Professional Documents
Culture Documents
True Test: It has been held that the true test of a common De Guzman vs. CA
carrier is the carriage of passengers or goods, provided it Article 1732 makes no distinction between one whose
has space, for all who opt to avail themselves of its principal business activity is the carrying of persons or
transportation service for a fee. goods or both, and one who does such carrying only as
an ancillary activity.
Private Carrier One which, without being engaged in Article 1732 also carefully avoids making any distinction
the business of carrying as a public employment, between a person or enterprise offering transportation
undertakes to deliver goods or passengers for service on a regular or scheduled basis and one offering
compensation. such service on an occasional, episodic or unscheduled
basis.
COMMON CARRIER PRIVATE CARRIER
As to Availability National Steel Corp vs. CA
Contracts with a It has been held that the true test of a common carrier is
Holds himself out for all
particular individuals or the carriage of passengers or goods, provided it has
people indiscriminately
groups only space, for all who opt to avail themselves of its
As to Required Diligence transportation service for a fee. A carrier which does not
Extraordinary diligence Ordinary diligence qualify under the above test is deemed a private carrier.
As to Regulation The most typical, although not the only form of private
Not subjected to the carriage, is the charter party.
Subject to State
regulations imposed by
regulation
the State 1ST Philippine Industrial Corp vs. CA
Stipulation Limiting Liability A "common carrier" may be defined, broadly, as one who
Parties may not agree on Parties may limit the holds himself out to the public as engaged in the business
limiting the carriers carriers liability, provided of transporting persons or property from place to place,
liability except when it is not contrary to law, for compensation, offering his services to the public
provided by law morals or good customs generally.
Exempting Circumstances
It undertakes to carry for all persons indifferently, that is,
Prove extraordinary to all persons who choose to employ its services, and
diligence and 1733 Fortuitous event transports the goods by land and for compensation. The
(NCC) fact that petitioner has a limited clientele does not exclude
Presumption of Negligence it from the definition of a common carrier.
There is always a
presumption of Calvo vs. UCPB Insurance
negligence or fault unless No presumption of Article 1732 does not distinguish between a carrier
proved that they negligence offering its services to the "general public," i.e., the
exercised extraordinary general community or population, and one who offers
diligence and 1733, NCC services or solicits business only from a narrow segment
Governing Law of the general population. Article 1732 deliberately
Laws on obligations and refrained from making such distinctions.
Law on common carriers
contracts
1|A L Y S S A C A B A L A N G
FGU Insurance Corp vs. G.P. Sarmiento It is not a common carrier where its business is simply to
The true test of a common carrier is the carriage of make travel arrangements in their behalf. Respondents
passengers or goods, providing space for those who opt services as a travel agency include procuring tickets and
to avail themselves of its transportation service for a fee. facilitating travel permits or visas as well as booking
Common carriers are persons, corporations, firms or customers for tours. It is in this sense that the contract
associations engaged in the business of carrying or between the parties in this case was an ordinary one for
transporting passengers or goods or both, by land, water, services and not one of carriage.
or air, for hire or compensation, offering their services to
the public, whether to the public in general or to a limited Asian Terminals vs Daehan Fire & Marine
clientele in particular, but never on an exclusive basis. In the performance of its obligations, an arrastre operator
should observe the same degree of diligence as that
Philippine American General Insurance (PhilAmGen) required of a common carrier & a warehouseman. Being
vs. PKS Shipping the custodian of the goods discharged from a vessel, an
Much of the distinction between a common or public carrier and arrastre operators duty is to take good care of the goods
a private or special carrier lies in the character of the business, and to turn them over to the party entitled to their
such that if the undertaking is an isolated transaction, not a part possession.
of the business or occupation, and the carrier does not hold itself
out to carry the goods for the general public or to a limited Spouses Pereas vs. Spouses Zarate
clientele, although involving the carriage of goods for a fee, the The diligence required of a private carrier is only ordinary,
person or corporation providing such service could very well be that is, the diligence of a good father of the family. In
just a private carrier. contrast, a common carrier is required to observe
extraordinary diligence, and is presumed to be at fault or
Asia Lighterage vs. CA
It is a common carrier whether its carrying of goods is to have acted negligently in case of the loss of the effects
of passengers, or the death or injuries to passengers. The
done on an irregular rather than scheduled manner, and
Pereas operated as a common carrier because they held
with an only limited clientele. A common carrier need not
themselves out as a ready transportation indiscriminately
have fixed and publicly known routes. Neither does it have
to maintain terminals or issue tickets. to the students of a particular school living within or near
The test to determine a common carrier is whether the where they operated the service and for a fee.
given undertaking is a part of the business engaged in by
II. CHARACTERISTICS
the carrier which he has held out to the general public as
his occupation rather than the quantity or extent of the
Fisher vs. Yangco Steamship Co.
business transacted.
Common carriers exercise a sort of public office, and have
Spouses Cruz vs. Sun Holidays duties to perform in which the public is interested. Their
business is, therefore, affected with a public interest, and
Its ferry services are so intertwined with its main business
is subject of public regulation. The right to enter the public
as to be properly considered ancillary thereto. The
employment as a common carrier and to offer one's
constancy of respondents ferry services in its resort
services to the public for hire does not carry with it the
operations is underscored by its having its own Coco
Beach boats. And the tour packages it offers, which right to conduct that business as one pleases, without
include the ferry services, may be availed of by anyone regard to the interest of the public and free from such
reasonable and just regulations as may be prescribed for
who can afford to pay the same. These services are thus
the protection of the public from the reckless or careless
available to the public.
indifference of the carrier as to the public welfare and for
Bascos vs. CA the prevention of unjust and unreasonable discrimination
Common carriers are obliged to observe extraordinary of any kind whatsoever in the performance of the carrier's
diligence in the vigilance over the goods transported by duties as a servant of the public (Act No. 98).
them. Accordingly, they are presumed to have been at
fault or to have acted negligently if the goods are lost, U.S. vs Quinajon
destroyed or deteriorated. There are very few instances Quinajon and Quitariano charged 10 cents per sack when
when the presumption of negligence does not attach and their normal rate was only 6 cents. The Court ruled that
these instances are enumerated in Article 1734. defendants did not violated Act No. 98. It is only unjust,
undue and unreasonable discrimination which the law
A.F. Sanchez Brokerage vs. CA and FGU Insurance forbids.
A common carrier is mandated to observe extraordinary
diligence in the vigilance over the goods it transports Loadstar Shipping Co. Inc. vs. CA
according to all the circumstances of each case. In the It is not necessary that the carrier be issued a certificate
event that the goods are lost, destroyed or deteriorated, it of public convenience, and this public character is not
is presumed to have been at fault or to have acted altered by the fact that the carriage of the goods in
negligently, unless it proves that it observed extraordinary question was periodic, occasional, episodic or
diligence. unscheduled. The bare fact that the vessel was carrying
A common carrier is liable to the resulting damage to the a particular type of cargo for one shipper, which appears
goods if the improper packaging is known to the carrier or to be purely coincidental, is not reason enough to convert
his employees or is apparent upon ordinary observation, the vessel from a common to a private carrier, especially
but he nevertheless accepts the same without protest or where, as in this case, it was shown that the vessel was
exception. also carrying passengers.
The doctrine of limited liability does not apply where there
Crisostomo vs. CA was negligence on the part of the vessel owner or agent.
