainty, mandate or authority of same High
Special Drawing Rights (Approximately EUR 123,000) if it proves that it was Contracting Party (Ibid).
not negligent or at fault or such damages is solely attributable to the negligence Documents of carriage issued under the Warsaw Convention
or fault of third parties. The air carrier may make an advance payment to meet The following are the documents of carriage:
the immediate economic needs of the person entitled to claim compensation. 1. Passenger Ticket
2. Destruction, loss of, or damage or delay to baggage – 1,000 Special Drawing 2. Luggage Ticket
Rights (approximately EUR 1,230) per passenger. 3. Air Consignment note
3. Damage caused by delay in the carriage by air of passengers– 4,150 Special Function of the air consignment note
Drawing Rights. (approximately EUR 5,100) It is prima facie evidence of:
1. The conclusion of the contract
2. Receipt of the goods
3. Conditions of carriage (WC, Art. 11 [1])
APPLICABILITY
RIGHT TO DISPOSE BY CONSIGNOR
The Montreal Convention applies to all international carriage of persons, The consignor may exercise its right to dispose of the goods by:
baggage or cargo performed by aircraft for reward. It applies equally to 1. withdrawing them at the aerodrome of departure or destination
gratuitous carriage by aircraft performed by an air transport undertaking. 2. stopping them in the course of the journey on any landing
3. calling for them to be delivered at the place of destination or in the course of
the journey to a person other than the consignee named in the air consignment
INTERNATIONAL CARRIAGE note
Any carriage in which, according to the agreement between the parties, the 4. requiring them to be returned to the aerodrome of departure (WC, Art. 12).
place of departure and the place of destination, whether or not there be a break in In the exercise of this right, the carrier or other consignors must not be
the carriage or a transshipment, are situated either: prejudiced. For the carrier to obey the orders for disposition, the carrier must
within the territories of two States Parties require the production of the part of the air consignment note delivered to the
within the territory of a single State Party consignor (Ibid).
if there is an agreed stopping place within the territory of another State, even if Right to dispose ceases as soon as the consignee, on arrival of the goods at the
that State is not a State Party. place of destination, require the carrier to hand over to him the air consignment
Carriage between two points within the territory of a single State Party without note and to deliver the goods to him, on payment of charge due and on
an agreed stopping complying with the conditions of carriage set out in the air consignment note
place within the territory of another State is not international carriage for the (WC, Art. 13).
purposes of this Where the supervisor of the consignee signed the delivery receipt for the goods
Convention. shipped, the consignee cannot sue the shipping company for non-delivery of the
2 goods.126
3. Carriage to be performed by several successive carriers is deemed, for the
purposes of this LIABILITIES UNDER THE WARSAW CONVENTION
Convention, to be one undivided carriage if it has been regarded by the parties as The carrier is liable under the following instances:
a single operation, (a) Damage sustained in the event of the death or wounding of a passenger
whether it had been agreed upon under the form of a single contract or of a series taking place on board the aircraft or in the course of any of the operations
of contracts, and of embarking or disembarking;
it does not lose its international character merely because one contract or a series (b) Loss or damage to any check baggage or goods sustained during the
of contracts is to transport by air;
be performed entirely within the territory of the same State. (c) Delay in the transport by air of passengers, baggage or goods.
4. This Convention applies also to carriage as set out in Chapter V, subject to the The list is not exclusive.
terms
contained therein. VENUE IN THE FILING OF AN ACTION FOR VIOLATION OF A
CONTRACT OF INTERNATIONAL CARRIAGE
An action for damage must be brought at the option of the plaintiff, in the
territory of one of the High Contracting Parties, either before the court:
(a) of the DOMICILE of the carrier
(b) of his PRINCIPAL PLACE OF BUSINESS
(c) where the ticket was PURCHASED
(d) at the place of DESTINATION
126
Republic v. Lorenzo Shipping Corporation, G.R. No. 153563, February 7, 2005
37
REMEDIAL LAW
A passenger of an airline is bound by the terms of a passenger ticket declaring that the
The carrier is liable for damage sustained in the event of the destruction or loss limitations of liability set forth in the Warsaw Convention in case of loss, damage or
of, or damage destruction to a registered luggage of the passenger. The Warsaw Convention governs the
availment of the liability limitations where the baggage checked is combined with or
to, cargo upon condition only that the event which caused the damage so incorporated in the passenger ticket.
sustained took place during
the carriage by air.
LIABILITY FOR CHECKED BAGGAGE
2. However, the carrier is not liable if and to the extent it proves that the
GR: 250 francs per kilogram.
destruction, or loss of,
XPN: when the passenger or consignor has made, at the time when the package
or damage to, the cargo resulted from one or more of the following:
(a) inherent defect, quality or vice of that cargo; was handed over to the carrier, a SPECIAL DECLARATION of interest in
(b) defective packing of that cargo performed by a person other than the carrier delivery at destination and has paid a supplementary sum if the case so requires
or its
servants or agents; LIABILITY FOR HAND-CARRIED BAGGAGE
(c) an act of war or an armed conflict; Five thousand (5,000) francs per passenger
7 5,000 francs per passenger (Ibid.).
(d) an act of public authority carried out in connection with the entry, exit or NOTE: The above figures have been amended by the Guatemala Protocol, viz:
transit of the cargo. 1. Carriage of persons – One hundred thousand dollars ($100, 000)
2. Checked-in articles – One thousand dollars ($1,000)
3. Hand-carried baggage - One thousand dollars ($1,000)
According to Dean Eduardo Abella, the Guatemala Protocol has not yet been
ratified, so either of the two currencies is still correct.
38
EVIDENCE
4. If there was WAIVER on the part of the carrier; and intention to violate the law, or were in persistent disregard of one's rights. It must
5. If the carrier is ESTOPPED from invoking the provision on limit of liability be evidenced by a flagrantly or shamefully wrong or improper conduct.132
Carrier is not entitled to the foregoing limit if the damage is caused by willful
misconduct or default on its part (WC, Art. 25). Where the loss of the baggage of The act of the carrier in guessing which luggage contained the firearm constitutes
a passenger was due to the fault or recklessness of an airline company, the willful misconduct. The guessing of which luggage contained the firearms
limitation on the liability of airline companies under the Warsaw Convention is amounted to willful misconduct under Section 25(1) of the Warsaw
not applicable (Alitalia v. IAC, G.R. No. 71929, December 4, 1990). Convention.133
Stipulation relieving the carrier from or limiting its liability is not valid The allegation of willful misconduct resulting in a tort is insufficient to exclude
Any provision tending to relieve the carrier of liability or to fix a lower limit than the case from the realm of Warsaw Convention. A cause of action based on tort
that which is laid down in this Convention shall be null and void but the nullity did not bring the case outside the sphere of the Warsaw Convention. 134
There is no willful misconduct if the airplane was lost without a trace. In such case, no
of such provision does not involve the nullity of the whole contract (WC, Art. willful misconduct can be proved because if the airplane is lost without a trace, there is no
23). proof of the act or omission or the proximate cause of the accident.
WILLFUL MISCONDUCT
A carrier is not entitled to the limitation of liability if the damage is
caused by willful misconduct or default on its part.
The definition of "willful misconduct" depends in some measure on which court is deciding
the issue.
Some common factors that courts will consider are:
o Knowledge that an action will probably result in injury or damage
o Reckless disregard of the consequences of an action, or
o Deliberately failing to discharge a duty related to safety.
39