IPO DIR.

ESTRELLITA BELTRAN-ABELARDO : TRANSPORTATION LAW

A. Common Carriers
CONCEPT OF COMMON CARRIER
A common carrier is a person , corporation, firm or association engaged in the business of carrying or transporting of
passengers or goods or both by land, water or air for compensation, offering their services to the public
A common carrier is a person or corporation whose regular business is to carry passenger or property for all persons
who may choose to employ and to remember and to remunerate him.
A common carrier is one who holds himself out to the public as engaged in the business of transporting person or
property or news from place to place, for compensation, offering his services to the public generally.
The true nature of a common carrier is the carriage of passengers or goods, provided it has space, for all who opt
to avail themselves of its transportation service for a fee. A carrier which does not qualify under the above test is
deemed a PRIVATE CARRIER.
Certificate of Public Convenience is NOT a requisite for the incurring of liability under the Civil Code provisions
governing common carriers which liability arises from the moment a person or firms act as common carrier
without regard to whether or not such carrier has also complied with the requirements of the applicable
regulatory statute and implementing regulations and has been granted a certificate of public convenience or other
franchise.Registered owner of any vehicle is directly and primarily responsible to the public and third persons
while it is being operated and whether the driver is authorized or not by the actual owner is irrelevant to
determining the liability of the registered owner whom the law holds primarily and directly responsible for any
accident, injury or death caused by the operation of the vehicle in the streets and highways.
1. Diligence Required of Common Carriers over the goods and for the safety of passengers transported by them
Art. 1733. 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.
A. DILIGENCE REQUIRED OF COMMON CARRIERS TO CARRY PASSENGERS
Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using
the utmost diligence of very cautious persons, with a due regard for all the circumstances. (NCC)
Art. 1756. In case of death or injuries to passengers, common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed the extraordinary diligence prescribed in Articles 1733 and 1755.
Art. 1757. 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 stipulation of parties, by posting of notices, by statements on tickets
or otherwise.
EXTRAORDINARY DILIGENCE
Extraordinary Diligence is the rendition of service with the greatest skill and utmost foresight . (Davao Stevedore
Co. v. Fernandez, 54 OG No. 5, 1957)
EXTRAORDINARY DILIGENCE IN CARRYING PASSENGERS
The law requires common carriers to carry passengers safely using the utmost diligence of very cautious persons
with due regard for all circumstances. In case of death or injury to a passenger, a common carrier is presumed to
have been at fault or have been negligent. (Light Rail Transit Authority v. Natividad 383 SCRA 75 (2003))
B. DILIGENCE REQUIRED IN THE CARRIAGE OF GOODS
Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods,unless the same
is due to any of the following causes only :
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act of omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) (5) Order or act of competent public authority.
Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods are lost,
destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless
they prove that they observed extraordinary diligence as required in Article 1733 .
EXTRAORDINARY DILIGENCE OVER CARRIAGE OF GOODS
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 carriersto 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 v. UCPB, GR. No.
148496, March 19, 2002)
Extraordinary Diligence requires rendering service with the greatest skill and foresight to avoid damage and
destruction to the goods entrusted for carriage and delivery. Common carriers are presumed to have been at fault
or to have acted negligently for loss or damage to the goods that they have transported. (Lee Mer Industries, Inc. v.
Malayan Insurance Co., Inc. 2005)
2. Liabilities of common carriers
Nature of Contract of Carriage of Passengers-
The law requires common carriers to carry passengers safely using the utmost diligence of a very cautious
persons with due regard for all circumstances. In case of death or injury to a passenger, a common carrier is
presumed to have been at fault or have been negligent.
By the nature of its business and for reasons of public policy, a common carrier is bound to carry passengers safely
as far as human care and foresight can provide.
In an action for breach of contract of carriage, all that is required of plaintiff is to prove the existence of such
contract and its non-performance by the carrier through the latters failure to carry the passenger safely to his
destination.
Although initially the burden of proof was with the passenger to prove that there was a breach of contract of
carriage, the burden of evidence is shifted to the airline when the former adduced sufficient evidence to prove the
facts he had alleged.
In a contract of carriage, it is presumed that the common carrier was a fault or was negligent when a passenger
dies or is injured. Unless the presumption is rebutted, the court need not even make an express finding of fault or
negligence on the part of the common carrier.
CAUSES OF ACTION ARISING FROM THE SAME NEGLIGENT ACT
GIVEN: X, Inc. public utility Co.
Y- Bus driver, recklessly driving
Z- Passenger injured
Z the injured passenger can avail of any of the 3 causes of action:
(a) Culpa contractual negligence based on contract
(b) Culpa aquiliana - negligence based on tort, or
(c) Culpa criminal - negligence based on a crime
(a) CULPA CONTRACTUAL
In the contract or carriage of passengers, it is the obligation of carrier to convey the passengers safely to the point
of destination. In case the passenger is not brought safely thereto, there will be a breach of contract. Any case
will be captioned Passenger Z vs. X Inc. because the contract is between them. The driver is not included as he is
not a privy to the contract.
Light Rail Transit Authority v. Navidad
397 SCRA 75 (2003)
Under Culpa Contractual A common carrier becomes liable for the death or injury to passengers when:
(1) through the negligence or willful acts of its employees; or
(2) on account or willful acts or negligence of other passengers or of strangers if the common carriers employees
through the exercise of due diligence could have prevented or stopped the act or omission.
(b) CULPA AQUILIANA
Damage caused to another due to negligence. The case will be entitled Passenger Z v. X Inc. and Driver Y and
the defendants will be solidarily liable as joint tort-feasors.
(c) CULPA CRIMINAL
The drivers act may amount to a crime: reckless imprudence resulting in physical injuries. The case will be
entitled People v. Driver Y, and if the latter is convicted but is insolvent, an action can be pursued by Passenger
Z against X, Inc. to enforce the latters subsidiary liability.
The best evidence of a contract of carriage of passenger is the ticket.
Q, May there be a contract of carriage even without a ticket?
A: Yes . The Statute of Frauds cover six(6) contracts, none of which is a contract of transportation which means
that a contract of carriage may be oral.
A contract to common carriage of passenger consists of two aspects, namely;
a) Contracts to carry at some future time which contract is consensual and is necessarily perfected by mere consent
under Art. 1356 of the Civil Code;
b) Contract of carriage or of common carriage itself should be considered as a real contract for not until carrier is
actually used can carrier be said to have already assumed obligations of a carrier.
A carrier can be held liable for damages for failure to comply with the contract to carry which is consensual in
nature.
The obvious source of the liability of common carriers to the shipper or its passenger is contractual. Any suit
against the carrier will normally be based on a breach of contract. When the suit is based on this source of liability,
the plaintiff need not prove the negligence of the carrier. This negligence is presumed. (Art. 1735 and 1756, NCC)
The liability of a common carrier may also be anchored on quasi-delict if the liability originates from the
negligence of its employees. Under Art. 2180, an employer is liable for the acts of negligence of its employees.
Under Art. 2180, an employer is liable for the acts of negligence of its employees committed in the exercise of their
duties as such. The liability of the employer is its negligence in the selection and supervision of its employees.
Principles governing the liabilities of common carrier
1. The liability of a carrier is contractual and arises upon breach of its obligation. There is breach if it fails to exert
extraordinary diligence according to the circumstances or each case;
2. A carrier is obliged to carry its passenger with the utmost diligence of a very cautious person, having due regard for
all the circumstances;
3. in case of death of, or injury to, passengers, it being its duty to prove that it exercised extraordinary diligence; and
4. The carrier is not an insurer against all risks of travel. (Isaac v. A.L. Ammen Transportation, G.R. No. L-9671,
August 23, 1957)
5. In case of death or injury, a carrier is presumed to be at fault or to have acted negligently
Statutory Obligations of Carrier-
Art 1755 of Civil Code obliges the carrier to carry passengers safely as far as human care and foresight can
provide. It is supposed to do so by using the utmost diligence of very cautious persons with due regard for all the
circumstances . In case of death or injuries to passengers, it is presumed to have been at fault or to have acted
negligently, unless it proves that it observed extraordinary diligence as prescribed in Arts. 1733 and 1755 of Civil
code.
A common carrier by the nature of its business and for reasons of public policy is bound to carry passengers
safely as far as human care and foresight can provide. It is supposed to do so by using the utmost diligence of
very cautious persons with due regard for all the circumstances. In case of death or injuries to passengers, it is
presumed to have been at fault or to have acted negligently, unless it proves that it observed extraordinary
diligence as prescribed in Arts. 1733 and 1755 of the Civil Code.
Upon the happening of the accident, the presumption of negligence at once arises and it becomes the duty of a
common carrier to overcome such presumption of negligence. The carrier must show:
(a) The utmost diligence of a very cautious persons as far as human care and foresight can provide; or
(b) That the accident was caused by fortuitous event.(Tiu v. Arriesgado, 437 SCRA 426(2004).