A contract of carriage or transportation is one whereby a
certain person or association of persons obligate III. COMMON VS. PRIVATE CARRIER
themselves to transport persons, things, or news from one
place to another for a fixed price. Such person or Home Insurance Co vs. American Steamship
association of persons are regarded as carriers and are The provisions of our Civil Code on common carriers were
classified as private or special carriers and common or taken from Anglo-American law. Under American
public carriers. jurisprudence, a common carrier undertaking to carry a
special cargo or chartered to a special person
2|A L Y S S A C A B A L A N G
only, becomes a private carrier. As a private carrier, a was actual delivery to the consignee through its duly
stipulation exempting the owner from liability for the authorized agent, the carrier.
negligence of its agent is not against public policy, and is
deemed valid. Eastern Shipping Lines vs. IAC
The Civil Code provisions on common carriers should not The law of the country to which the goods are to be
be applied where the carrier is not acting as such but as transported governs the liability of the common carrier in
a private carrier. The stipulation in the charter party case of their loss, destruction or deterioration. However,
absolving the owner from liability for loss due to the in all matters not regulated by said Code, the rights and
negligence of its agent would be void only if the strict obligations of common carrier shall be governed by the
public policy governing common carriers is applied. Such Code of Commerce and by special laws. Thus, the
policy has no force where the public at large is not Carriage of Goods by Sea Act, a special law, is suppletory
involved, as in the case of a ship totally chartered for the to the provisions of the Civil Code.
use of a single party. National Development Company vs. CA
The law of the country to which the goods are to be
San Pablo vs. Pantranco South Express transported governs the liability of the common carrier in
The contention of Pantranco that its ferry service case of their loss, destruction or deterioration.
operation is as a private carrier, not as a common carrier
for its exclusive use in the ferrying of its passenger buses
and cargo trucks is absurd. Pantranco does not deny that Gelisan vs. Alday
it charges its passengers separately from the charges for As the registered owner of a public service vehicle, owner
the bus trips and issues separate tickets whenever they should be responsible for all damages that may arise as
board the MV "Black Double" that crosses Matnog to consequences of the operation of their service. The claim
Allen. that owner is not liable in view of the lease contract
executed by and between the contracting parties should
Planters Products Inc. vs. Soriamont Steamship & exempt the owner from liability to third persons cannot be
Kyosei Kisen Kabushiki Kaisha & CA\ sustained because it appears that the lease contract had
A public/common carrier shall remain as such, not been approved by the Public Service Commission.
notwithstanding the charter of the whole or portion of a Since the lease is without approval, owner is still
vessel by one or more persons, provided the charter is continued to be the operator in contemplation of law and
limited to the ship only, as in the case of a time-charter or thus should be jointly and severally liable with the drive
voyage-charter. It is only when the charter includes both for damages incurred.
the vessel and its crew, as in a bareboat or demise that a
common carrier becomes private, at least insofar as the Benedicto vs. IAC
particular voyage covering the charter-party is concerned. The prevailing doctrine on common carriers makes the
registered owner liable for consequences flowing from the
IV. GOVERNMENT REGULATION operations of the carrier, even though the specific vehicle
involved may already have been transferred to another
KMU Labor Center vs. Garcia, Jr. person. This doctrine rests upon the principle that in
Given the task of determining sensitive and delicate dealing with vehicles registered under the Public Service
matters as route-fixing and rate-making for the transport Law, the public has the right to assume that the registered
sector, the responsible regulatory body is entrusted with owner is the actual or lawful owner thereof.
the power of subordinate legislation. The LTFRB, may The registered owner is not allowed to deny liability by
implement broad policies laid down in a statute by "filling proving the identity of the alleged transferee.
in" the details which the Legislature may neither have time
or competence to provide. Philtranco Services Enterprises vs. CA
The authority given by the LTFRB to the provincial bus The liability of the registered owner of a public service
operators to set a fare range over and above the vehicle for damages arising from the tortious acts of the
authorized existing fare, is illegal and invalid as it is driver is primary, direct, and joint and several or solidary
tantamount to an undue delegation of legislative authority. with the driver.
Tatad vs. Garcia, Jr. Equitable Leasing Corp vs. Lucita Suyon
While a franchise is needed to operate these facilities to The registered owner is the lawful operator insofar as the
serve the public, they do not by themselves constitute a public and third persons are concerned; consequently, it
public utility. What constitutes a public utility is not their is directly and primarily responsible for the consequences
ownership but their use to serve the public. of its operation. In the eyes of the law, the owner/operator
There is a clear distinction between the "operation" of a of record is the employer of the driver, the actual
public utility and the ownership of the facilities and owner/operator being considered as merely the agent of
equipment used to serve the public. The operation of a the registered owner/operator. The principle applies even
rail system as a public utility includes the transportation of if the registered owner of any vehicle does not use it for
passengers from one point to another point, their loading public service.
and unloading at designated places and the movement of
the trains at pre-scheduled times. Santos vs. Sibug
The registered owner/operator and grantee of the
V. GOVERNING LAW franchise, is directly and primarily responsible and liable
Samar Mining Company vs. Nordeutscher Lloyd for the damages caused to the injured party, as a
The carrier may be relieved of the responsibility for loss consequence of the negligent or careless operation of the
or damage to the goods upon actual or constructive vehicle.
delivery of the same by the carrier to the consignee, or to Lita Enterprise vs. IAC
the person who has a right to receive them. There is The kabit system" is whereby a person who has been
actual delivery in contracts for the transport of goods granted a certificate of convenience allows another
when possession has been turned over to the consignee person who owns motors vehicles to operate under such
or to his duly authorized agent and a reasonable time is franchise for a fee. A certificate of public convenience is
given him to remove the goods. In the present case, there a special privilege conferred by the government. Abuse of
3|A L Y S S A C A B A L A N G
this privilege by the grantees thereof cannot be been at fault or to have acted negligently, unless they
countenanced. prove that they observed extraordinary diligence.
Although not outrightly penalized as a criminal offense,
the "kabit system" is invariably recognized as being Philippine Charter Insurance vs. Unknown Owner
contrary to public policy and, therefore, void and Common carriers duty to observe the requisite diligence
inexistent under Article 1409 of the Civil Code. It is a in the shipment of goods last from the times the articles
fundamental principle that the court will not aid either are surrendered to, or unconditionally placed in the
party to enforce an illegal contract, but will leave them possession of, and received by, the carriers for
both where it finds them. transportation until delivered to, or until the lapse of a
reasonable time for their acceptance, by the person
Teja Marketing vs. IAC entitiled to receive them.
The "kabit system" has been identified as one of the root
causes of the prevalence of graft and corruption in the Saludo vs. CA
government transportation offices. It is a fundamental Extraordinary responsibility of the common carrier begins
principle that the court will not aid either party to enforce from the time the goods are delivered to the carrier. This
an illegal contract, but will leave both where it finds them. responsibility remains in full force and effect even when
they are temporarily unloaded or stored in transit, unless
Magboo vs. Bernardo the shipper or owner exercises the right of stoppage in
There is an employer-employee relationship under a transitu, and terminates only after the lapse of a
boundary system arrangement. The fact that the driver reasonable time for the acceptance of the goods by the
does not receive a fixed wage but gets only the excess of consignee or such other person entitled to receive them.
the receipt of fares collected by him is not sufficient to And, there is delivery to the carrier when the goods are
withdraw the relationship between them from that of ready for and have been placed in the exclusive
employer and employee. To exempt from liability the possession, custody and control of the carrier for the
owner of a public vehicle who operates it under the purpose of their immediate transportation and the carrier
"boundary system" on the ground that he is a mere lessor has accepted them.
would be not only to abet flagrant violations of the Public
Service law but also to place the riding public at the mercy Where such a delivery has thus been accepted by the
of reckless and irresponsible drivers. carrier, the liability of the common carrier commences eo
instanti.
TRANSPORTATION OF GOODS Lorenzo Shipping vs. BJ Marthel
In determining whether time is of the essence in a
3 REQUISITE FOR A VALID STIPULATION LIMITING contract, the ultimate criterion is the actual or apparent
LIABILITY OF CARRIER: (Art. 1744) intention of the parties and before time may be so
regarded by a court, there must be a sufficient
1. In writing, signed by shipper or owner manifestation, either in the contract itself or
2. Supported by a valuable consideration other than the surrounding circumstances of that intention. The law
the service rendered by carriers implies, however, that if no time is fixed, delivery shall be
3. It must be reasonable, just, and not contrary to made within a reasonable time, in the absence of anything
public policy to show that an immediate delivery intended.
