Transportation Law Syllabus Guide 2017

I. Obligations of a Common Carrier in a Contract of Carriage of Goods

1.) Primary Obligations of a Common carrier in the carriage of Goods (PASTE)
Deliver the goods to the proper Person (COC Art 358)
Duty to accept the Goods
Deliver seasonably the goods to the destination
Transport the goods safely to the agreed destination
Exercise Extraordinary Diligence

A. Duty to deliver the Goods

In the absence of a special contract, a carrier is not an insurer against delay in the
transportation of goods. When a common carrier undertakes to convey goods, the
law implies that they shall be delivered at the destination within a reasonable time,
in the absence of any agreement as to the time of delivery. But where the carrier
has made an express contract to transport and deliver the property within a
specified time, it is bound to fulfill its contract and is liable for any delay, no matter
from what cause it may have risen. (Saludo Jr. Vs. CA, G.R. No. 95536, March 23,
1992)

Effects of Delay:
1.) Excusable Delay
a.) Excusable delay in carriage merely suspends and generally does not
terminate the contract of carriage. When the cause is removed the master
must proceed with the voyage and make the delivery
b.) During the delay, the vessel continues to be liable as a common carrier and
remains duty bound to exercise extraordinary diligence

2.) Inexcusable Delay

a.) Carrier remains bound to exercise extraordinary Diligence
b.) Natural disaster shall not free carrier from liability
(Art 1740 NCC)
c.) Stipulation on limitation of liability shall not hold
(Art 1747 NCC)
d.) The carrier shall be liable for damages caused by the delay
(Code of Commerce Art 358; Saludo Jr. Vs Honorable Court of Appeals,
G.R. No. 95536, March 23, 1992)
e.) The Consignee may exercise his right to abandon
(Code of Commerce; Art 371)
ARTICLE 371 In case of delay through the fault of the carrier,
referred to in the preceding ARTICLEs, the consignee may leave
the goods transported in the hands of the former, advising him
thereof in writing before their arrival at the point of destination.

When this abandonment takes place, the carrier shall pay the full
value of the goods as if they had been lost or mislaid.

If the abandonment is not made, the indemnification for losses and

damages by reason of the delay cannot exceed the current price
which the goods transported would have had on the day and at the
place in which they should have been delivered; this same rule is
to be observed in all other cases in which this indemnity may be
due.

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B. Duty to Accept the Goods

General Rule: The common carrier that is granted a certificate of public

conveyance is duty bound to accept passengers or cargo without any
discrimination.

Factors to Consider in Reasonable Discrimination

a.) Suitability of vessel
b.) Reasonable possibility of danger based on the products form and
condition
c.) Nature of Carriers business
d.) Attendant circumstances affecting the question of reasonability for the
refusal of the transport (Fisher vs. Yangco, G.R. No. L-8095, March 31,
1915)

Instances when Carrier may validly refuse to accept goods

a.) The goods are dangerous objects, or substances including dynamites

and other explosives
b.) The goods will be exposed to untoward Danger like flood, capture by
enemies and the like.
c.) The Goods are unfit for transportation
d.) Acceptance would result in overloading
e.) Goods are considered Illegal or Contraband
f.) Goods are Injurious to Health
g.) Failure to tender goods on time
h.) Goods like livestock would be exposed to disease
i.) Strike

In cases for refusal on railroads

Carriers may refuse packages which appear unfit for transportation; and
if the carriage is to be made by railway, and the shipment is insisted upon,
the company shall transport them, being exempt from all responsibility if
its objections, is made to appear in the bill of lading. (Code of Commerce
Art 356)

Carriers may be granted the authority to carry goods that are by nature dangerous
or hazardous. A general refusal for all carriers to accept explosives would involve
many persons, firms and enterprises in utter ruin and would disastrously affect
the interest of the public and general welfare of the community. (Fisher Vs.
Yangco, G.R. No. L-8095, March 31, 1915)

C. Duty to Exercise Extraordinary Diligence

Common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligence in the vigilance
over the goods, according to all the circumstances of each case (Article
1733 NCC)