The explosion of a new tire cannot by itself be considered a fortuitous event to exempt the common carrier from
liability in the absence of showing on the part of the carrier that other human factors that could have intervened
to cause the blowout of the new tire did not in fact occur. Moreover, a common carrier may not be absolved from
liability in case of force majeure or fortuitous alone, it must still prove that it was not negligent in causing the
death or injury resulting from an accident (Yobido v. CA, 201 SCRA 1)
Drivers of vehicles who bump the rear of another vehicle must be presumed to be the cause of the accident, unless
contradicted by other evidence, since the rear driver is deemed to have the last clear chance of avoiding the and
therefore deemed negligent.(Raynera v. Hiceta, 306 SCRA 102)
Under Art. 2185 of the Civil Code, unless there is proof to the contrary, it is presumed that a person driving a
motor vehicle has been negligent if at the time of mishap he was violating a traffic regulation such as when he was
driving at the wrong side of the road.(Mallari Sr. v CA, 324 SCRA 147)
The negligence and recklessness of a jeepney driver is binding against the owner thereof, and in the action based
on contract of carriage , the court need not make an express finding of fault or negligence on the part of the carrier
in order to hold it responsible for payment of damages sought by the passenger since under-
a) Art. 1755 of the Civil Code, the common carrier is bound to carry the passengers safely
b) Art 1756 in case of death or injury of passenger, the common carrier is presumed to have been at fault or to
have acted negligently, and
c) Art. 1759, a common carrier is liable for death or injury to, passenger s through the negligence or willful acts
of employees and such liability of common carrier does not cease upon proof that it exercised all the diligence of a
good father of a family in the selection of its employees. (Mallari v. CA 324 SCRA 147)
Where a common carrier accepts its passengers baggage for transportation and even had it placed in the vehicle
by its own employees , its failure to collect freight charges is the common carriers own lookout and cannot be
used to exempt the common carrier from liability for the consequent loss of the baggage.(Sarkies Tours Phil v.CA
280 SCRA 58)
Although the baggage of a passenger was eventually delivered to him, that did not constitute a case of mere delay
in delivery since the baggage was not delivered at all to the passenger for the purpose of the trip in contravention
of a common carriers undertaking to transport the goods from the place of embarkation to the ultimate point of
destination. The non-delivery of luggage during the entire length of passengers stay abroad is a breach of
carriers obligation.(Phil Airlines v.IAC, 215 SCRA 334)
Due diligence in the selection and supervision of employees-
For a bus company, due diligence in selection of employees is not satisfied by finding that the applicant possessed
a professional drivers license. The employer should also examine the applicant for his qualifications, experience
and record of service. Due diligence in supervision, on the other hand, requires the formulation of rules and
regulations for the guidance of employees and the issuance of proper instructions as well as actual
implementation and monitoring of consistent compliance with the rules.(Fabre v. CA 259 SCRA 426)
Coverage of Fortuitous Event
A fortuitous event covers not only acts of God(lightning, earthquakes, shipwreck, etc.) but also acts of man(war,
strikes, homicide, recklessness of other drivers, latent mechanical defect, etc) If a fortuitous event is proved, the
carrier is absolved from liability. But the fortuitous event must not concur with negligence, otherwise , it is no
longer a defense. In other words, fortuitous event must be the sole element relied upon.
A fortuitous event is possessed of the following characteristics:
(a) the cause of the unforeseen and unexpected occurrence or failure of debtor to comply with the obligations
must be independent of human will
(b) it must be impossible to foresee the event which constitute caso fortuito
(c) Occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal
manner; and
(d) Obligor must be free from any participation in aggravation of the injury resulting to the creditor
Based on the foregoing, a bus company cannot be exempted from liability from a tire blowout which cannot be
classified simply as a fortuitous event in the absence of showing that it has exercised the extraordinary diligence
required of common carrier under the law. (Yobido v. CA 281 SCRA 1)
The act of passenger stabbing another passenger in the bus is considered as force majeure. However, to be
absolved from liability in the case of force majeure, the common carrier must still prove that it was not negligent
in causing the injuries resulting from such accident otherwise, it would still be held liable, (Bachelor Express, Inc.
v. CA, 188 SCRA 216)
Contributory Negligence of Passengers is governed by Art. 1762 of the Civil Code which provides that it does not
bar recovery of damages for his death or injury if the proximate cause thereof is the negligence of the common
carrier but the amount of damages shall be equitably reduced
Art. 1733 of the Civil Code requires common carriers in carriage of goods to observe extraordinary care in the
vigilance over the goods. The rule remains basically unchanged even when the contract is breached by tort
although non-contradictory principles on quasi delict may then be assimilated as also forming part of the
governing law.(Sabena Belgian World Airlines v. Cam 255 SCRA 38)
DOCTRINE OF LAST CLEAR CHANCE
Under the doctrine of last clear chance, 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, the one who had the last clear opportunity to avoid the loss but failed to do so, is chargeable with the
loss.
Stated differently, the antecedent negligence of plaintiff does not preclude him from recovering damages caused
by the supervening negligence of defendant who had the last fair chance to prevent the impending harmby the
exercise of due diligence (PNR v, Brunty 506 SCRA 685)
The principle of last clear chance is applicable only in a suit between the owners and drivers of colliding
vehicles(ie. In cases of quasi delict). It does not arise where a passenger demands responsibility from the carrier
to enforce its contractual obligations(culpa contractual) for it would be inequitable to exempt the negligent driver
and its owner on the ground that the other driver was likewise guilty of negligence.(Tiu v. Arriesgado 437 SCRA
426)
KABIT SYSTEM
The kabit system is an arrangement whereby a person who has been granted a certificate of public convenience
allows other persons who own motor vehicles to operate them under his license for a fee or percentage of earning.
Although the parties to this agreement are not penalized by law, it is invariably recognized as being contrary to
public policy and therefore void and inexistent under Art. 1409 of the Civil Code.
Regardless of who is the actual owner of a motor vehicle, the registered owner is the operator of the same with
respect to the public and third person and as such directly and primarily responsible for the consequences of its
operation. Legally the owner/operator of record is the employer of the driver with actual operator/employer
being considered merely as his agent (First Malayan Leasing v CA 209 SCRA 660)
Although registered owner is always liable , nevertheless the actual operator can be held solidarily liable with the
owner as joint tort-feasors.(Jereos v. CA 117 SCRA 795)
An employer-employee relationship shall be deemed to exist between a jeepney owner and a driver under a
boundary system arrangement . The features which characterize the boundary system namely-
(a) The driver does not receive a fixed wage but gets only the excess of the amount of fares collected by him
over the amount he pays to the jeep owner
(b) The gasoline consumed by the jeep is for the account of the driver are not sufficient to withdraw the
relationship from that of employer and employee. Consequently the jeepney owner is subsidiary liable as employer
under Art. 103 of the Revised Penal Code. (Magboo v. Bernardo 7 SCRA 952)
Although Art. 349 of the Code of Commerce only covers transportation on land and water, it had been held to also
cover transportation through the air.
Under Art. 1732 of the Civil Code, carrying or transporting passengers or goods or both by air has been
expressly included in the definition of a common carrier.
When an airline company issues a ticket to a passenger confirmed for a particular flight on a certain date, a
contract of carriage arises. The passenger then has every right to expect that he be transported on that flight and
on that date . If he does not, then the carrier opens itself to a suit for breach of contract of carriage. (Singapore
Airlines Ltd. v. Fernandez, 417 SCRA 474)
The nature of an airlines contract of carriage partakes of two types namely:
(a) contract to deliver cargo or merchandise to its destination, and
(b) contract to transport passengers to their destination
A business intended to serve the traveling public primarily is imbued with public interest hence, the law
governing common carriers imposes an exacting standard, neglect or malfeasance by the carriers employees
could predictably furnish bases for an action for damages. (British Airway v. CA 285 SCRA 450)
A contract of carriage is imbued with public interest and requires common carrier to carry passengers safely as
far as human care and foresight can provide, using utmost diligence of very cautious persons with due regard for
all circumstances(PAL v CA 226 SCRA 423)
Neglect or malfeasance of the carriers employees naturally give ground or an action for damages against the
common carrier. Moral damages are recoverable in a damage suit predicated upon a breach of contract of
carriage only where-
(a) the mishap results in the death of a passenger; and
(b) it is proven that the carrier was guilty of fraud and bad faith even if death does not result. (Morris v
CA352 SCRA426)
IPO DIR. ESTRELLITA BELTRAN-ABELARDO : TRANSPORTATION LAW
B. Vigilance over Goods
1. Exempting Causes
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.
Art. 1739. In order that the common carrier may be exempted from responsibility, the natural disaster must have
been the proximate and only cause of the loss. However, the common carrier must exercise due diligence to prevent
or minimize loss before, during and after the occurrence of flood, storm or other natural disaster in order that the
common carrier may be exempted from liability for the loss, destruction, or deterioration of the goods . The same
duty is incumbent upon the common carrier in case of an act of the public enemy referred to in Article 1734, No. 2.
Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods,unless the same is due
to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act of omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority
a. Requirement of Absence of Negligence
Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article (Art. 1734), if the
goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence as required in Article 1733.
Q. When can a common carrier raise the defense of FORTUITOUS EVENT to escape liability?
The following requisites must be present:
1. The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation
must be independent of the human will
2. It must be impossible to foresee the event which constitutes the caso fortuito or if it can be foreseen, it must be
impossible to avoid;
3. The occurrence must be of such as to render it impossible for the debtor to fulfil his obligation in a normal manner;
and
4. The obligor (debtor) must be free from any participation in or the aggravation of the injury resulting to the creditor.
(Servando v. Philippine Steam Navigation, G.R. No. L-36481-2, October 23, 1982)
A fortuitous event covers not only acts of God but also acts of man. If a fortuitous event is proved, the carrier is
absolved from liability. But the fortuitous event must not concur with negligence, otherwise, it is no longer a
defense. In other words, the fortuitous event must be the sole element relied upon.
b. Absence of Delay
Art. 1740. If the common carrier negligently incurs in delay in transporting the goods, a natural disaster shall not
free such carrier from responsibility.
According to Article 1747 of the NCC, if delay is without just cause, the contract limiting the common carriers
liability cannot be availed of in case of loss or deterioration of the goods. Thus, if there is an absence of delay, the
contract limiting the liability of the common carrier can be invoked.
Effect of negligently incurring delay
If the common carrier negligently incurs in delay in transporting the goods, a natural disaster shall not free such carrier
from responsibility.
Effect of Delay on account of Strikes or Riots
An agreement limiting the common carriers liability for delay on account of strikes or riots is valid . (Art. 1748,
NCC)
c. Due Diligence to Prevent or Lessen the Loss
Art. 1742. Even if the loss, destruction, or deterioration of the goods should be caused by the character of the goods,
or the faulty nature of the packing or of the containers, the common carrier must exercise due diligence to forestall
or lessen the loss.