5 CIRCUMSTANCES THAT WILL EXEMPT FROM Sealoader Shipping vs. Grand Cement
LIABILITY: The doctrine of last clear chance states that where both
parties are negligent but the negligent act of one is
1. Flood, storm, earthquake, lightning, or other appreciably later than that of the other, or where it is
natural disaster or calamity impossible to determine whose fault or negligence caused
2. Act of the public enemy in war, whether the loss, the one who had the last clear opportunity to
international or civil avoid the loss but failed to do so, is chargeable with the
3. Act or omission of the shipper or owner of the loss. The antecedent negligence of plaintiff does not
goods preclude him from recovering damages caused by the
4. The character of goods or defects in the packing supervening negligence of defendant, who had the last
or in the containers fair chance to prevent the impending harm by the exercise
5. Order or act of competent authority of due diligence.
II. PRESUMPTION OF NEGLIGENCE
I. EXTRAORDINARY DILIGENCE
FGU Insurance vs. CA & San Miguel Corp
Eastern Shipping Lines vs. CA & First Nationwide Caso fortuito or force majeure by definition, are
Assurance Co. extraordinary events not foreseeable or avoidable, events
Common carriers are bound to observe extraordinary that could not be foreseen, or which though foreseen,
vigilance over goods according to all circumstances of were inevitable. It is therefore not enough that the event
each case. Once the carrier has failed to establish any should not have been foreseen or anticipated, as is
caso fortuito, the presumption by law of fault of negligence commonly believed but it must be one impossible to
on the part of carriers applies. foresee or to avoid. To be exempted from responsibility,
the natural disaster should have been the proximate and
Delsan Transport Lines vs. CA only cause of the loss. There must have been no
From the nature of their business and for reasons of contributory negligence on the part of the common carrier.
public policy, common carriers are bound to observe
extraordinary diligence in the vigilance over the goods Delsan Transport vs. American Home
and for the safety of passengers transported by them, Common carriers are bound to observe extraordinary
according to all the circumstances of each case. In all diligence in the vigilance over the goods transported by
other cases, if the goods are lost, destroyed or them. They are presumed to have been at fault or to have
deteriorated, common carriers are presumed to have acted negligently if the goods are lost, destroyed or
deteriorated. To overcome the presumption of negligence
4|A L Y S S A C A B A L A N G
in case of loss, destruction or deterioration of the goods, entered into by the parties and the same is not contrary to
the common carrier must prove that it exercised law, morals, good customs, public order, or public policy.
extraordinary diligence. There are, however, exceptions We stress that in a contract of private carriage, the parties
to this rule found in Article 1734 of the NCC. may freely stipulate their duties and obligations which
perforce would be binding on them. Unlike in contract
Maersk Lines vs. CA involving a common carrier, private carriage does not
While it is true that common carriers are not obligated by involve the general public.
law to carry and to deliver merchandise, and persons are
not vested with the right to prompt delivery, unless such Yobido vs. CA
common carriers previously assume the obligation to The explosion of the new tire is not a fortuitous event.
deliver at a given date or time, delivery of shipment or There are human factors involved in the situation. The fact
cargo should at least be made within reasonable time. that the tire was new did not imply that it was entirely free
DSR-Senator Lines vs. Federal Phoenix from manufacturing defects or that it was properly
Fire is not one of those enumerated under Article 1734 mounted on the vehicle. Neither may the fact that the tire
which exempts a carrier from liability for loss or bought and used is of a brand name noted for quality,
destruction of the cargo. Common carrier shall be resulting in the conclusion that it could not explode within
presumed to have been at fault or to have acted five days use. Itis settled that an accident caused either
negligently, unless it proves that it has observed the by defects in the automobile or through the negligence of
extraordinary diligence required by law. Even if fire were its driver is not a caso fortuito. Moreover, a common
to be considered a natural disaster within the purview of carrier may not be absolved from liability in case of force
Article 1734, it is required under Article 1739of the same majeure. A common carrier must still prove that it was not
Code that the natural disaster must have been the negligent in causing the death or injury resulting from the
proximate and only cause of the loss, and that the carrier accident. Thus, having failed to overthrow the
has exercised due diligence to prevent or minimize the presumption of negligence with clear and convincing
loss before, during or after the occurrence of the disaster. evidence, petitioners are hereby held liable for damages.
5|A L Y S S A C A B A L A N G
Southern Lines, Inc. vs. CA
If the fact of improper packing is known to the carrier or Samar Mining Company vs. Nordeutscher Lloyd
his servants, or apparent upon ordinary observation, but The carrier may be relieved of the responsibility for loss
it accepts the goods notwithstanding such condition, it is or damage to the goods upon actual or constructive
not relieved of liability for loss or injury resulting therefrom. delivery of the same by the carrier to the consignee, or to
the person who has a right to receive them. There is
IV. DURATION OF RESPONSIBILITY actual delivery in contracts for the transport of goods
when possession has been turned over to the consignee
Mitsui OSK Lines vs. CA or to his duly authorized agent and a reasonable time is
As defined in the Civil Code and as applied to Section given him to remove the goods. In the present case, there
3(6), paragraph 4 of the Carriage of Goods by Sea Act, was actual delivery to the consignee through its duly
loss contemplates merely a situation where no delivery at authorized agent, the carrier. Upon such delivery, the
all was made by the shipper of the goods because the appellant, as erstwhile carrier, ceases to be responsible
same had perished, gone out of commerce, or for any loss or damage that may befall the goods from that
disappeared in such a way that their existence is unknown point onwards.
or they cannot be recovered. As long as it is claimed,
therefore, as it is done here, that the losses or damages Ganzon vs. CA
suffered by the shipper or consignee were due to the By the said act of delivery, the scraps were
arrival of the goods in damaged or deteriorated condition, unconditionally placed in the possession and control of
the action is still basically one for damage to the goods, the common carrier, and upon their receipt, the contract
and must be filed within the period of one year from of carriage was deemed perfected. Consequently, the
delivery or receipt. petitioner-carrier's extraordinary responsibility for the
loss, destruction or deterioration of the goods
Sulpicio Lines vs. First Lepanto-Taisho Insurance commenced. Pursuant to Art. 1736, such extraordinary
Damage to the packaging is not tantamount to damage to responsibility would cease only upon the delivery, actual
the cargo. It must be stressed that the damage sustained or constructive, by the carrier to the consignee, or to the
by the packaging of the cargo while in carriers custody person who has a right to receive them. The fact that part
resulted in its unfitness to be transported to its consignee of the shipment had not been loaded on board the lighter
in Singapore. Such failure to ship the cargo to its final did not impair the said contract of transportation as the
destination because of the ruined packaging, indeed, goods remained in the custody and control of the carrier,
resulted in damages on the part of the owner of the goods. albeit still unloaded.
A common carrier is bound to transport its cargo and its The petitioner has failed to show that the loss of the
passengers safely "as far as human care and foresight scraps was due to any of the following causes
can provide, using the utmost diligence of a very cautious enumerated in Article 1734 of the Civil Code. Hence, the
person, with due regard to all circumstances." The petitioner is presumed to have been at fault or to have
extraordinary diligence in the vigilance over the goods acted negligently.
tendered for shipment requires the common carrier to
know and to follow the required precaution for avoiding Saludo vs. CA
the damage to, or destruction of, the goods entrusted to it Extraordinary responsibility of the common carrier begins
for safe carriage and delivery. from the time the goods are delivered to the carrier. This
responsibility remains in full force and effect even when
Coastwise Lighterage Corporation vs. CA they are temporarily unloaded or stored in transit, unless
Two kinds of charter partiescharter by demise or the shipper or owner exercises the right of stoppage in
bareboat charter, and contract of affreightment. Although transitu, and terminates only after the lapse of a
a charter party may transform a common carrier into a reasonable time for the acceptance of the goods by the
private one, the same however is not true in a contract of consignee or such other person entitled to receive them.
affreightment. And, there is delivery to the carrier when the goods are
Common carriers, as a general rule, are presumed to ready for and have been placed in the exclusive
have been at fault or negligent if the goods they possession, custody and control of the carrier for the
transported deteriorated or got lost or destroyed. It may purpose of their immediate transportation and the carrier
also logically, follow that a person without license to has accepted them.
navigate, lacks not just the skill to do so, but also the Where such a delivery has thus been accepted by the
utmost familiarity with the usual and safe routes taken by carrier, the liability of the common carrier commences eo
seasoned and legally authorized ones instanti.