The duty to exercise extraordinary diligence starts from the time goods
are unconditionally placed in the possession of, and received by the carrier

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for transportation, until the same are delivered actually or constructively

by the carrier to the consignee or to the person who has the right to receive
them. (Article 1736 NCC)

Delivery of goods to the customs authorities is not delivery to the consignee (Lu
Do Vs. Binamira, G.R. No. L-9840, April 22, 1957)

The extraordinary liability of the common carrier continues to be

operative even during the time the goods are stored in a warehouse of the
carrier at the place of destination, until the consignee has been advised of
the arrival of the goods and has had reasonable opportunity thereafter to
remove them or otherwise dispose of them. (Article 1738 NCC)

The common carrier's duty to observe extraordinary diligence over the

goods remains in full force and effect even when they are temporarily
unloaded or stored in transit, unless the shipper or owner has made use of
the right of stoppage in transit. (Article 1737 NCC)

Prohibited Stipulations in a Contract of Carriage of Goods (Article 1745 NCC)

Any of the following or similar stipulations shall be considered

unreasonable, unjust and contrary to public policy

That the goods are transported at the risk of the owner or shipper;
That the common carrier will not be liable for any loss, destruction, or
deterioration of the goods;
That the common carrier need not observe any diligence in the custody
of the goods;
That the common carrier shall exercise a degree of diligence less than
that of a good father of a family, or of a man of ordinary prudence in
the vigilance over the movables transported;
That the common carrier shall not be responsible for the acts or
omission of his or its employees;
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;
That the common carrier is not responsible for the loss, destruction, or
deterioration of goods on account of the defective condition of the car,
vehicle, ship, airplane or other equipment used in the contract of
carriage.

II. Defenses of a Common Carrier in the Carriage of Goods

A. Force Majeure
Are extraordinary events not forseeable or avoidable, events that could not be
forseen, or though forseen, were inevitable. (Art 1174 NCC; Republic Vs. Luzon
Stevedoring Corporation, G.R. No. L-21749, September 29, 1967)

Requisites:
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a.) Impossible to foresee, although forseen unavoidable

b.) Failure to comply must be independent of the human will.
c.) Occurrence must render the obligor unable to comply with his
obligation in a normal matter
d.) The obligor must be free from any contribution or aggravation of the
injury resulting to the obligee. (Servando Vs. Philippine Steam Navigation,
G.R. No. L-36481-2, October 23, 1982)
e.) The Force majeure must be the only or proximate cause of the loss (Art
1739 NCC)
f.) Common carrier must exercise due diligence to lessen the damage or
injury before, during, or after the loss. (Art 1739 NCC)
g.) Common carrier must not have negligently incurred in delay. (Art 1740
NCC)

Mechanical Defects are not force Majeure if the same were discoverable by
regular and adequate inspections. The prevailing rule in this jurisdiction is that the
carrier is liable to its passengers for damages caused by mechanical defects of the
conveyance. For purposes of this Doctrine, the manufacturer is considered the
agent of the carrier. (Necesito Vs. Paras, G.R. No. L-10605 10606, June 30, 1958)

Tire Blow-Out is not considered as a fortuitous event. There are human factors
involved in the situation. (Yobido Vs. CA, G.R. No. 113003, October 17, 1997)

Heavy Rains are not considered Force Majeure, but normal occurrences that an
ocean vessel would encounter, (Eastern Shipping Lines Inc. Vs. IAC, G.R. No. 69044,
May 29, 1987)

Hijacking is not among the enumerated as an exempting circumstance. Thus the

common carrier is presumed to be at fault or to have acted negligently unless there
is proof of extraordinary diligence on the part of the common carrier.

A common carrier is held responsible even for the acts of strangers like thieves or
robbers except when thieves or robbers acted with grave or irresistible threat,
violence or force (De Guzman Vs. CA, G.R. No. L-47822, December 22, 1988)

B. Acts of Public Enemy

In General acceptance of the term presupposes the existence of an actual state of
war, and refers to the government of a foreign nation at war with the country to
which the carrier belongs, though not necessarily with that to which the owner of
the goods owes allegiance.