Q, Should the common carrier still exercise due diligence to prevent or lessen loss even if there is a fortuitous event?
YES. The common carrier must exercise due diligence to prevent or minimize loss before, during and after the
occurrence of flood, storm or other natural disaster in order that the common carrier may be exempted from
liability for the loss, destruction, or deterioration of the goods. The same duty is incumbent upon the common carrier
in case of an act of the public enemy
Even if the fire were to be considered a natural disaster within the meaning of Article 1734 of the Civil Code, it is
required under Article 1739 of the same Code that the natural disaster must have been the proximate and only cause
and that thecommon carrier must exercise due diligence to prevent or minimize the loss before, during or after the
occurrence of the disaster. (Eastern Shipping Lines, Inc. v. IAC, 150 SCRA 463)
2. Contributory Negligence
Art. 1741. If the shipper or owner merely contributed to the loss, destruction or deterioration of the goods, the
proximate cause thereof being the negligence of the common carrier, the latter shall be liable in damages, which
however, shall be equitably reduced.
Art. 1743. 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.
Q. What is the effect of contributory negligence of the shipper or owner of the goods?
If the shipper or owner merely contributed to the loss, destruction or deterioration of the goods, the proximate
cause thereof being the negligence of the common carrier, the latter shall be liable in damages, which however,
shall be equitably reduced. (Art 1741, NCC)
However, the carrier may be able to prove that the only cause of the loss of the goods is any of the following acts of
the shipper:
a. Failure of the shipper to disclose the nature of the goods;
b. Improper marking or direction as to destination; and
c. Improper loading when he assumed such responsibility.
Compania Maritima v. CA 164 SCRA 685
While the act of Concepcion in furnishing petitioner with an inaccurate weight of the payloader cannot successfully be
used as an excuse by petitioner to avoid liability for the damage thus caused, said act constitutes a contributory
circumstance to the damage caused on the payloader, which mitigates the liability for damages of petitioner in accordance
with Article 1741 of the Civil Code.
Contributory Negligence of Passengers
This is governed by Art. 1762 of the Civil Code which provides that it does not bar recovery of damages for his
death or injury if the proximate cause thereof is the negligence of the common carrier, but the amount of damages
shall be equitably reduced.
Estacion v. Bernardo
483 SCRA 222 (2006)
Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he
has suffered, which falls below the standard to which he is required to conform for his own protection. But even in
a situation where a person has contributed to his own injuries, it must nevertheless be shown that he performed an
act that brought about his injuries in disregard of warnings or signs of an impending danger to health and
body. The passengers act of hanging on the vehicle is definitely dangerous to his life and limb. Nonetheless, the
underlying precept of the article on contributory negligence is that the plaintiff who is partly responsible for his own
injury should not be entitled to recover damages in full but must bear part of the consequences of his own negligence.
THE TEST FOR DETERMINING WHETHER A PARTY IS A COMMON CARRIER OF GOODS IS THAT-
a. He must be engaged in the business of carrying goods for others as a public employment and must hold himself out as
ready to engage in transportation of goods for person generally as a business and NOT as a casual occupation.
b. He must undertake to carry goods of the kind to which the business is confined
c. He must undertake to carry goods of the kind to which his business is conducted and over his established road; and
d. The transportation must be for hire.
It is essential to establish whether the contract of carriage as a common carrier or a private carrier since the
resolution of this preliminary question determines
a. the law applicable to the case
b. standard of diligence required of the carrier, and
c. the burden of proof applicable to the case
3. Duration of Liability
a. Delivery of Goods to Common Carrier
Art. 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed
in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively,
by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of
Article 1738.
Compania Maritime v. Insurance Co. of North America
G.R. No. L-18965, October 30, 1964
There was a complete contract of carriage the consummation of which has already begun when the shipper delivered the
cargo to the carrier and the latter took possession of the same by placing it on a lighter manned by its authorized
employees, under which Macleod became entitled to the privilege secured to him by law. The responsibility of the carrier
commenced on the actual delivery to, or receipt by, the carrier or its authorized agent, of the goods. The barges or lighters
were merely employed as the first step of the voyage.
Lu Do v. Binamira, 101 Phil 120
While delivery of the cargo to the customs authorities is not delivery to the consignee or to the person who has the right to
receive them as contemplated in Article 1736, NCC 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 have still to go through inspection of the customs authorities before they are actually
turned over to the consignee.
b. Actual or Constructive Delivery
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 the carrier for the purpose of their immediate transportation and the carrier has
accepted them. When such delivery has thus been accepted by the carrier, the liability of the carrier commences eo
instant (Saludo v. CA, G.R. No. 95536, March 23, 1992)
The carrier may be relieved of the responsibility for loss or damage to the goods upon actual or constructive
delivery of the same by the carrier to the consignee, or to the person who has a right to receive them. There is actual
delivery in contracts for the transport of goods when possession has been turned over to the consignee or to his duly
authorized agent and a reasonable time is given him to remove the goods. (Samar Mining Co., Inc. v. Lloyd, 132 SCRA
535)
Notice of the arrival and the consignee fails to claim the goods after the lapse of a reasonable period, there will be
constructive delivery. If the consignee still fails to take delivery, from that point on, the contract between the carrier and
the consignee will no longer be a contract of carriage but a contract of deposit. Therefore, the carrier is no longer required
to exercise extraordinary diligence, but only due diligence of a good father of a family.
c.Temporary Unloading or Storage
Art. 1737. 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 transitu.
Art. 1738. The extraordinary liability of the common carrier continues to be operative even during the time the
goods are stored in a warehouse of the carrier at the place of destination, until the consignee has been advised of
the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of
them.
Remembering the law on sales, the right of stoppage in transit is one of the rights of an unpaid seller when he has
parted with the goods and the buyer becomes insolvent. The effect of exercising the right of stoppage in transit is that
unpaid seller is entitled to the possession of the goods as if he had never parted with it. Thus, the responsibility of the
common carrier is reduced to a mere bailee or depository.
4. Stipulation for Limitation of Liability
Art. 1744. A stipulation between the common carrier and the shipper or owner limiting the liability of the former
for the loss, destruction, or deterioration of the goods to a degree less than extraordinary diligence shall be valid,
provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the service rendered by the common carrier; and
(3) Reasonable, just and not contrary to public policy.
a. Void Stipulations
Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to
public policy:
(1) That the goods are transported at the risk of the owner or shipper;
(2) That the common carrier will not be liable for any loss, destruction, or deterioration of the goods;
(3) That the common carrier need not observe any diligence in the custody of the goods;
(4) That the common carrier shall exercise a degree of diligence less than that of a good father of a family, or of a
man of ordinary prudence in the vigilance over the movables transported;
(5) That the common carrier shall not be responsible for the acts or omission of his or its employees;
(6) That the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave or
irresistible threat, violence or force, is dispensed with or diminished;
(7) That the common carrier is not responsible for the loss, destruction, or deterioration of goods on account of
the defective condition of the car, vehicle, ship, airplane or other equipment used in the contract of carriage.
b. Limitation of Liability to Fixed Amount
Art. 1749. A stipulation that the common carrier's liability is limited to the value of the goods appearing in the bill
of lading, unless the shipper or owner declares a greater value, is binding.
Art. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or
deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and
freely agreed upon.
Q. Does the limitation on the liability of the common carrier remove the disputable presumption of negligence on its part?
No. Even when there is an agreement limiting the liability of the common carrier in the vigilance over the goods, the
common carrier is disputably presumed to have been negligent in case of their loss, destruction or deterioration. (Art.
1752, NCC)
Q. What happens when the common carrier refused to carry the goods of the shipper?
The agreement limiting the common carriers liability may be annulled by the shipper or owner if the common
carrier refused to carry the goods unless the former agreed to such stipulation. (Art. 1746, NCC)
Citadel Lines, Inc. v. CA, 184 SCRA 544
Basic is the rule, long since enshrined as a statutory provision that a stipulation limiting the liability of the carrier to the
value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding. Further,
a contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction or deterioration of the
goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon.
c. Limitation of Liability in Absence of Declaration of Greater Value
Three kinds of stipulations have often been made in a bill of lading.
1. One exempting the carrier from any and all liability for loss or damage occasioned by its own negligence.(INVALID)
2. One providing for an unqualified limitation of such liability to an agreed valuation.(INVALID)
3. One limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a
higher rate of freight.(VALID AND ENFORCEABLE)
According to an almost uniform weight of authority, the first and second kind of stipulation ARE INVALID as being
contrary to public policy, but the third is VALID and ENFORCEABLE. The first and second stipulations in a bill of
lading are invalid which either exempt the carrier from liability for loss or damage occasioned by its negligence, or
provide for an unqualified limitation of such liability to an agreed valuation. The third stipulation in a bill of lading
limiting the liability of the carrier to a certain amount unless the shipper declares a higher value or pays a higher rate of
freight, is valid and enforceable.
H.E. Heacock Co. v. Macondray & Co., 42 Phil 205
If a common carrier gives to a shipper the choice of two rates, the lower rate conditioned upon his agreeing to a stipulated
valuation of his property in case of loss, even by the carriers negligence, if the shipper makes such a choice,
understandingly and freely, and names his valuation, he cannot thereafter recover more than the value which he thus
places upon his property
5. Liability for Baggage of Passengers (Art.22, as amended by Guatemala Protocol, 1971; Alitalia vs. IAC)
a. Checked-In Baggage
General Rule: $20 per kilogram
Exception: In case of special declaration of value and payment of a supplementary sum by consignor, carrier is liable to
not more than the declared sum unless it proves the sum is greater than actual value.