7|A L Y S S A C A B A L A N G
when it allowed Mahtani to testify as to the actual TRANSPORTATION OF PASSENGERS
damages he incurred due to the misplacement of his
luggage, without any objection. I. EXTRAORDINARY DILIGENCE
Loadstar Shipping Co. vs. CA Norcum vs. Laguna Tayabas Bus Company
The law imposes duties and liabilities upon common While it is true the passengers of appellant's bus should
carriers for the safety and protection of those who utilize not be made to suffer for something over which they had
their services and the law cannot allow a common carrier no control, fairness demands that in measuring a common
to render such duties and liabilities merely facultative by carrier's duty towards its passengers, allowance must be
simply failing to obtain the necessary permits and given to the reliance that should be reposed on the sense
authorizations. of responsibility of all the passengers in regard to their
A certificate of public convenience is not a requisite for the common safety. It is to be presumed that a passenger will
incurring of liability under the Civil Code provisions not take with him anything dangerous to the lives and
governing common carriers. That liability arises the limbs of his co-passengers, not to speak of his own.
moment a person or firm acts as a common carrier, Of course, when there are sufficient indications that the
without regard to whether or not such carrier has also representations of the passenger regarding the nature of
complied with the requirements of the applicable his baggage may not be true, in the interest of the
regulatory statute and implementing regulations and has common safety of all, the assistance of the police
been granted a certificate of public convenience or other authorities may be solicited, not necessarily to force the
franchise. To exempt private respondent from the passenger to open his baggage, but to conduct the
liabilities of a common carrier because he has not secured needed investigation consistent with the rules of propriety
the necessary certificate of public convenience, would be
offensive to sound public policy. Mecenas vs. CA
The behavior of the captain of the Don Juan in tills
VII. PASSENGERS BAGGAGE instance playing mahjong before and up to the time of
collision constitutes behavior that is simply unacceptable
Quisumbing, Sr. vs. CA on the part of the master of a vessel to whose hands the
The Court ruled that under the highjacking-robbery was lives and welfare of at least 750 passengers had been
force majeure. Observing that hijackers do not board an entrusted. Whether or not Captain Santisteban was "off-
airplane through a blatant display of firepower and violent duty" or "on-duty" at or around the time of actual collision
fury. The robbers were able to gain entrance to the plane is quite immaterial; there is, both realistically speaking
with the guns they used already in their possession, which and in contemplation of law, no such thing as "off-duty"
fact could not have been prevented nor avoided by the hours for the master of a vessel at sea that is a common
defendant. Hence, making it force majeure. The Court carrier upon whom the law imposes the duty of
ruled that PAL could not be faulted for want of diligence, extraordinary diligence.
particularly for failing to take positive measures. Article 1755 repeats this same qualification: "A common
carrier is bound to carry the passengers safely as far as
Pan American World Airways vs. Jose Rapadas & CA human care and foresight can provide, using the utmost
Plane ticket is what is known as a contract of "adhesion", diligence of very cautious persons, with due regard for
in regards which it has been said that contracts of all the circumstances."
adhesion wherein one party imposes a ready-made form
of contract on the other, as the plane ticket in the case at Negros Navigation vs. CA
bar, are contracts not entirely prohibited. The one who The Court relied on the findings of this Court in Mecenas
adheres to the contract is in reality free to reject it entirely; v. Intermediate Appellate Court, which case was brought
if he adheres, he gives his consent. for the death of other passengers. In that case it was
If the loss of life or property is caused by the gross found that although the proximate cause of the mishap
negligence or arbitrary acts of the airline or the contents was the negligence of the crew. Negros Navigation was
of the lost luggage are proved by satisfactory evidence found equally negligent in tolerating the playing of
other than the self-serving declarations of one party, the mahjong by the ship captain and other crew members
Court will not hesitate to disregard the fine print in a while on board the ship and failing to keep the M/V Don
contract of adhesion. Otherwise, the Court is constrained Juan seaworthy so much so that the ship sank.
to rule and to enforce the contract as it is the only
reasonable basis to arrive at a just award. Calalas vs. CA
In quasi-delict, the negligence or fault should be clearly
British Airways vs. CA established because it is the basis of the action, whereas
The nature of an airline's contract of carriage partakes of in breach of contract, the action can be prosecuted merely
two types, namely: a contract to deliver a cargo or by proving the existence of the contract and the fact that
merchandise to its destination and a contract to transport the obligor, in this case the common carrier, failed to
passengers to their destination. A business intended to transport his passenger safely to his destination. In case
serve the traveling public primarily, it is imbued with public of death or injuries to passengers, Art. 1756 of the Civil
interest, hence, the law governing common carriers Code provides that common carriers are presumed to
imposes an exacting standard. have been at fault or to have acted negligently unless they
Neglect or malfeasance by the carrier's employees could prove that they observed extraordinary diligence.
predictably furnish bases for an action for damages.
However, the Supreme Court has held that benefits of Pilapil vs. CA
limited liability are subject to waiver such as when the air A common carrier does not give its consent to become an
carrier failed to raise timely objections during the trial insurer of any and all risks to passengers and goods. It
when questions and answers regarding the actual claims merely undertakes to perform certain duties to the public
and damages sustained by the passenger were asked. as the law imposes, and holds itself liable for any breach
thereof.
A tort committed by a stranger, which causes injury to a
passenger does not accord the latter a cause of action
against the carrier. The negligence for which a common
carrier is held responsible is the negligent omission by the
8|A L Y S S A C A B A L A N G
carrier's employees to prevent the tort from being passengers incurred cannot be charged to JAL. The
committed when the same could have been foreseen and predicament of the private respondents was not due to the
prevented by them. fault or negligence of JAL. JAL had the duty to arrange
the respondents flight back to Manila. However, it failed
A. Last Clear Chance Doctrine to look after the comfort and convenience of its
passengers when it made the passengers arrange their
Philippine Rabbit Bus vs. IAC flight back to Manila on their own and after waiting in the
The principle about "the last clear" chance, would call for airport for a whole day.
application in a suit between the owners and drivers of the
two colliding vehicles. It does not arise where a passenger II. DURATION OF RESPONSIBILITY
demands responsibility from the carrier to enforce its
contractual obligations. For it would be inequitable to Jesusa Vda. De Nueca vs. Manila Railroad
exempt the negligent driver of the jeepney and its owners Even disregarding the matter of tickets, and assuming
on the ground that the other driver was likewise guilty of Nueca intended to be a passenger, he was never
negligence. accepted as such by MRC as he did not present himself
at the proper place and in a proper manner to be
Bustamante vs. CA transported. Nueca was not a passenger thus, MRC did
The doctrine of last clear chance means that even though not owe him extraordinary diligence. While railroad
a person's own acts may have placed him in a position of companies are not bound to the same degree of care in
peril, and an injury results, the injured person is entitled to regard to strangers who are unlawfully upon the premises
recovery. A person who has the last clear chance or of its passengers, it may still be liable to such strangers
opportunity of avoiding an accident, notwithstanding the for negligent or tortious acts. The train was under the
negligent acts of his opponent or that of a third person complete control of the railroad company at the time of the
imputed to the opponent is considered in law solely accident. The baggage car would not have been derailed
responsible for the consequences of the accident. Since if the train had been properly operated.
the case at bar is not a suit between the owners and
drivers of the colliding vehicles but a suit brought by the Dangwa Transportation vs. CA
heirs of the deceased passengers against both owners The victim herein, by stepping and standing on the
and drivers of the colliding vehicles the court erred platform of the bus, is already considered a passenger
in absolving the owner and driver of the cargo truck from and is entitled all the rights and protection pertaining to
liability. such a contractual relation. Hence, it has been held that
the duty which the carrier passengers owes to its patrons
extends to persons boarding cars as well as to those
B. Accommodation Passenger alighting therefrom. It is the duty of common carriers of
passengers, including common carriers by railroad train,
Lara vs. Valencia streetcar, or motorbus, to stop their conveyances a
The deceased, as well as his companions who rode in the reasonable length of time in order to afford passengers an
pick-up of Valencia, were merely accommodation opportunity to board and enter, and they are liable for
passengers who paid nothing for the service and so they injuries suffered by boarding passengers resulting from
can be considered as invited guests within the meaning the sudden starting up or jerking of their conveyances
of the law. As accommodation passengers or invited while they are doing so.