Requisites:
a.) Proximate cause of the loss
b.) Due Diligence, before, during, after loss to lessen loss
c.) Existence of an actual state of war

Thieves, rioters, robbers, insurrectionists are not in a legal sense public enemies,
to which the common carrier is answerable. Pirates of the high seas stand as an
exception to this rule because they are considered as enemies of all civilized
nations.

C. Negligence of the Shipper or Owner

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a.) Absolute defense when it is the sole and proximate cause.

b.) Partial defense when the same is contributory.

The Supreme Court held that when the private respondent did furnish the
petitioner with an inaccurate weight of the payloader, the common carrier is
nonetheless liable for the damage caused to the machinery which could have been
avoided by the exercise of reasonable skill and attention on its part in overseeing
the unloading of such heavy equipment. It was the duty of the Chief Officer to
determine the weight of the cargoes before accepting them. (Compana Maritima Vs.
CA, G.R. No. 31379, December 12, 1997)

D. Character of the Goods or Defects in the Packaging or in the Container

Even if the damage should be caused by the inherent defect/character of the
goods, the common carrier must exercise due diligence to forestall or lessen
the loss (Art 1742 NCC)

E. Order or Act of Public Authority

If through the order of public authority the goods are seized or destroyed, the
common carrier is not responsible, provided said public authority had power
to issue the order (Article 1743 NCC)

Defense is not available when:

a.) Public Authority has no authority to issue such subject order
b.) Public Authority exceeded its authority

F. Exercise of Extraordinary Diligence

The above cited 6 defenses is exclusive or a closed list, if not one of those
abovementioned is present, the carrier is liable. (Belgian Chartering and
Shipping, N.V. Vs. Phil. First Insurance Co., Inc. G.R. No. 143133, June 5, 2002)

Invalid Defenses:
a.) Explosion
b.) Worms & Rats
c.) Water Damage
d.) Barratry

III. Obligations of a Common Carrier in the Carriage of Passengers

1.) Duty to observe utmost diligence to Passenger

A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due
regard for all the circumstances. (Article 1755 NCC)

The carrier has the duty to stop their conveyances for a reasonable length of time in
order to afford passengers an opportunity to board and enter, and they are liable for
injuries suffered by boarding passengers resulting from the sudden starting up or
jerking of the conveyances. (Dangwa Transportation Co. Inc. Vs. CA G.R. No. 95582,
October 7, 1991)

The duty exists from the moment the person who purchased the ticket or token
presents himself at the proper place and in a proper manner to be transported, having
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the bona fide intention to use the facilities of the carrier. (Vda. De Nueca Vs. Manila
Railroad Co. C.A. No. 31731-R, January 30, 1968)

The duty of a common carrier to provide safety to its passengers so obligates it not
only during the course of the trip, but for so long as the passengers are within the
premises and where they ought to be in pursuance to the contract of carriage. (LRTA
Vs. Navidad, G.R. No. 145804, February 6, 2002)

When a passenger is carried gratuitously, a stipulation limiting the common

carrier's liability for negligence is valid, but not for willful acts or gross negligence.

The reduction of fare does not justify any limitation of the common carrier's liability.
(Article 1758 NCC)

2.) Duty to Bring in their Destination without Delay

If the interruption is due to fortuitous event, the passenger shall be obliged to
pay the fare in proportion to the distance covered, without right to recover for
loses and damages. If it be due to the disability of the vessel and a passenger
should agree to await for the repairs, he may not be required to pay any
increased price of passage but his living expenses during the stay shall be for
his account (Code of Commerce Art 689)

3.) Duty to take care of the Passengers Baggage and bags

Articles a passenger usually takes with him or his own personal use, comfort,
and convenience according to the habits or wants of the particular class to
which he belongs, either in reference to his immediate necessities or to the
ultimate purpose of his journey.