Where the baggage is under the custody of the carrier or its employees the provisions of Articles 1733 to 1753 of the NCC
shall apply. This means that the liability shall be governed by the provisions on common carriers.
What is the responsibility of the common carrier with respect to checked-in baggage?
The provisions of Articles 1733 to 1753 shall apply to the passengers baggage which is not in his personal custody or in
that of his employee (Art. 1754, NCC). Thus, the checked-in baggage shall be treated as goods subject to carriage.
b. Baggage in Possession of Passengers
$1000/passenger
Warsaw Convention does not operate as an exclusive enumeration of the instances of an absolute limit of the extent of
liability. It does not preclude the application of the Civil Code and other pertinent local laws. It does not regulate or
exclude liability for other breaches of contract by the carrier, or misconduct of its employees, or for some particular or
exceptional type of damage. (Alitalia vs. CA)
Where the baggage is under the custody of the passenger, the rules governing the responsibility of hotel-keepers shall
apply. These rules are those found in Arts. 1998, 200-2003, NCC. These rules are those governing necessary deposits. The
carrier shall be like a hotel-keeper with respect to those under the custody of the passenger. The common carrier shall be
responsible for the baggage as a depositary as long as the carrier was given notice of the presence of the baggage brought
by the passenger and also provided that the passenger had observed the precautions which the carrier advised the
passenger to undertake as to the care and vigilance over the baggage. Liability of the carrier will not attach if such
requirements of notice and/or precautions are not met.
Hand carried baggage is not considered as goods but as necessary deposit.

IPO DIR. ESTRELLITA BELTRAN-ABELARDO : TRANSPORTATION LAW

C. Safety of Passengers
Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.
Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733
and 1755.
Art. 1757. 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 stipulation, by the posting of notices, by statements on tickets, or
otherwise.
Art. 1758. When a passenger is carried gratuitously, a stipulation limiting the common carrier's liability for
negligence is valid, but not for wilful acts or gross negligence.
The reduction of fare does not justify any limitation of the common carrier's liability.
Art. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or wilful
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.
Art. 1761. The passenger must observe the diligence of a good father of a family to avoid injury to himself.
Art. 1762. The contributory negligence of the passenger does not take away the carriers responsibility although its
liability is mitigated by the passengers contributory negligence
Art. 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or
negligence of other passengers or of strangers, if the common carrier's employees through the exercise of the
diligence of a good father of a family could have prevented or stopped the act or omission.
Light Rail Transit Authority v. Navidad
G.R. No. 145804, 397 SCRA 75
A common carrier is bound to carry passenger safely as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with due regard for all circumstances. Such duty of a common carrier to provide safety
to its passenger obligates it not only during the course of the trip but for as long as the passengers are within its premises
and where they ought to be in pursuance to the contract of carriage.
Singapore Airline Limited vs. Fernandez
417 SCRA 474
In case of death or injuries to passengers, the presumption is that the common carrier is liable. In an action for breach of
contract of carriage, the aggrieved party does not have to prove that the common carrier was at fault or was negligent. All
that is necessary to prove is the existence of the contract and the fact of its non-performance by the carrier.
1. Void Stipulations
Carriage of Goods Carriage of Passengers
1. That the goods are transported at the risk of the Dispensing with or lessening the extraordinary
owner or shipper; responsibility of a common carrier for the safety of
2. That the carrier will not be liable for any loss, passengers imposed by law by stipulation, by
destruction or deterioration of the goods; posting of notices, by statements on tickets or
3. That the carrier need not observe any diligence otherwise. (Art. 1757)
in the custody of the goods;
4. That the carrier shall exercise a degree of
diligence less than that of a good father of a family
over the movable transported;
5. That the carrier shall not be responsible for the
acts or omissions of his or its employees;
6. That the carriers liability for acts committed by
thieves or robbers who do not act with grave or
irresistible threat, violence or force is dispensed
with or diminished;
7. That the carrier is not responsible for the loss,
destruction or deterioration of the goods on account
of the defective condition of the car, vehicle, ship
or other equivalent used in the contract of carriage.
(Art. 1745)
The responsibility of a common carrier for the safety of passengers are required in Articles 1733 and 1755 cannot be
dispensed with or lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise.
While it is true that a passengers ticket is a complete contract between the common carrier and the passenger, the
fact that it contains provision at the back thereof in fine letters that common carrier will only exercise ordinary
diligence is contrary to Law.
2. Duration of Liability
a. Waiting for Carrier or Boarding of Carrier
When the bus is not in motion there is no necessity for a person who wants to ride the same signal his intention to board.
A public utility bus, once it stops, is in effect making a continuous offer to bus riders. Hence, it becomes the duty of
the driver and the conductor, every time the bus stops, to do no act that would have the effect of increasing the
peril to a passenger while he is attempting to board the same. The premature acceleration of the bus in this case was a
breach of such duty.
It is the duty of common carriers of passengers, including common carriers by railroad train, streetcar or
motorbus, to stop their conveyances to 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 their conveyances while they are doing so.
It is not negligence per se, or as a matter of law, for one attempting to board a train or streetcar which is moving slowly.
An ordinarily prudent person would have made the attempt to board the moving conveyance under the same or similar
circumstances. The fact that passengers board and alight from slowly moving vehicle is a matter of common experience
both the driver and conductor in this case could not have been unaware of such an ordinary practice.
Jesusa Vda de Nueca, et al v. The Manila Railroad
Company CA-No. 31731, 1968
The duty of the common carrier 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 the bona fide intention to use the
facilities of the carrier.
Dangwa Transportation Co. vs. CA, 202 SCRA 574
The victim in this case, by stepping and standing on the platform of the bus, is already considered a passenger and
is entitled all the rights and protection pertaining to such a contractual relation. Hence, it has been held that the
duty which the carrier owes to its patrons extends to persons boarding cars as well as to those alighting therefrom
LRTA vs. Navidad
G.R. No. 145804, 397 SCRA 75
When the victim entered the LRT station after having purchased a token and he fell from the platform while
waiting for the trainand was struck by a train which was coming at the exact time he fell, the victim should be
treated as passenger. His standing on the platform while waiting for the train was where he was supposed to be.
b. Arrival at Destination
- 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 its premises and where they ought to be in pursuance to the
contract of carriage. (LRTA v. Navidad, 2003)
All persons who remain on the premises within an reasonable time after leaving the conveyance are to be deemed
passengers, and what is a reasonable time or a reasonable delay within this rule is to be determined from all the
circumstances, and includes a reasonable time to see after his baggage and prepare for his departure. (La Mallorca v. CA,
17 SCRA 739; Aboitiz Shipping Corp. v. CA, 179 SCRA 95)
It is the duty of common carriers of passengers to stop their conveyances a reasonable length of time in order to
afford passengers an opportunity to enter, and they are liable for injuries suffered from the sudden starting up or
jerking of their conveyances while doing so. The duty which the carrier of passengers owes to its patrons extends
to persons boarding the cars as well as to those alighting therefrom (Dangwa Trans Co., Inc. vs. CA 202 SCRA 574)
The duty of a common carrier to provide safety to its passengers so obligates it is not only during the course of the
trip, but for so long as the passengers are within its premises and where they ought to be in pursuance to the
contract of carriage (LRTA v. Navidad, G.R. No. 145804, February 6, 2002)
3. Liability for Acts of Others
Art. 1762. The contributory negligence of the passenger does not bar recovery of damages for his death or injuries,
if the proximate cause thereof is the negligence of the common carrier, but the amount of damages shall be
equitably reduced
a. Employees
- Whenever an employees negligence causes damage or injury to another, there instantly arises a presumption, juris
tantum, that the employer failed to exercise diligentissimi patris families in the selection or supervision of its employees.
To avoid liability for a quasi-delict committed by his employee, an employer must overcome the presumption by
presenting convincing proof that he exercised the care and diligence of a good father of a family in the selection and
supervision of his employee. Bare allegations, unsubstantiated by evidence, are not equivalent to proof. (Real vs. Belo 513
SCRA 111, January 26, 2007)
- A carrier maybe sued based on a tort or a quasi-delict the act that breaks the contract may also be a tort,
although the relationship of passenger and carrier is contractual both in origin and nature(Air france vs.
Carrascoso, 18 SCRA 155)
The principle in Air France is more easily understood in a common carrier situation. Assume that a bus filled with
passengers fell into an embankment because of the negligence of the bus driver, an employee of the carrier. X, a
passenger was severely injured as a result of the accident. There is no doubt that X can sue the bus company for
breach of contract of carriage because of the existing contractual relationship between X and the bus company.
May X also sue the bus company based on a quasi-delict? YES. Under Art. 2180 of the NCC, employers are liable
for the negligent acts of its employees. When X sues the bus company, it is not suing it based on the contract of
carriage on its failure to bring X safely to his destination. Instead, it is suing the carrier on its negligence in the
selection and supervision of its driver.
Q. Can a common carrier limit its liability by posting notices or statements on the tickets?
NO. The common carriers responsibility prescribed by the law cannot be eliminated or limited by stipulation, by
the posting of notices, by statements on the tickets or otherwise. (Art. 1763, NCC)
Q. Can common carriers raise as a defense diligence of a good father of a family in the selection and supervision of
employees?
NO. This liability of the common carriers does not cease upon proof that they exercised all they exercised all the
diligence of a good father of a family in the selection and supervision of their employees. (Art. 1759, NCC)
Q. What is the recourse of the common carrier which paid damages due to the negligence or wilful acts of its employees?
The carriers only recourse is to recover what it has paid from its negligent employee (Philtranco v. CA, G.R. No.
120553 June 17, 1997)
b. Other Passengers and Strangers
Art. 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or
negligence of other passengers or of strangers, if the common carrier's employees through the exercise of the
diligence of a good father of a family could have prevented or stopped the act or omission.