guests, Valencia as owner and driver of the pick-up owes
to them merely the duty to exercise reasonable care so
that they may be transported safely to their destination. La Mallorca vs CA
The rule is established by the weight of authority that the The relation of carrier and passenger does not
owner or operator of an automobile owes the duty to an necessarily cease where the latter, after alighting from the
invited guest to exercise reasonable care in its operation, car, aids the carrier's servant or employee in removing his
and not unreasonably to expose him to danger and injury baggage from the car. The issue to be determined here is
by increasing the hazard of travel. Since one riding in an whether as to the child, who was already led by the father
automobile is no less a guest because he asked for the to a place about 5 meters away from the bus, the liability
privilege of doing so. Valencia, therefore, is only required of the carrier for her safety under the contract of carriage
to observe ordinary care, and is not in duty bound to also persisted.
exercise extraordinary diligence as required of a common It has been recognized as a rule that the relation of carrier
carrier by Philippine law. and passenger does not cease at the moment the
passenger alights from the carrier's vehicle at a place
C. Not an Insurer Against All Risks selected by the carrier at the point of destination, but
continues until the passenger has had a reasonable time
Necessito vs. Paras or a reasonable opportunity to leave the carrier's
While the carrier is not an insurer of the safety of the premises.
passengers, the manufacturer of the defective appliance
is considered in law the agent of the carrier, and the good
repute of the manufacturer will not relieve the carrier from Aboitiz Shipping vs. CA
liability. The rationale of the carriers liability is the fact that All persons who remain on the premises a reasonable
the passengers has no privity with the manufacturer of the time after leaving the conveyance are to be deemed
defective equipment; hence, he has no remedy against passengers, and what is a reasonable time or a
him, while the carrier has. reasonable delay within this rule is to be determined from
all the circumstances, and includes a reasonable time to
Japan Airlines vs. CA see after his baggage and prepare for his departure. The
When a party is unable to fulfill his obligation because of carrier-passenger relationship is not terminated merely by
force majeure, the general rule is that he cannot be held the fact that the person transported has been carried to
liable for damages for non-performance. When JAL was his destination if, for example, such person remains in the
prevented from resuming its flight to Manila due to the carrier's premises to claim his baggage.
effects of the eruption, whatever losses or damages in the Yet, even if he had already disembarked an hour earlier,
form of hotel and meal expenses the stranded his presence in petitioner's premises was not without
9|A L Y S S A C A B A L A N G
cause. The victim had to claim his baggage which was Petitioner did not have direct evidence on what transpired
possible only one (1) hour after the vessel arrived since it within as the officers and crew maneuvered the vessel to
was admittedly standard procedure in the case of its berthing place. Applying now the above, there exists a
petitioner's vessels that the unloading operations shall presumption of negligence against private respondents
start only after that time. which we opine the latter failed to overcome.
Yobido vs. CA 1. One exempting the carrier from any and all liability
The explosion of the new tire may not be considered a for loss or damage occasioned by its own
fortuitous event. There are human factors involved in the negligence.
situation. The fact that the tire was new did not imply that 2. One providing for an unqualified limitation of such
it was entirely free from manufacturing defects or that it liability to an agreed valuation.
was properly mounted on the vehicle. The common 3. One limiting the liability of the carrier to an agreed
carrier must still prove that it was not negligent in causing valuation unless the shipper declares a higher
the death or injury resulting from an accident. value and pays a higher rate of freight.
According to an almost uniform weight of authority, the
Bayasen vs. CA first and second kinds of stipulations are invalid as being
Under the particular circumstances of the instant case, contrary to public policy, but the third is valid and
the petitioner- driver who skidded could not be regarded enforceable. The present case falls within the third
as negligent, the skidding being an unforeseen event, so stipulation.
that the petitioner had a valid excuse for his departure
from his regular course. The negligence of the petitioner Macondray Co. vs. Acting Commissioner of Customs
not having been sufficiently established, his guilt of the This is for the simple reason that while a manifest is a
crime charged has not been proven beyond reasonable declaration of the entire cargo, a bill of lading is but a
doubt. He is, therefore, entitled to acquittal. declaration of a specific part of the cargo and is a matter
Gatchalian vs. Delim of business convenience based exclusively on a contract.
For a waiver to be valid and effective, it must not be
contrary to law, morals, public policy or good customs.
Waiver (Joint Affidavit) signed by the victims cannot be
considered as a valid waiver limiting the bus companys
liability after the incident took place as well as waive their
right to action or file a complaint.
12 | A L Y S S A C A B A L A N G
Such a provision is prohibited by no rule of law nor by any
MANIFEST CARGO BILL OF LADING consideration of public policy. Nor is it at all affected by
to furnish the customs ordinarily merely a the existence within the jurisdiction of a statutory or
officers with a list to convenient commercial constitutional prohibition against carriers limiting or
check against, to inform instrument designed to restricting their common law liability, since it is held that
our revenue officers what protect the importer or such a stipulation does not in any way defeat the
goods are being brought consignee complete vestiture of the right to recover, but merely
into the country, and to requires the assertion of that right by action at an earlier
provide a safeguard period than would be necessary to defeat it through the
against goods being operation of the ordinary statute of limitations. But the
brought into this country limitation must be reasonable, and if the period of time
on a vessel and then specified is such that under the facts of the particular case
smuggled ashore the shipper could not with reasonable diligence be
absolutely essential to enabled to bring suit before it expired, the attempted
the exportation or limitation is void. Thus, a provision that suit must be
importation of property in brought within thirty days after the loss or damage
all vessels occurred has been held unreasonable. carrier cannot limit
its liability for injury to or loss of goods shipped where
The purpose served by the manifest is far different from such injury or loss was caused by its own negligence.
that of the bill of lading, the Court cannot accept or place
an imprimatur on the contention of petitioner that the Shewaram vs. PAL
entries in the bill of lading adequately supplied the It cannot be said that the appellee had actually entered
deficiency of the manifest and cured it of its infirmity. into a contract with the appellant, embodying the
conditions as printed at the back of the ticket stub that was
Magellan Manufacturing vs. CA issued by the appellant to the appellee. The fact that
Transhipment is defined as the act of taking those conditions are printed at the back of the ticket stub
cargo out of one ship and loading it in in letters so small that they are hard to read would not
another or; the transfer of goods from the warrant the presumption that the appellee was aware of
vessel stipulated in the contract of those conditions such that he had "fairly and freely
affreightment to another vessel before the agreed" to those conditions.
place of destination named in the contract
has been reached.
Ong Yiu vs. CA
It is a long standing jurisprudential rule that a bill of lading The total liability of the Carrier for lost or damaged
operates both as a receipt and as a contract. It is a receipt baggage of the passenger is LIMITED TO P100.00 for
for the goods shipped and a contract to transport and each ticket unless a passenger declares a higher
deliver the same as therein stipulated. valuation in excess of P100.00, but not in excess,
The holding in most jurisdictions has been that a shipper however, of a total valuation of P1,000.00 and additional
who receives a bill of lading without objection after an charges are paid pursuant to Carrier's tariffs. There is no
opportunity to inspect it, and permits the carrier to act on dispute that petitioner did not declare any higher value for
it by proceeding with the shipment is presumed to have his luggage, much less did he pay any additional
accepted it as correctly stating the contract and to have transportation charge.
assented to its terms. In other words, the acceptance of While it may be true that petitioner had not signed the
the bill without dissent raises the presumption that all the plane ticket, he is nevertheless bound by the provisions
terms therein were brought to the knowledge of the thereof. "Such provisions have been held to be a part of
shipper and agreed to by him and, in the absence of fraud the contract of carriage, and valid and binding upon the
or mistake, he is estopped from thereafter denying that he passenger regardless of the latter's lack of knowledge or
assented to such terms. assent to the regulation" (known as contract of adhesion).