Inquiry may be made as to the nature of passengers baggage, but beyond this,
constitutional boundaries are already in danger of being transgressed. (Nocum Vs. Laguna
Tayabas Bus Co., G.R. L-23733, October 31, 1969)

Aircraft companies which operate as public utilities or operators of aircraft which are for
hire are authorized to open and investigate suspicious packages and cargoes in the
presence of the owner or shipper, or his authorized representatives if present; in order to
help the authorities in the enforcement of the provisions of this Act: Provided, That if the
owner, shipper or his representative refuses to have the same opened and inspected, the
airline or air carrier is authorized to refuse the loading thereof. (RA 6235 Section 8)

Hand Carried Baggage Checked In Baggage

Applicable Rules
Arts 1998, 2000 2003 NCC Arts 1733 1753 NCC
Necessary Deposit Considered as Goods
Good Father of a Family(Ordinary) Extraordinary Diligence

The deposit effects made by travelers in hotels or inns shall also be regarded as necessary.
The keepers of hotels or inns shall be responsible for them as depositories, provided that
notice was given to them, or their employees of the effects brought by the guests and that,
on the part of the latter, they take the precautions which said hotel keepers or their
substitutes advised relative to the care and vigilance of their effects. (Article 1998 NCC)

A deposit is necessary:

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(1) When it is made in compliance with a legal obligation;

(2) When it takes place on the occasion of any calamity, such as fire, storm, flood, pillage,
shipwreck, or other similar events. (Article 1996 NCC) refer to Negotiorum Gestio
and Quasi-Contract (Art 2168 NCC)

When during a fire, flood, storm, or other calamity, property is saved from destruction
by another person without the knowledge of the owner, the latter is bound to pay the
former just compensation (Article 2168 NCC)

Instances when a Common Carrier is not responsible for the loss or injury to the
passengers hand carry baggage.

a.) Force Majeure

b.) Acts of robbers and thieves who employ force and use of arms
c.) Loss due to passengers / his agents acts or if the loss was due to the nature or
character of things.

IV. Defenses of a Common Carrier in the carriage of Passengers

Exercise of Extraordinary Diligence

Force Majeure
Acts of Public Enemy
Act or omission of a passenger
Order or act of a competent authority

In case of death of or injuries to passengers, common carriers are presumed to

have been at fault or to have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed in articles 1733 and 1755 (Article
1756 NCC)

1.) Diligence in the Selection and Supervision of its Employees

General Rule:
Common carriers are liable for the death of or injuries to passengers through the
negligence or willful acts of the former's employees, although such employees may
have acted beyond the scope of their authority or in violation of the orders of the
common carriers.

This liability of the common carriers does not cease upon proof that they exercised all
the diligence of a good father of a family in the selection and supervision of their
employees. (Article 1759 NCC)

Exception to the Rule:

If the source of the obligation is under Article 2176 (Quasi Delict) the exercise of due
care and diligence in the selection and supervision of employees is available as a
defense. (Del Prado Vs. Manila Electric Co., G.R. No. 29462, March 7, 1929)

It is no defense that the employee acted beyond the scope of his authority because the
riding public is not expected to inquire from time to time, before they board the carrier,
whether or not the driver is acting within the scope of his authority and observing the
existing rules and regulations required of him by management. (Marchan Vs. Mendoza,
G.R. No. L-24471, April 30, 1966)

2.) Reasons for the Carriers Liability on the Acts of its Employees
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A. The special undertaking of the carrier is to furnish its passengers full measure
of protection through the exercise of the high degree of care prescribed by the
law, inter alia from violence and insults at the hands of strangers, other
passengers, and above all from the acts of the carriers own servants charged
with the passengers safety.

B. The liability of the carrier is the result of the carriers act of confiding in the
servants hands the performance of his contract to safely transport the
passenger, delegating therewith the duty of protecting the passenger with the
utmost care prescribed by law.