If the injury is suffered by the passenger because of the negligence or wilful act of a fellow passenger, the carrier will be
liable only if through the exercise of the diligence of a good father of a family, the common carriers employees could
have prevented or stopped the same. Otherwise, it is not liable.
4. Extent of Liability for Damages
Q. Can the act that breaches the contract be also considered a tort or quasi-delict?
YES. Although the relation of passenger and carrier is contractual both in origin and nature, nevertheless, the act
that breaks the contract may also be a tort. (Air France . Carrascoso G.R. No. L-21428 September 28, 1966)
Q. What is the extent of the liability of the carrier and the driver?
The carrier and driver are SOLIDARILY LIABLE as joint tortfeasors (Art. 2180)
Q. Does the contributory negligence of the passenger bar his recovery of damages from the carrier?
NO. The contributory negligence of the passenger does not bar recovery of damages for his death or injuries, if the
proximate cause thereof is the negligence of the common carrier, BUT the amount of damages shall be equitably
reduced.
Indemnity for Death
Art. 1764 of the Civil Code, in relation to Art. 2206 thereof provides for the payment of indemnity for the death of
passengers caused by the breach of contract of carriage by a common carrier. Initially fixed in Art. 2206 at
P3,000.00, the amount of the said indemnity for death has through the years been gradually increased in view of the
declining value of the peso.
Actual Damages
Art. 2199 provides that except as provided by law or by stipulation, one is entitled to an adequate compensation
only for such pecuniary loss suffered by him as has duly proved
Moral Damages
Under Art. 2206, the spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand
moral damages for mental anguish by reason of the death of the deceased. The trial court found that private
respondent suffered pain from the death of her husband and worry on how to provide support for their minor children.
Exemplary Damages
Art. 2232 provides that in contracts and quasi-contracts, the court may award exemplary damages if the defendant
acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.
Attorneys fees
Pursuant to Art. 2208, attorneys fees may be recovered when exemplary damages are awarded.
Compensation for loss of earning capacity
Art. 1764 of the Civil Code, in relation to Art. 2206 thereof, provides that in addition to the indemnity for death arising
from the breach of contract of carriage by a common carrier, the defendant shall be liable for the loss of the earning
capacity of the deceased, and the indemnity shall be paid to the heirs of the latter. The formula established in decided
cases for computing net earning capacity is as follows:
NET EARNING CAPACITY = LIFE EXPECTANCY x GROSS ANNUAL INCOME NECESSARY LIVING
EXPENSES
Life expectancy is equivalent to 2/3 multiplied by the difference of 80 and the age of the deceased . (Fortune Express,
Inc. vs. CA, 305 SCRA 14, March 18, 1999)
Defenses available to the Common Carrier-
The presumption of fault or negligence on the part of common carriers can be rebutted only by the proof that:
(a) they observed extraordinary diligence in the selection and supervision of their employees; or
(b) the loss or damage was occasioned by any of the following causes:
- flood, storm, earthquake, lightning, or other natural disaster or calamity
- act of public enemy in war whether international or civil
- act of omission of the shipper or owner of the goods;
- the character of the goods or defects in the packing or in the containers; and
- order or act of competent public authority
Q.:When does contract of carriage end?
A: The relation of carrier and passenger continues until the passenger has been landed at the port of destination
and has left the vessel owners dock or premises.
IPO DIR. ESTRELLITA BELTRAN-ABELARDO : TRANSPORTATION LAW
D. Bill of Lading
Bill of Lading is a written acknowledgement of the recipt of goods and an agreement to transport and to deliver
them at a specified place to a person named or on his or her order. It operates both as a receipt and as a contract.
It is a receipt for the goods shipped and a contract to transport and deliver the same as therein stipulated. As a
receipt, it recites the date and place of shipment, describes the goods as to quantity, weight, dimensions,
identification marks, condition, quality, and value. As a contract, it names the contracting parties, which include
the consignee; fixes the route, destination, and freight rate or charges; and stipulates the rights and obligations
assumed by the parties (Unsworth Transportation Intl Phils., Inc. v. CA G.R. No. 166250, July 26, 2010)
1. Three-Fold Character
A bill of lading has three fold character. It operated both as a (1) receipt and as a (2) contract. It is a contract for the
goods shipped and a contract to transport and deliver the same as stipulated. It becomes effective upon delivery to and
accepted by the shipper. It is also a (3) Document of title and evidence of the contract between the parties since its
contents shall decide all disputes which may arise in regard to their execution and fulfillment.
2. Delivery of Goods
Art. 717. The delivery of the bill of lading shall produce the cancellation of all provisional receipts of prior date
issued by the captain or his subordinates for partial deliveries of the cargo which may have been made.
a. Period of Delivery
Not only to transport the goods safely but to the person indicated in the bill of lading. The goods should be
delivered to the consignee or any other person to whom the bill of lading was validly transferred or negotiated.
Stipulated in contract/Bill of Lading No stipulation
Carrier is bound to fulfil the contract and is -within a reasonable time.
liable for any delay; no matter from what cause -Carrier is bound to forward them in the
it may have arisen 1stshipment of the same or similar goods which
he may make to the point of delivery. (Art. 358
Code of Commerce)
b. Delivery Without Surrender of Bill of Lading
Where the carrier has been instructed by the shipper to deliver the perishable goods shipped without awaiting the bill of
lading, or if it was the established practice for the shipper to request the shipping lines to immediately release perishable
cargoes through telephone calls, the carrier is justified in making delivery to the person named in the instruction even
without the presentation of the bill of lading (Macam vs. CA. G.R. No. 125524, August 25, 1999)
c. Refusal of Consignee to Take Delivery
The consignee may refuse to receive the goods in the following instances:
a. Should a part of the goods transported be delivered, the consignee may refuse to receive it when he proves that he
cannot make use of it without the others; (Art. 363)
b. If, due to the effects of the damage, the goods are rendered useless for sale or consumption for particular purposes for
which they are to be used, the consignee shall not be bound to receive them, and he may leave them in the hands of the
carrier, demanding payment of their value at the current market price on said day; (Art. 365)
c. If among the damaged goods there should be some in good condition and without defect whatsoever, the foregoing
provision shall be applicable with regard to the damaged ones, and the consignee shall receive those which are sound .
This segregation being made by distinct and separate pieces, without dividing for such purpose on whole article, unless
the consignee proves the impossibility of conveniently utilizing them in this form. The same rule shall be applied to goods
in bales and packages, with distinction of those which appear sound.
Q. What is the effect of the refusal of the consignee to take delivery?
If there has been notice of the arrival and the consignee fails to claim the goods after the lapse of a reasonable
period, there will be constructive delivery. If the consignee still fails to take delivery, from that point on, the contract
between the carrier and the consignee will no longer be a contract of carriage but a contract of deposit.
3. Period for Filing Claims (Art. 366)
Within the 24 hour following the receipt of the merchandise, the claim against the carrier for damage or average be
found therein upon opening the packages, may be made, PROVIDED that theindications of the damage or average which
gave rise to the claim cannot be ascertained from the outside part of such packages, in which case the claim shall be
admitted only at the time of receipt.After the periods mentioned have elapsed, or the transportation charges have been
paid, NO CLAIM SHALL BE ADMITTED against the carrier with regard to the condition in which the goods transported
were delivered.
Claims for damage to the merchandise transported may be made upon the carrier within the following times:
1. If the damage is apparent from the exterior of the package, the claim must be made upon receipt of the package. For
such purpose, a verbal claim made immediately is sufficient compliance with the law.
2. If the damage cannot be known from the exterior part of the package, the claim must be made within 24 hours
following the receipt of the merchandise.
3. When the consignee receives the merchandise, paying the freight charges WITHOUT PROTEST extinguishes all
claims against the carrier (Southern Lines, Inc. vs. CA 4 SCRA 261)
The period of filing claims by the consignee depends on the following applicable laws:
1. The Code of commerce
2. Carriage of goods by sea act
Q. When is the Code of Commerce applicable
1. Domestic/inter-island/coastwise transportation
2. Land, water, air transportation
Q. When is COGSA applicable?
1. International/overseas/foreign
2. Water/maritime transportation
Period for filing claims
1. Apparent damage If the damage can be ascertained from the outside part of such package, in which case the claim
shall be admitted only at the time of receipt.
2. Latent damage within the 24 hours following the receipt of the erchandise, the claim against the carrier for damage or
average be found therein upon opening the packages, may be made. PROVIDED that the indications of the damage or
average which gives rise to the claim cannot be ascertained from the outside part of such packages.
4. Period for Filing Actions
What is the prescriptive period in bringing a suit against a carrier?
Under the Code of Commerce, the provisions of the Civil Code shall apply.
With Bill of Lading 10 years prescriptive period
No Bill of Lading 6 years prescriptive period
The point that matters here is that the situation is either delivery or misdelivery, but not non-delivery. Thus, the goods
were either rightly delivered or misdelivered, but they were not lost. There being no loss or damage to the goods, the
aforequoted provision of the Carriage of Goods by Sea Act stating that In any event, the carrier and the ship shall be
discharged from all liability in respect of loss or damage unless it is brought within one year after delivery of the goods or
the date of when the goods should have been delivered, does not apply. Said one-year period of limitation is designed to
meet the exigencies of maritime hazards. In a case where the goods shipped were neither lost nor damaged in transit but
were, on the contrary, delivered in port to someone who claimed to be entitled thereto, the situation is different, and the
special need for the short period of limitation in case of loss or damage caused by maritime perils does not obtain.