Considering, therefore, that petitioner had failed to
Saludo vs. CA declare a higher value for his baggage, he cannot be
Extraordinary responsibility of the common carrier begins permitted a recovery in excess of P100.00. Besides,
from the time the goods are delivered to the carrier. This passengers are advised not to place valuable items inside
responsibility remains in full force and effect even when their baggage but "to avail of our V-cargo service ". It is
they are temporarily unloaded or stored in transit, unless likewise to be noted that there is nothing in the evidence
the shipper or owner exercises the right of stoppage in to show the actual value of the goods allegedly lost by
transitu, and terminates only after the lapse of a petitioner.
reasonable time for the acceptance of the goods by the
consignee or such other person entitled to receive them. Aboitiz Shipping vs. CA
And, there is delivery to the carrier when the goods are While it is true that in the bill of lading there is such
ready for and have been placed in the exclusive stipulation that the liability of the carrier is US$500.00 per
possession, custody and control of the carrier for the package/container/customary freight, there is an
purpose of their immediate transportation and the carrier exception, that is, when the nature and value of such
has accepted them. goods have been declared by the shipper before
Where such a delivery has thus been accepted by the shipment and inserted in the bill of lading.
carrier, the liability of the common carrier commences eo In no event shall the carrier be liable for more than the
instanti. amount of damage actually sustained. Neither the carrier
nor the ship shall be responsible in any event for loss or
damage to or in connection with the transportation of the
Ysmael vs. Barretto goods if the nature or value thereof has been knowingly
The parties may, if they see fit, fix by agreement a shorter and fraudulently misstated by the shipper in the bill of
time for the bringing of suit on the contract than that lading. In this case the description of the nature and the
provided by the statute of limitations, and if the period value of the goods shipped are declared and reflected in
therein limited is reasonable, suit must be brought within the bills of lading. Thus, it is the basis of the liability of the
that time or the shippers right of action will be barred. carrier as the actual value of the loss.
13 | A L Y S S A C A B A L A N G
Sea-Land vs. IAC Sweet Lines vs. Teves
Sec. 4(5) of Carriage of Goods by Sea Act reads: The Supreme Court held that the condition printed at the
Neither the carrier nor the ship shall in any event back of the ticket limiting the venue of actions arising from
be or become liable for any loss or damage to or the contract is void and unenforceable because it
in connection with the transportation of goods in subverts the public policy on transfer of venue of
an amount exceeding $500 per package lawful proceeding. Furthermore, it will prejudice the rights and
money of the United States, or in case of goods interests of innumerable passengers located in different
not shipped in packages, per customary freight places of the country, who, under the condition, will have
unit, or the equivalent of that sum in other to file suits against petitioner only in the City of Cebu.
currency, unless the nature and value of such Thus, such condition will likewise defeat the ends of
goods have been declared by the shipper before justice.
shipment and inserted in the bill of lading. This
declaration, if embodied in the bill of lading, shall
be prima facie evidence, but shall not be Alitalia vs. IAC
conclusive on the carrier. Under the Warsaw Convention, an air carrier is made
liable for damages for the delay in the transportation by
There is no question of right of a consignee in a bill of air of passengers, luggage or goods. The Convention also
lading to recover from the carrier shipper for loss of, or purports to limit the liability of the carriers. The Warsaw
damage to, goods being transported under said bill, Convention however denies to the carrier availment "of
although that document may have been drawn up only by the provisions which exclude or limit his liability, if the
the consignor and the carrier without the intervention of damage is caused by his willful misconduct or by such
the consignee. default on his part as, in accordance with the law of the
court seized of the case, is considered to be equivalent to
Citadel Lines vs. CA willful misconduct.
It is clearly and expressly provided under Clause 6 of the In the case at bar, no bad faith or otherwise improper
aforementioned bills of lading issued by the CARRIER conduct may be ascribed to the employees of petitioner
that its liability is limited to $2.00 per kilo. Basic is the rule, airline; and Dr. Pablo's luggage was eventually returned
long since enshrined as a statutory provision that a to her, belatedly, it is true, but without appreciable
stipulation limiting the liability of the carrier to the value of damage.
the goods appearing in the bill of lading, unless the As the petitioner put it, she "was really shocked and
shipper or owner declares a greater value, is binding. distraught and confused." Certainly, the compensation for
Further, a contract fixing the sum that may be recovered the injury suffered by Dr. Pablo cannot under the
by the owner or shipper for the loss, destruction or circumstances be restricted to that prescribed by the
deterioration of the goods is valid, if it is reasonable and Warsaw Convention for delay in the transport of baggage.
just under the circumstances, and has been fairly and
freely agreed upon. Pan American World Airways vs. IAC
Petitioner cites the case of Ong Yiu, where the Court
Everett Steamship sustained the validity of a printed stipulation at the back
In the bill of lading, the carrier made it clear that its liability of an airline ticket limiting the liability of the carrier for lost
would only be up to One Hundred Thousand baggage to a specified amount and ruled that the carrier's
(Y100,000.00) Yen. However, the shipper, Maruman liability was limited to said amount since the passenger
Trading, had the option to declare a higher valuation if the did not declare a higher value, much less pay additional
value of its cargo was higher than the limited liability of the charges. The petition has merit, and Ong Yiu is applicable
carrier. Considering that the shipper did not declare a to the instant case.
higher valuation, it had itself to blame for not complying In view thereof petitioner's liability for the lost baggage is
with the stipulations. limited to $20.00 per kilo or $600.00, as stipulated at the
To defeat the carriers limited liability, the aforecited back of the ticket.
Clause 18 of the bill of lading requires that the shipper
should have declared in writing a higher valuation of its China Airlines vs. Chiok
goods before receipt thereof by the carrier and insert the It is significant to note that the contract of air
said declaration in the bill of lading, with the extra freight transportation was between CAL and respondent, with the
paid. These requirements in the bill of lading were never former endorsing to PAL the Hong Kong to Manila
complied with by the shipper, hence, the liability of the segment of the journey. Such contract of carriage has
carrier under the limited liability clause stands. always been treated in this jurisdiction as a single
operation. Warsaw Convention provides that:
British Airways vs. CA transportation to be performed by several successive air
American jurisprudence provides that an air carrier is not carriers shall be deemed, for the purposes of this
liable for the loss of baggage in an amount in excess of Convention, to be one undivided transportation, if it has
the limits specified in the tariff which was filed with the been regarded by the parties as a single operation,
proper authorities, such tariff being binding, on the whether it has been agreed upon under the form of a
passenger regardless of the passenger's lack of single contract or of a series of contracts.
knowledge thereof or assent thereto. This doctrine is
Since he had secured confirmation of his flight not only
recognized in this jurisdiction. once, but twice by personally going to the carriers offices
The Court, in addition, held that benefits of limited liability
where he was consistently assured of a seat thereon
are subject to waiver such as when the air carrier failed to
PALs negligence was so gross and reckless that it
raise timely objections during the trial when questions and
amounted to bad faith. In view of the foregoing, we rule
answers regarding the actual claims and damages that moral and exemplary damages were properly
sustained by the passenger were asked. Given the
awarded by the lower courts.
foregoing postulates, the inescapable conclusion is that
BA had waived the defense of limited liability when it Santos III vs. Northwest Orient Airlines
allowed Mahtani to testify as to the actual damages he
The Warsaw Convention is a treaty commitment
incurred due to the misplacement of his luggage, without
voluntarily assumed by the Philippine government and, as
any objection. such, has the force and effect of law in this country.