C. As between the carrier and the passenger, the former must bear the risk of
wrongful acts or negligence of the carriers employees against passengers,
since it, and not the passengers has power to select and remove them. (Maranan
Vs. Perez, G.R. No. L-22272. June 26, 1967)

The carrier is liable when its personnel allowed a passenger to drive the vehicle
causing it to collide with another vehicle resulting to the injuries suffered by the
other passengers. (MRR Vs. Ballesteros, G.R. No. L-19161, April 9, 1966)

When the crime was committed by a train guard who has no duties to discharge
in connection with the transportation of the victim, the crime stands on the same
footing as if committed by a stranger or co-passenger since the killing was not in
the line of duty. (Gillaco Vs. Manila Railroad, G.R. No. L-8034. November 18, 1955)

3.) Doctrine of Last Clear Chance

The doctrine of least clear chance states that where both parties are negligent but the
negligent act of one is appreciably later than that of the other, or where it is impossible
to determine whose fault or negligence caused the loss but failed to do so, is
chargeable with the loss. (PNR Vs. Brunty, G.R. No. 169891. November 2, 2006)

The doctrine of last clear chance is only applicable between two colliding vehicles
because the action is based on tort or quasi-delict under Article 2176 NCC.

A common carrier does not give its consent to become an insurer of any and all risks
to passengers and goods. It merely undertakes to perform certain duties to the public
as the law imposes, and holds itself liable for any breach thereof. (Pilapil Vs. CA, G.R.
No. 52159, December 22, 1989)

V. Extraordinary Diligence

Common Carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence in the vigilance over the
goods and for the safety of its passengers transported by them, according to all the
circumstances of each case

Common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligence in the vigilance
over the goods and for the safety of the passengers transported by them,
according to all the circumstances of each case.
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Such extraordinary diligence in the vigilance over the goods is further

expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the
extraordinary diligence for the safety of the passengers is further set forth
in articles 1755 and 1756 (Article 1733 NCC)
Justifiable Reasons
1.) From the nature of the business and for public policy
2.) Relationship of Trust
3.) Impressed with a special public duty
4.) Possession of the Goods
5.) Human Life

Extraordinary diligence is the rendition of service with the greatest skill and utmost
foresight, (Davao Stevedore Co. Vs. Fernandez, 54 O.G. no. 5, 1957)

The Extraordinary diligence in the vigilance over the goods tendered for shipment
requires the common carrier to know and to follow the required precaution for avoiding
damage to, or destruction of the goods entrusted to it for sale, carriage and delivery. It
requires common carriers to render service with the greatest skill and foresight and to use
all reasonable means to ascertain the nature and characteristic of goods tendered for
shipment, and to exercise due care in the handling and stowage, including such methods
as their nature requires. (Calvo Vs. UCPB G.R. No. 148496, March 19, 2002)

A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of every cautious persons, with a due
regard for all the circumstances. (Article 1755 NCC)

The extraordinary diligence is owed not only to the passengers or owners of cargo carried
by a common carrier but also to third persons. In the exercise of the standard
extraordinary diligence, the common carriers cannot help but simultaneously benefit
pedestrians and the owners and passengers of other vehicles who are equally entitled to
safe and convenient use of roads and highways. (Kapalaran Bus Line Vs. Coronado, G.R.
No. 85331, August 25, 1989)

Articles 1734 1754 of the New Civil Code (Vigilance over the Goods)
Articles 1755 1763 of the New Civil Code (Safety of Passengers)

1.) Stipulations on Limiting the Carriers Liability

A. Goods
i. Stipulation in Writing and signed by both parties
ii. Supported by a valuable consideration other than the service rendered
by the common carrier
iii. Reasonable and not Contrary to Law

A Contract of Carriage or Contract may be consensual but any stipulation must

always be in writing.

The same is not allowed for carriage of passengers.

B. Passengers

The responsibility of a common carrier for the safety of passengers as

required in articles 1733 and 1755 cannot be dispensed with or lessened by
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stipulation, by the posting of notices, by statements on tickets, or otherwise.