IPO DIR. ESTRELLITA BELTRAN-ABELARDO : TRANSPORTATION LAW
E. Maritime Commerce
1. Charter Parties- A charter party is a maritime contract by virtue of which the owner or agent of a vessel binds
himself to transport merchandise of persons for a fixed price and where the ship or some part thereof is leased by the
owner to another person for a specified period, voyage or purpose. They are (a) bareboat/demise charter; (b) time charter;
(c) voyage/trip charter.
a. Bareboat/Demise Charter
Here the charterer receives the ship from the ship owner or ship agent in a bare condition with no provisions, supplies or
crew. The charterer therefore provides for all of these and is considered the owner of the vessel pro hac vice during the
existence of the contract. He is therefore liable as a ship owner during this period and is liable for all the consequences of
the voyage as if he were the owner. He would not, however, be liable if the loss, destruction or damage to the goods or the
injuries or deaths of passengers was due to the unseaworthy condition of the vessel. In this case, it is the ship owner who
is liable. Where the carrier is a bareboat or demise, the vessel which is ordinarily a common carrier, becomes a private
carrier
(Planters Products, Inc. vs. CA 226 SCRA 476; Caltex Phil., vs. Sulpicio Lines 315 SCRA 709)
Q. What is a contract of AFFREIGHTMENT?
A contract of affreightment is whereby the owner of the vessel leases part or all of its space to haul goods for others
(PPI vs. CA)
Kinds of Contract of AFFREIGHTMENT
1. Time charter vessel is chartered for a fixed period of time or duration of voyage.
2. Voyage or Trip Charter The vessel is leased for one or series of voyages usually for purposes of transporting goods
for charterer.
Implications of a Contract of Affreightment
The charterer hires the vessel only and the master and crew remain in the employ of the ship owner. The ship owner
remains the owner of the vessel. Thus, the ship owner shall be liable for the expenses of the voyage and also for any loss
or injury during the voyage.
2. Liability of Ship Owners and Shipping Agents
Ship owner is the person who has control, possession, management and ownership of the maritime vessel.
Ship agent, also called a naviero, is the person who is entrusted with provisioning and representing the vessel in the port
in which it may be found. While he is not the ship owner, he is solidarily liable with the owner for such losses or damages
for which the ship owner is liable for. (NDC vs. CA, 164 SCRA 593)
The following are the liabilities of a ship owner or ship agent:
a) If the vessel is chartered wholly, not to accept cargo from others
b) To observe represented capacity
c) To unload cargo clandestinely placed
d) To substitute another vessel if load is less than 3/5 of capacity
e) To leave the port if the charterer does not bring the cargo within the lay days and extra lay days allowed
f) To place in a vessel in a condition to navigate
g) To bring cargo to nearest neutral port in case of war or blockade (Art. 669-678, Code of Commerce)
HYPOTHECARY under Act 587 of the Code of Commerce, in case of maritime transactions, the liability of the
owner of the vessel is limited to the vessel itself. VIf the vessel sinks, generally the liability of the owner is
extinguished, although he may have other properties.
EXCEPTIONS TO HYPOTHECARY NATURE OF MARITIME TRANSACTION. It would not apply-
a. When the shipowner was at fault (unseaworthy, lack of proper equipment and lack of proper training of the
officers/crew
b. When the liability was for repairs on the vessel that was completed before her loss
c. Would not apply to vessel when made a collateral
d. Would not apply to extent covered by insurance
Cases where applicable:
Art. 587 civil liability for indemnities to third persons;
Art. 590 indemnities from negligent acts of the captain (not the shipowner or ship agent)
Art. 643. liability for wages of the captain and the crew and for advances made by the ship agent if the vessel is
lost by shipwreck or capture.
General Rule: The liability of shipowner and ship agent is limited to the amount of interest in said vessel such that
where vessel is entirely lost, the obligation is extinguished. (Luzon Stevedoring v. Escano, 156 SCRA 169) The
interest extends to: 1) the vessel itself; 2) equipments; 3) freightage; and 4) insurance proceeds. (Chua v. IAC, 166
SCRA 183)
Exceptions:
a. Claims under Workmens Compensation (Abueg vs. San Diego 77 Phil 730)
b. Injury or damage due to shipowner or to the concurring negligence of the shipowner and the captain;
c. The vessel is insured (Vasquez vs. CA 138 SCRA 553);
d. Expenses for repair on vessel completed before loss;
e. In case there is no total loss and the vessel is not abandoned;
f. Collision between two negligent vessels
Abandonment of the vessel is necessary to limit the liability of the shipowner. The only instance were
abandonment is dispensed with is when the vessel is entirely lost (Luzon Stevedoring vs. CA 156 SCRA 169)
Liabilities of a charterer
a) To pay the agreed charter price
b) To pay the freightage on unboarded cargo
c) To pay losses to others for loading uncontracted cargo and illicit cargo
d) To wait if the vessel needs repair
e) To pay expenses for deviation (Art. 679-687, Code of Commerce)
a. Liability for Acts of Captain
The agent shall be civilly liable for the indemnities in favour of third persons which arise from the conduct of the captain
in the care of the goods which the vessel carried, but he may exempt himself therefrom by abandoning the vessel with all
her equipments and the freight he may have earned during the trip. (Art. 587, Code of Commerce)
The part owners of the vessel shall be civilly liable, in proportion of their contribution to the common fund, for the results
of the acts of the captain referred to in Art. 587 Each part owner may exempt himself from this liability by the
abandonment, before a notary, of the part of the vessel belonging to him (Art. 590, Code of Commerce)
A captain who, having agreed to making a voyage fails to fulfil his obligation, without being prevented by fortuitous
accident or by force majeure, shall indemnify for all the losses his action may cause, without prejudice to criminal
penalties which may be proper (Art. 614, Code of Commerce)
POWERS OF CAPTAIN
1. Contract with crew; command and discipline crew
2. Enter into charter party
3. Contract for fuel and provisions
4. Contract for needed repairs of vessel
Three roles of the captain or master
1. He is a general agent of the ship owner
2. He is also the commander and the technical director of the vessel
3. He is a representative of the country under whose flag he navigates
Liability of Captain to Ship Agent for Damages that ship agent may be liable for in the following:
1. Damages arising from neglect or want of skill of captain
2. Theft or Robbery by crew
3. Mutiny
4. Fines and confiscations for failure to comply with the rules on navigation, customs or health
5. Misuse of powers by captain
6. Unjustified deviation
b. Exceptions to Limited Liability
Limited Liability Rule In case of maritime transactions, the liability of the owner of the vessel is limited to the
vessel itself .
Exceptions to the limited Liability Rule:
Where the injury or death to a passenger is due either to the fault of the ship owner or to the concurring negligence of the
ship owner and the captain (Manila Steamship Co., Inc. vs. Abdulhaman G.R. No. L-9534, September 29, 1956)
1. Where the vessel is insured
2. Workmens compensation claims (Abueg vs. San Diego, CA-773-775, December 17, 1946)
3. Expenses for repair and provisioning of the ship before its loss
4. In case there is no total loss and the vessel is not abandoned
3. Accidents and Damages in Maritime Commerce
Average
An extraordinary or accidental expense incurred during the voyage in order to preserve the cargo, vessel, or both, and
all damages or deterioration suffered by the vessel from departure to the port of destination, and to the cargo from the port
of loading to the port of consignment. (Art. 806 Code of Commerce)
Two kinds of Averages
1. general or gross average
2. particular or simple average
3a. General Average
A general average is when damages or expenses deliberately caused in order to save the vessel, its cargo, vessel or
both from real and known risk. Where both vessel and cargo are saved, it is general average. The person whose
property has been saved must contribute to reimburse the damage caused or expense incurred if the situation constitutes
general average.
Requisites of a General Average
1. Existence of a common danger
2. The deliberate sacrifice of the vessel and/or cargo or parts of the vessel or cargo
3. The taking of the legal steps before the deliberate sacrifice
4. Success in saving what was intended to be saved
Are expenses incurred to refloat a vessel, which accidentally ran aground, considered as general average?
NO. Expenses incurred to refloat a vessel, which accidentally ran aground, in order to continue its voyage, do not
constitute a general average. Not only is there absence of marine peril, common safety factor, and deliberateness. It is the
safety of the property, and not the voyage, which constitutes the true foundation of general average (A. Magsaysay, Inc. v.
Agan G.R. No. L-6393, January 31, 1955)
Implications of having a General Average
All the persons having an interest in the vessel and the cargo therein at the time of the occurrence of the average shall
contribute to satisfy this average. Thus, those whose cargoes were saved must contribute to the general average proportion
to the value of the owners property saved. The insurers and lenders on bottomry and respondentia shall likewise
contribute.
Art. 811. General or gross averages shall, as a general rule, include all the damages and expenses which are
deliberately caused in order to save the vessel, her cargo, or both at the same time, from a real known risk, and
particularly the following:
1. The effects of cash invested in redemption of the vessel or the cargo captured by enemies, privateers, or pirates, and
the provisions, wages, and expenses of the vessels detained during the time the settlement or redemption is being made;
2. The effects jettisoned to lighten the vessel, whether they belong to the cargo, to the vessel, or to the crew, and the
damage suffered through said act by the effects which are kept on board;
3. The cables and masts which are cut or rendered useless, the anchors and the chains which are abandoned, in order to
save the cargo, the vessel, or both;
4. The expenses of removing or transferring a portion of the cargo in order to lighten the vessel and the place it in
condition to enter a port or roadstead, and the damage resulting therefrom to the effects removed or transferred;
5. The damage suffered by the effects loaded as a cargo by the opening made in the vessel in order to drain her and
prevent her from sinking;
6. The expenses caused in order to float a vessel intentionally stranded for the purpose of saving her;
7. The damage caused to the vessel which had to be opened, scuttled or broken in order to save the cargo;
8. The expenses for the treatment and subsistence of the members of the crew who may have been wounded or crippled
in defending or saving the vessel;
9. The wages of any member of the crew held as hostage by enemies, 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 prefer it;
10. The wages and victuals of the crew of a vessel chartered by the month, during the time that she is embargoed or
detained by force majeure or by order of the Government, or in order to repair the damage caused for the common benefit;
11. The depreciation resulting in the value of the goods sold at arrivals under stress in order to repair the vessel by
reason of gross average;
12. The expenses of the liquidation of the average.
Simple or Particular average
Damages or expenses caused to the vessel or cargo that did not inure to the common benefit, and borne by
respective owners. (Art. 809, Code of Commerce) If only the vessel or only the cargo is saved, it is particular average.