14 | A L Y S S A C A B A L A N G
By its own terms, it applies to all international Tiu vs. Arriesgado
transportation of persons performed by aircraft for hire. This is because under the said contract of carriage, the
Since the flight involved in this case is international, it is petitioners assumed the express obligation to transport
subject to the provisions of the Warsaw Convention. the respondent and his wife to their destination safely and
The place of destination, within the meaning of the to observe extraordinary diligence with due regard for all
Warsaw Convention, is determined by the terms of the circumstances. Any injury suffered by the passengers in
contract or carriage or, specifically in this case, the ticket. the course thereof is immediately attributable to the
Examination of petitioners ticket shows that his ultimate negligence of the carrier. Upon the happening of the
destination is San Francisco. Although the date of the accident, the presumption of negligence at once arises,
return flight was left open, the contract of carriage and it becomes the duty of a common carrier to prove that
between the parties indicates that NOA was bound to he observed extraordinary diligence in the care of his
transport petitioner from Manila to San Francisco. Manila passengers.
should therefore be considered merely an agreed
stopping place and not the destination. Hence, Philippine Phil. Am. Gen. Insurance & Tagum vs. Sweet Lines
courts have no jurisdiction over the case. Philamgen asserted that the bills of lading with
prescriptive period were contracts of adhesion and that
United Airlines vs. Uy such provisions were contrary to law and public policy
Supreme Court held that although the 2-year prescriptive and thus, Sweet Lines cannot avail of such prescriptive
period under the Warsaw Convention has lapsed, it did period as a valid defense. The SC said that Philamgens
not preclude the application of other pertinent provisions failure to deny under oath the existence of the bills of
of the Civil Code which prescribe a different period or lading was tantamount to an admission of its existence.
procedure for instituting the action, specifically, Art. 1146 In Ong Yu vs CA SC held that contracts of adhesion are
thereof which prescribes four (4) years for filing an action not entirely prohibited. The one who adheres to the
based on torts. Thus, the action for damages could still be contract is in reality free to reject it entirely; if he adheres
filed. he gives his consent. Philamgen, thus, gave its consent
Supreme Court found that there was an exception to the to the contractsthe bills of ladingincluding consent to
applicability of the 2-year prescriptive period that is the prescriptive periods therein. The SC also agreed with
when the airline employed delaying tactics and gave the the CA that parties can stipulate a shorter prescriptive
passenger the run-around. Verily, respondent filed his period for the filing of suits.
complaint more than two (2) years later, but it is obvious The SC said ruled the validity of a contractual limitation of
that respondent was forestalled from immediately filing an time for filing the suit itself against a carrier shorter than
action by but not giving in to his demands. the statutory period therefor has generally been upheld as
Also, the Convention does not preclude the operation of such stipulation merely affects the shipper's remedy and
the Civil Code and other pertinent laws. It does not does not affect the liability of the carrier. In the absence
regulate, much less exempt, the carrier from liability for of any statutory limitation and subject only to the
damages for violating the rights of its passengers under requirement on the reasonableness of the stipulated
the contract of carriage, especially if willful misconduct on limitation period, the parties to a contract of carriage may
the part of the carrier's employees is found or established. fix by agreement a shorter time for the bringing of suit on
a claim for the loss of or damage to the shipment than that
ON ACTIONS AND DAMAGES IN CASE OF BREACH provided by the statute of limitations.
Spouses Fabre vs. CA Dole Phils. Inc. vs. Maritime Co. of the Philippines
The Supreme Court held that this case actually involves
a contract of carriage. Petitioners, the Fabres, did not Carriage of Goods by Sea Act, in its Section 3, paragraph 6,
provides that:
have to be engaged in the business of public
the carrier and the ship shall be discharged from all
transportation for the provisions of the Civil Code on liability in respect of loss or damage unless suit is
common carriers to apply to them. Art. 1732 makes no brought within one year after delivery of the goods
distinction between one whose principal business activity or the date when the goods should have been
is the carrying of persons or goods or both, and one who delivered; Provided, That, if a notice of loss or
does such carrying only as an ancillary activity. damage, either apparent or conceded, is not given
as provided for in this section, that fact shall not
affect or prejudice the right of the shipper to bring
Air France vs. Carrascoso suit within one year after the delivery of the goods
There exists a contract of carriage between Air France or the date when the goods should have been
and Carrascoso. There was a contract to furnish delivered
Carrasocoso a first class passage; Second, That said
contract was breached when Air France failed to furnish The substance of its argument is that since the provisions
first class transportation at Bangkok; and Third, that there of the Civil Code are, by express mandate of said Code,
was bad faith when Air Frances employee compelled suppletory of deficiencies in the Code of Commerce and
Carrascoso to leave his first class accommodation special laws in matters governed by the latter, and there
berth after he was already, seated and to take a seat in being "a patent deficiency with respect to the tolling of the
the tourist class, by reason of which he suffered prescriptive period" provided for in the Carriage of Goods
inconvenience, embarrassments and humiliations, by Sea Act, prescription under said Act is subject to the
thereby causing him mental anguish, serious anxiety, provisions of Article 1155 of the Civil Code on tolling.
wounded feelings and social humiliation, resulting in These arguments might merit weightier consideration
moral damages. were it not for the fact that the question has already
There is also a tortuous act based on culpa aquiliana. received a definitive answer. To which, the Supreme
Passengers do not contract merely for transportation. Court ruled that in a case governed by the Carriage of
They have a right to be treated by the carriers employees Goods by Sea Act, the general provisions of the Code of
with kindness, respect, courtesy and due consideration. Civil Procedure on prescription should not be made to
They are entitled to be protected against personal apply.
misconduct, injurious language, indignities and abuses Similarly, we now hold that in such a case the general
from such employees. provisions of the new Civil Code (Art. 1155) cannot be
made to apply, as such application would have the effect
of extending the one-year period of prescription fixed in
15 | A L Y S S A C A B A L A N G
the law. It is desirable that matters affecting transportation De Caliston vs. CA
of goods by sea be decided in as short a time as possible; Under Article 2206 of the Civil Code: The amount of
the application of the provisions of Article 1155 of the new damages for death caused by a crime or quasi-delict shall
Civil Code would unnecessarily extend the period and be at least three thousand pesos, even though there may
permit delays in the settlement of questions affecting have been mitigating circumstances. In addition, the
transportation, contrary to the clear intent and purpose of defendant shall be liable for the loss of the earning
the law. capacity of the deceased, and the indemnity shall be paid
to the heirs of the latter. The pension of the decedent
Maritime Agencies vs. CA being a sure income that was cut short by her death for
A voyage charter being a private carriage, the parties may which Dalmacio was responsible, the surviving heir of the
freely contract respecting liability for damage to the goods former is entitled to the award of P 10,000.00 which is just
and other matters. The basic principle is that "the equivalent to the pension the decedent would have
responsibility for cargo loss falls on the one who agreed received for one year if she did not die.
to perform the duty involved" in accordance with the terms
of most voyage charters. This is true in the present cases Trans World Airlines vs. CA
where the charterer was responsible for loading, stowage The Court held that the petitioner is liable for moral and
and discharging at the ports visited, while the owner was exemplary damages. The discrimination in this case is
responsible for the care of the cargo during the voyage. obvious and the humiliation brought to the respondent is
The liability imposable upon it cannot be borne by indisputable. The petitioner showed lack of care in
Maritime which, as a mere agent, is not answerable for accommodating the respondent in the class that the latter
injury caused by its principal. It is a well-settled principle contracted. In addition, the petitioner rudely informed the
that the agent shall be liable for the act or omission of the respondent of such downgrading of class. Such awarding
principal only if the latter is undisclosed. The charterer did of damages would serve as an example and a
not represent itself as a carrier and indeed assumed discouragement to carriers who may repeat such
responsibility ability only for the unloading of the cargo, oppressive and discriminatory acts.
i.e, after the goods were already outside the custody of
the vessel. Maritime acted in representation of the Prudenciado vs. Alliance Transport System Inc.
charterer and not of the vessel; thus cannot be considered A careful review of the records makes it readily apparent
a ship agent. As a mere charterer's agent, it cannot be that the injuries sustained by Dra. Prudenciado are not as
held solidarily liable with Transcontinental for the serious or extensive as they were claimed to be, to
losses/damages to the cargo outside the custody of the warrant the damages awarded by the trial court. In fact, a
vessel. closer scrutiny of the exhibits showed only a moderate
damage to the car, not to mention the fact that such
Zulueta vs. Pan American World Airways injuries were not supported by the medical findings
Passengers do not contract merely for transportation. presented.
They have a right to be treated by the carrier's employees Unquestionably, therefore, the damages imposed by the
with kindness, respect, courtesy and due consideration. lower court should be reduced to more reasonable level.