(Article 1757 NCC)

When a passenger is carried gratuitously, a stipulation limiting the common

carrier's liability for negligence is valid, but not for willful acts or gross
negligence. (Article 1758 NCC)

i. Gratuitous Passengers
When a passenger is carried without fee, a stipulation limiting the
carriers liability for negligence is valid, but not for willful acts of
negligence.

ii. Accommodation Passengers

The diligence owed to accommodation passengers is only ordinary
diligence. However it is not controlling to with respect to Common
Carriers. (Lara Vs. Valencia, G.R. No. 9907, June 30, 1958)

2.) Extraordinary Diligence on Carriage by Sea

A. Seaworthiness
The fitness of the vessel to withstand the rigors of the voyage
The fitness to store cargos and passengers
Adequately equipped with a competent crew

The carriers are deemed to warrant impliedly the seaworthiness of the ship. The failure of
a common carrier to maintain in seaworthy condition the vessel involved in its contract
of carriage is a clear breach of its duty prescribed in Article 1755 NCC (Caltex[Phils], Inc.
Vs. Sulpicio Lines, G.R. No. 131166, September 30, 1999)

The unseaworthiness can be established by fact that it did not withstand the natural and
inevitable action of the sea. (Loadstar Shipping Corp Vs. CA, supra)

In cases involving breach of contract of carriage, proof of violation of traffic rules confirms
that the carrier failed to exercise extraordinary diligence. Article 2185 of the New Civil
Code provides for a presumption of negligence in case the accident occurs while the
operator of the motor vehicle is violating traffic rules. (Marikina Auto Line Transport
Corp. Vs. People, G.R. No. 152040, March 31, 2006)

3.) Extraordinary Diligence in Air Transportation

A. Airworthiness
The fitness of the vessel to withstand the rigors of air travel
The aircrafts engines, propellers, and other components and
accessories are of proper design and construction and are safe
for navigation purposes
Adequately equipped with a competent crew

The carrier is duty bound to accept and board a passenger with confirmed tickets if the
passenger presents himself on time in the airline counter in the airport. There would be a
breach of contract on the part of the carrier if the employees will refuse to accept the
passenger with confirmed tickets. (Philippine Airlines Vs. CA, G.R. No. 123238, September
22, 2008)
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4.) Jurisprudence when Common Carrier failed to Exercise Extraordinary Diligence.

When the rear tire of the bus exploded, blasting a hole in the floor of the bus to which a
child fell through the hole. Even assuming that the tire blow-out was not due to oversight
in maintenance, the carrier was liable for failure to provide a safe floor in the bus. (M. Ruiz
Highway Transit, Inc. Vs. CA, G.R. No. L 16086, May 29, 1964)

The death and injuries to passengers was caused by the negligence of the driver of the bus
when he drove and operated the bus in a lane where overtaking is not allowed by traffic
rules and regulations. (Batangas Laguna Tayabas bus Company Vs. IAC G.R. No. 74387-
90, November 14, 1988)

Failure of the master of the vessel and his crew to take precautionary measures to avoid
possible and further deterioration of the cargo notwithstanding the deteriorated state of
the cargo noted on the Bill of Lading. (Belgian Overseas Chartering and Shipping N.V. Vs
Philippine First Insurance Co., Inc. G.R. No. 143133, June 5, 2002)

The playing of majhong by the captain of the vessel before and upto the time of collision
which constitutes unacceptable behavior on the part of the master of the vessel and the
carrying of more passengers than the vessel is certified to do so constitutes gross
negligence on the part of the vessel and its crew. (Mecenas Vs. CA, G.R. No. 88052, December
14, 1989)

By placing a person whose navigation skills are questionable at the helm of the vessel.
(Coastwise Lighterage Corp. Vs. CA, G.R. No. 88052, December 14, 1989)

When a plane did not take the designated route and the tragic crash could have been
avoided had it taken the route indicated. (Abeto Vs. Philippine Airlines Inc., G.R. No. L-
28692, July 30, 1982)

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