Art. 809. As a general rule, simple or particular averages include all the expenses and damages caused to the
vessel or to her cargo which have not inured to the common benefit and profit of all persons interested in the vessel
and her cargo, especially the following :
1. The damage suffered by the cargo from the time of its embarkation until it is unloaded, either on account of the
inherent defect of the goods or by reason of a marine accident or force majeure, and the expenses incurred to avoid and
repair the same;
2. The damage and expenses suffered by the vessel in her hull, rigging, arms, and equipments, for the same causes and
reasons, from the time she puts to sea from the port of departure until she anchors in the port of destination;
3. The damage suffered by the goods loaded on deck, except in coastwise navigation, if the marine ordinances allow it;
4. The wages and victuals of the crew when the vessel is detained or embargoed by a legitimate order or force majeure,
if the charter has been contracted for a fixed sum for the voyage;
5. The necessary expenses on arrival at a port, in order to make repairs or secure provisions;
6. The lowest value of the goods sold by the captain in arrivals under stress for the payment of provisions and to save
the crew, to meet any other need of the vessel against which the proper amount shall be charged;
7. The victuals and the wages of the crew while the vessel is in quarantine;
8. The damage inflicted upon the vessel or cargo by reason of an impact or collision with another, if it is accidental and
inevitable. If the accident should occur through the fault or negligence of the captain, the latter shall be liable for all the
damage caused;
9. Any damage suffered by the cargo through the fault, negligence, or barratry of the captain or of the crew, without
prejudice to the right of the owner to recover the corresponding indemnity from the captain, the vessel, and the freight.
Art. 810. The owner of the things which gave rise to the expenses or suffered the damages shall bear the simple or
particular averages.
3b. Collisions
Collision when both vessels are moving
Allusion- when one of the vessels is stationary
Five Cases covered by Collision and Allusion
1. One vessel at fault- such vessel is lliable for damages caused to innocent vessel as well as damages suffered by the
owners of the cargo
2. Both Vessels at Fault each vessel must bear its own loss, but the shippers of both vessels may go against the ship
owners who will be solidarily liable
3. VESSEL AT FAULT NOT KNOWN same rule as (2)
4. THIRD VESSEL AT FAULT (same rule as 1)
5. FORTUITOUS EVENT no liability each bears its own loss
Art. 826. If a vessel should collide with another, through the fault, negligence or want of skill of the captain, sailing
mate, or any other member of the complement, the owner of the vessel at fault shall indemnify the damages
suffered, after an expert appraisal.
In case of collision of vessels in transporting goods to the Philippines, the Code of Commerce shall apply, since collision
is a matter not regulated by the Civil Code and the Code of Commerce being suppletory to the Civil Code (National
Development Company v. CA 164 SCRA 593)
Three zones of Collision
First Zone This is the time up to the moment when the risk of collision begins. This zone starts the moment the vessels
find each other travelling in the same area.
Second Zone The time from the moment the risk of collision begins up to the point when the collision becomes a
certainty. It is in this zone where the negligence of the vessel is determined and is material.
Third Zone This is the time from the moment the collision becomes certain up to the actual impact. In this zone, if a
vessel having the right of way makes a wrong maneuver or a wrong move to avoid a collision made certain by the
negligent acts of the other vessel during the second zone, the wrong move of the innocent vessel is called error in
extremis and even if wrong does not make the innocent vessel liable.
Cases covered by Collision and Allision
One vessel at fault
Vessel at fault is liable for damage caused to innocent vessel as well as damage suffered by the owners of cargo of both
vessels (Art. 826, Code of Commerce)
Both vessels at fault
Each vessel must bear its own loss, but the shippers of both vessels may go against the ship owners who will be
solidarily liable (Art. 827, Code of Commerce)
Vessel at fault not known
Each vessel must bear its own loss, but the shippers of both vessels may go against the ship owners who will be
solidarily liable (Art. 828, Code of Commerce)
Third vessel at fault
The third vessel will be liable for losses and damages (Art. 831, Code of Commerce)
Fortuitous event/force majeure
No liability. Each bears its own loss (Art. 830, Code of Commerce) subject to New Civil code (NCC) requirement on
fortuitous event to exercise due diligence before, during and after and provided that there is no delay.
Art. 832, If by reason of a storm or other cause of force majeure, a vessel which is properly anchored and moored
should collide with those nearby, causing them damages, the injury occasioned shall be considered as particular
average of the vessel run into.
Art. 833. A vessel which, upon being run into sinks immediately, as well as that which, having been obliged to mae
a port to repair the damage caused by the collision, is lost during the voyage or is obliged to be stranded in order to
be saved shall be presumed as lost by reason of collision.
Doctrine of Inscrutable Fault In case of collision where it cannot be determined which between the two vessels
was at fault, both vessels bear their respective damage, but both should be solidarily liable for damage to the cargo
of both vessels.
Art. 826. If a vessel should collide with another, through the fault , negligence or want of skill of the captain,
sailing mate, or any other member of the complement, the owner of the vessel at fault shall indemnify the damafes
suffered, after an expert appraisal.
Art. 817. If the collision is imputable to both vessels, each one shall suffer her own damage and both shall be
solidarily liable for the damages occasioned to their cargoes.
Art. 830. If a vessel should collide with another through fortuitous even or force majeure, each vessel and her
cargo shall suffer their own respective damage.
Art. 831. If a vessel should be forced by a third vessel to collide with another, the ship owner of the third vessel
shall indemnify the damages caused , the captain thereof being civilly liable to said owner.
Art. 832. If by reason of a storm or other cause of force majeure, a vessel which is properly anchored and moored
should collide with those nearby, causing them damages, the injury occasioned shall be considered as particular
average of the vessel run into.
Art. 833. A vessel which, upon being run into sinks immediately, as well as that which, having been obliged to mae
a port to repair the damage caused by the collision, is lost during the voyage or is obliged to be stranded in order to
be saved shall be presumed as lost by reason of collision.
Collision Allision
Impact of two vessels both of which are moving Impact between a moving vessel and a
stationary one
SALVAGE LAW- (Act 2616) provides for compulsory reward to those who brave the perils of the sea to save
cargo or vessel in order to encourage such services. Whether owner of the property saved likes it or not, he must
give a reward the minimum amount of which is 50% of the value of the property saved.
FOB, FAS AND CIF DESIGNATIONS: Give rise to a presumption in commercial practice based on commercial
customs . In both instances of CIF or FOB a carrier intervenes.-
DEFINITIONS:
1. FOB - Free on Board a price quotation with FOB presumes that the seller shall comply with his obligation to deliver
the cargo to the vessel
2. FAS- Free Alongside Ship has the same presumptions as FOB
3. CIF _Cost Insurance Freight presumes that the seller shall pay cost of crating and packaging, insurance premium and
freightage.
4. Res perit domino if goods are lost in transit, the owner bears the loss.
4. CARRIAGE OF GOODS BY SEA ACT
Sec. 13. This Act shall apply to all contracts for carriage of goods by seas to or from ports of the United States in foreign
trade. As used in this Act the term "United States" includes its districts, territories, and possessions: Provided, however,
that the Philippine Legislature may by law exclude its application to transportation to or from ports of the Philippine
Islands.
COGSA is applicable when the following are present:
a. Water/maritime transportation
b. For the carriage of goods
c. Overseas/international/foreign (from foreign port to Philippine port)
a. Application
The laws of the country to which the goods are to be transported govern the liability of the common carrier in case of loss,
destruction, or deterioration (Eastern Shipping Lines, Inc. vs. IAC 150 SCRA 464; NDC vs. CA 164 SCRA 593)
The Carriage of Goods by Sea Act, which is suppletory to the provisions of the Civil Code, supplements the latter by
establishing a statutory provision limiting the carriers liability in the absence of a shippers declaration of a higher value
in the bill of lading the provisions on limited liability are as much a part of the bill of lading as though physically in it
and as though placed there by agreement of the parties (Belgian Overseas Chartering and Shipping NV vs. Philippine First
Insurance Co., Inc., 383 SCRA 23)
If suit is brought against the carrier for delay in delivery, this is not a loss or damage to the goods contemplated by Sec. 3
of the COGSA. You have to use instead, the New Civil Code provisions on prescription.
If the cargo is shipped from New York to Cebu pursuant to the bill of lading, but the ships final port is Manila, losses to
the goods while being transhipped from Manila to Cebu aboard an inter-island vessel is still covered by the COGSA
(American Insurance Co. of North America vs. CIA Maritima 21 SCRA 998)
b. Notice of Loss or Damage
Unless notice of loss or damage and the general nature f such loss or damage given in writing to the carrier or his agent at
the port of discharge or at the time of the removal of the goods into the custody of the person entitle 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 within three days of the
delivery. (Par. 6 Sec. 3, Carriage of Goods by Sea Act)
Inasmuch as neither the Civil Code nor the Code of Commerce states a specific prescriptive period on the matter, the
Carriage of Goods by Sea Act (COGSA) which provides for a one-year period of limitation on claims of loss of, or
damage to, cargoes sustained during transit may be applied suppletorily to the case at bar (Wallem Philippine Shipping,
Inc. vs. S.R. Farms Inc., G.R. No. 161849, July 9, 2010)
Period for filing claims by consignee against the carrier under the COGSA
1. Apparent damage if the loss is apparent, notice of loss or damage and the general nature of such loss or damage is
given in writing to the carrier or his agent (1) at the port of discharge or (2) at the time of the removal of the goods into the
custody of the person entitled to delivery thereof under the contract of carriage.
2. Latent damage if the loss or damage is not apparent, the notice must be given within three (3) days of the delivery.
Effect of failure to file a claim within the period prescribed
Removal of the goods by the carrier without filing a claim shall be prima facie evidence of the delivery by the carrier of
the goods as described in the bill of lading
Is filing a claim condition precedent in bringing a suit against the carrier?
NO. If a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall
not affect or prejudice the right of the shipper to bring suit within one (1) year after the delivery of the goods or the date
when the goods should have been delivered. In the case of any actual or apprehended loss or damage, the carrier and the
receiver shall give all reasonable facilities to each other for inspecting and tallying the goods. (Sec. 3(6), COGSA)
c. Period of Prescription
The action should be filed within one year from delivery of the goods or from the date when the goods should have been
delivered. This is the prescriptive period for the action. Where the action is not filed within said period, the carrier shall be
discharged from liability (Se. 3(6), COGSA)
The one year period does not apply to conversions or misdeliveries. They are not contemplated within the meaning of
loss of goods mentioned in the COGSA (CIA Maritima vs. Insurance Co. of North America, 19 SCRA 123; Ang vs.
CIA Maritima 133 SCRA 600). Here, use the New Civil Code provisions on prescription:
Ten (10) years if there is a written contract or bill of lading
Six (6) years if the contract is oral.
For losses or damage to the goods or non-delivery, apply the one year period under the COGSA.
A stipulation reducing the one year period is null and void although an agreement suspending the period is valid.
There must be an agreement between the parties to suspend the running of the prescriptive period. Hence, a mere
letter of demand by the shipper or any other extrajudicial demand, does not toll the running of the period (Dole
Philippines vs. Maritime Co., 148 SCRA 118).
The law admits of an exception to the prescriptive period: if the one year period is suspended by express agreement of the
parties. In such a case, the agreement becomes the law of the parties (Phil. American Gen. Insurance vs. Mutuc, 61 SCRA
22, 23)
If the suit is filed by the insurer under its subrogatory right, the one year period applies (Fil. Merchants vs. Alejandro, 145
SCRA 42). However, where the shipper or consignee files the suit against the insurer for payment under the insurance
policy, the one year period does not apply but the ten (10) year prescriptive period under the civil code because the suit is
not against the carrier arising from the contract of carriage. (Mayer Steel Pipe Corp. vs. CA 274 SCRA 432)
d. Limitation of Liability
Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless
caused by want of due diligence on the part of the carrier to make the ship seaworthyvand to secure that the ship is
properly manned, equipped, and supplied, and to make the holds, refrigerating and cooling chambers, and all
other parts of the ship in which goods are carried fit and safe for their reception, carriage, and preservation, in
accordance with the provisions of Par 1 of Sec 3 COGSA.
Burden of Proof with respect to due diligence when a loss or damage resulted from unseaworthiness.
Whenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence
shall be on the carrier or other person claiming exemption under this section (Sec. 4. COGSA)
Q. Under what instances is the carrier not liable for the loss or damage of goods under COGSA?
Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from
1. Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the
management of the ship
2. Fire, unless caused by the actual fault or privity of the carrier
3. Perils, dangers, and accidents of the sea or other navigable water
4. Act of God
5. Act of war
6. Act of Public enemies
7. Arrest or restraint of princes, rulers, or people, or seizure under legal process
8. Quarantine restrictions
9. Act of omission of the shipper or owner of the goods, his agent or representative
10. Strikes or lockouts or stoppage or restraint of labor from whatever cause, whether partial or general: Provided, that
nothing herein contained shall be construed to relieve a carrier from responsibility for the carriers own acts;
11. Riots and civil commotions
12. Saving or attempting to save life or property at sea
13. Wastage in bulk or weight or any other loss or damage arising from inherent defect, quality, or vice of the goods
14. Insufficiency or inadequacy of marks
15. Latent defects not discoverable by due diligence
16. Any other cause arising without the actual fact and privity of the carrier and without the fault or neglect of the agents
or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that
neither the actual fault or privity of the carrier contributed to the loss or damage (Sec. 4, COGSA)
The liability of the carrier is US$500 per package in the absence of a shippers declaration of a higher value in the bill of
lading (Sec 4(5), COGSA). When what would ordinarily be considered packages are shipped in a container supplied by
the carrier and the number of such units is disclosed in the shipping documents, each of those units and not the container
constitutes the package referred to in the liability limitation provision of COGSA (Belgian Overseas Chartering and
Shipping N.V. vs. Philippine First Insurance Co., Inc., 383 SCRA 23)
IPO DIR. ESTRELLITA BELTRAN-ABELARDO : TRANSPORTATION LAW
F. The Warsaw Convention
The Warsaw Convention is an agreement among sovereign countries concerning the regulation in a uniform manner of the
conditions of international transportation by air in respect of the documents used for such transportation and of the
liability of the carrier. It was signed on October 12, 1929 n Warsaw, Poland.
Under the Warsaw Convention, the carrier must deliver to the passenger a ticket. However, the absence, irregularity, or
loss of the passengers ticket shall not affect the existence or the validity of the contract of transportation, which shall
nonetheless be subject to the rules of the convention. If the carrier accepts a passenger without a passenger ticket, the
carrier shall not be entitled to avail itself of the provisions of the convention which exclude or limit its liability.
1. Applicability
The Warsaw convention applies to all international transportation of persons, baggage, or goods by air and for
compensation. There is international transportation if the place of departure and destination are within the territories of
two contracting parties and even if the place of departure and destination are within the territory of a single contracting
party as long as there is an agreed stopping place within the territory of another country, whether or not said country is a
contracting party to the convention. (Art. 1, Warsaw Convention)
Under Art. 28(1) of the Warsaw Convention, the plaintiff may bring an action for damages before:
1. The court where the carrier is domiciled
2. The court where the carrier has its principal place of business
3. The court where the carrier has an establishment by which the contract has been made
4. The court of the place of destination (Lhuiller vs. British Airways, 615 SCRA 380)
The Warsaw Convention shall also apply to fortuitous events affecting transportation by aircraft performed by an air
transportation enterprise. The Convention is likewise applicable to air transportation by legal entities constituted under
public law of the High Contracting parties.
2. Limitation of Liability
Article 20
1. The carrier is not liable if he proves that he and his agents have taken all necessary measures to avoid the damage or
that it was impossible for him or them to take such measures.
2. In the carriage of goods and luggage the carrier is not liable if he proves that the damage was occasioned by negligent
pilotage or negligence in the handling of the aircraft or in navigation and that, in all other respects, he and his agents have
taken all necessary measures to avoid the damage.
a. Liability to Passengers
Art. 22 (1) of the Warsaw Convention provides:
In the carriage of passengers the liability of the carrier for each passenger is limited to the sum of 125,000 francs. Where,
in accordance with the law of the Court seised of the case, damages may be awarded in the form of periodical payments,
the equivalent capital value of the said payments shall not exceed 125,000 francs. Nevertheless, by special contract, the
carrier and the passenger may agree to a higher limit of liability.
b. Liability for Checked Baggage
Art. 22 (2) of the Warsaw Convention provides:
In the carriage of registered luggage and of goods, the liability of the carrier is limited to a sum of 250 francs per
kilogram, unless the consignor has made, at the time when the package was handed over to the carrier, a special
declaration of the value at delivery and has paid a supplementary sum if the case so requires. In that case the carrier will
be liable to pay a sum not exceeding the declared sum, unless he proves that that sum is greater than the actual value to the
consignor at delivery.
c. Liability for Hand-Carried Baggage
Art. 23 (3) of the Warsaw Convention provides:
As regards objects of which the passenger takes charge himself the liability of the carrier is limited to 5,000 francs per
passenger.
The sums mentioned above shall be deemed to refer to the French franc consisting of 65 milligrams gold of millesimal
fineness 900.
These sums may be converted into any national currency in round figures.
Any provision tending to relieve the carrier of liability or to fix a lower limit than that which is laid down in this
Convention shall be null and void, but the nullity of any such provision does not involve the nullity of the whole contract,
which shall remain subject to the provisions of this Convention. (Art. 23, Warsaw Convention)
3. Willful Misconduct
Under the Warsaw Convention, an air carrier is made liable for damages for:
a. the death, wounding or other bodily injury of a passenger if the accident causing it took place on board the aircraft or
in the course of its operations of embarking or disembarking
b. the destruction or loss of, or damage to, any registered luggage or goods, if the occurrence causing it took place
during the carriage by air
c. delay in the transportation by air of passengers, luggage or goods.
Art. 25 of the Warsaw Convention provides:
1. The carrier shall not be entitled to avail himself of the provisions of this Convention which exclude or limit his liability,
if the damage is caused by his wilful misconduct or by such default on his part as, in accordance with the law of the Court
seised of the case, is considered to be equivalent to wilful misconduct.
2. Similarly the carrier shall not be entitled to avail himself of the said provisions, if the damage is caused as aforesaid by
any agent of the carrier acting within the scope of his employment.
ALITALIA vs. INTERMEDIATE APPELLATE COURT
G.R. No. 71929 : December 4, 1990
slight reflection readily leads to the conclusion that it should be deemed a limit of liability only in those cases where the
cause of the death or injury to person, or destruction, loss or damage to property or delay in its transport is not attributable
to or attended by any wilful misconduct, bad faith, recklessness, or otherwise improper conduct on the part of any official
or employee for which the carrier is responsible, and there is otherwise no special or extraordinary form of resulting
injury. The Convention's provisions, in short, do not "regulate or exclude liability for other breaches of contract by the
carrier" or misconduct of its officers and employees, or for some particular or exceptional type of damage. Otherwise, "an
air carrier would be exempt from any liability for damages in the event of its absolute refusal, in bad faith, to comply with
a contract of carriage, which is absurd."