They are titled to be protected against personal On the other hand, it will be observed that the reduction
misconduct, injurious language, indignities and abuses of the damages made by the Court of Appeals is both too
from such employees. So it is, that any rude or drastic and unrealistic, to pass the test of reasonableness,
discourteous conduct on the part of employees towards a which appears to be the underlying basis to justify such
passenger gives the latter an action for damages against reduction. While the damages sought to be recovered
the carrier. Where a conductor uses language to a were not satisfactorily established to the extent desired by
passenger which is calculated to insult, humiliate, or the petitioner, it was nonetheless not disputed that an
wound the feelings of a person of ordinary feelings and accident occurred due to the fault and negligence of the
sensibilities, the carrier is liable, because the contract of respondent.
carriage impliedly stipulates for decent, courteous, and
respectful treatment, at hands of the carrier's employees.
Gatchalian vs. Delim
To uphold a supposed waiver of any right to claim
damages by an injured passenger, under circumstances
like those exhibited in this case, would be to dilute and
weaken the standard of extraordinary diligence exacted
by the law from common carriers and hence to render that
standard unenforceable.
Because what is involved here is the liability of a common
carrier for injuries sustained by passengers in respect of
whose safety a common carrier must exercise
extraordinary diligence, SC construed any such purported
waiver most strictly against the common carrier. For a
waiver to be valid and effective, it must not be contrary to
law, morals, public policy or good customs.
Marchan vs. Mendoza
The riding public is not expected to inquire from time to
time before they board the passenger bus whether or not
the driver who is at the steering wheel of said bus was
authorized to drive said vehicle or that said driver is acting
within the scope of his authority and observing the
existing rules and regulations required of him by the
management. To hold otherwise would in effect render
the provision of law (Article 1759) ineffective.
16 | A L Y S S A C A B A L A N G
MARITIME LAW
Maritime Law is the system of laws which particularly Illustrative Cases and Doctrines
relates to the affairs and business of:
a. the sea Yangco vs. Laserna
b. to ships It was held that the liability of a shipowner is limited to the
c. their crews value of the vessel or to the insurance thereon. Despite
d. navigation the total loss of the vessel therefore, its insurance
e. marine conveyances answers for the damages that a shipowner or agent may
be held liable for by reason of the death of its passengers.
Under Article 587 of the Code of Commerce, a shipowner
Vessel is any kind, class or type of craft or artificial
or agent has the right of abandonment; and by necessary
contrivance:
implication, his liability is confined to that which he is
a. capable of floating in water entitled as of right to abandon the vessel with all her
b. capable of being used as a means of water equipments and the freight it may have earned during the
transport for carriage of passenger or cargo voyage
or both The limited liability doctrine applies not only to the goods
c. capable of utilizing its own motive power or but also in all cases like death or injury to passengers
that of another wherein the shipowner or agent may properly be held
liable for the negligent or illicit acts of the captain.
CHARACTERISTICS OF MARITIME TRANSACTION
Dela Torre vs. CA
1. Real No vessel, no liability expresses in a nutshell the limited
Similar to transaction over real property with liability rule. The shipowners or agents liability is merely
coextensive with his interest in the vessel such that a total
respect to effectivity against third persons which
loss thereof results in its extinction. The total destruction
is done through registration of the vessel extinguishes maritime liens because there is
no longer any res to which it can attach.
2. Hypothecary
The liability of the carrier in connection is confined Chua Yek Hong vs. IAC
to the vessel, which stands as the guaranty for The term ship agent as used in Art.587 is broad enough
their settlement to include the ship owner. Pursuant to said provision, both
he ship owner and ship agent are civilly and directly liable
LIMITED LIABILITY RULE: The exclusively real and for the indemnities in favor of third persons which may
hypothecary nature of maritime law operates to limit the arise from the conduct of the captain in the care of goods
liability of the ship-owner to the value of transported, as well as for the safety of passengers
a. the vessel transported. However, this direct liability is moderated and
limited by the ship agent's or ship owner's right of
b. earned freightage
abandonment of the vessel and earned freight. This
c. proceeds of insurance, if any
expressed the universal principle of limited liability.
The most fundamental effect of abandonment is the
When applicable? cessation of the responsibility of the ship agent/owner.
Code of Commerce sanctions the application of The ship owner's or agent's liability is merely co-extensive
the doctrine in the following cases: with the interest in the vessel such that a total loss thereof
results in its extinction.
1. Civil liability for indemnities in favor of third
persons which arise from the conduct of the Philippine Refining Corporation vs. Jarque
captain in the case of the goods Vessels are considered personal property under the civil
2. Civil liability arising from collisions law. Since the term "personal property" includes vessels,
3. Unpaid wages of the captain and the crew if the they are subject to mortgage agreeably to the provisions
vessel and its cargo are totally lost by reason of of the Chattel Mortgage Law. The only difference between
a chattel mortgage of a vessel and a chattel mortgage of
capture and shipwreck
other personalty is that it is not now necessary for a
chattel mortgage of a vessel to be noted in the registry of
What are the exceptions? the register of deeds, but it is essential that a record of
1. Injury to or death of a passenger is due either to documents affecting the title to a vessel be entered in the
the fault of the shipowner or to the concurring record of the Collector of Customs at the port of entry.
negligence of shipowner and the captain The Chattel Mortgage Law in describing what shall be
2. Vessel is insured deemed sufficient to constitute a good chattel mortgage,
3. Workmens compensation claim includes the requirement of an affidavit of good faith
4. When presumption of negligence was not appended to the mortgage and recorded therewith. The
overcome absence of the affidavit vitiates a mortgage as against
creditors and subsequent encumbrancers.
Abandonment shipowner or agent may exempt
Philippine American General Insurance vs. CA
themselves from liability by abandoning the vessel with all
Ships liability can be limited through abandonment of the
her equipment and the freight it may have earned.
vessel, its equipment and freightage as provided in Art.
If insured, abandonment covers the insurance 587. Nonetheless, there are exceptional circumstances
proceeds while the vessel itself shall be wherein the ship agent could still be held answerable
abandoned in favor of the insurer despite the abandonment, as where the loss or injury was
due to the fault of the shipowner and the captain. The
international rule is to the effect that the right of
abandonment of vessels, as a legal limitation of a
shipowners liability, does not apply to cases where the
18 | A L Y S S A C A B A L A N G
injury or average was occasioned by the shipowners own compulsory pilot because of incompetency or physical
fault. Where the shipowner is likewise to be blamed, Art. incapacity.
587 will not apply, and such situation will be covered by
the provisions of the Civil Code on common carrier. CHARTER PARTY is a contract by which with the entire
ship or some principal part thereof is let by the owner to
Sweet Lines vs. CA another person for a specified period of time.
A captain who, having agreed to make a voyage, fails to
fulfill his undertaking, without being prevented by Two Types of Charter Parties
fortuitous event or force majeure, shall indemnify all the
losses which his failure may cause, without prejudice to 1. Contract of Affreightment which involves the
criminal penalties which may be proper. use of shipping space leased by the owner in
In case of interruption of a voyage already begun, the part or as a whole, to carry goods for others:
passengers shall only be obliged to pay the fare in a. Time Charter lease for a fixed
proportion to the distance covered, without right to period of time
recover damages if the interruption is due to fortuitous b. Voyage for a single voyage
event or force majeure, but with a right to indemnity, if the
interruption should have been caused by the captain 2. Charter by Demise or Bareboat by which the
exclusively. If the interruption should be caused by the whole vessel is let to the charterer which
disability of the vessel, and the passenger should agree transfers to him its entire command and
to wait for her repairs, he may not be required to pay any possession and consequent control over its
increased fare of passage, but his living expenses during navigation, including the master and crew
the delay shall be for his own account. who are his servants.
Firemans Fund Insurance vs. Metroport Services BAREBOAT AFFREIGHTMENT
The legal relationship between the consignee and the As to Liability
arrastre operator is akin to that of a depositor and Charterer becomes liable Owner remains liable as
warehouseman. The relationship between the consignee
to others caused by its carrier and must answer
and the common carrier is similar to that of the consignee
negligence for any breach
and the arrastre operator. Since it is the duty of the
As to Owner
arrastre to take good care of the goods that are in its
Charterer becomes owner Charterer not regarded as
custody and to deliver them in good condition to the
pro hac vice owner
consignee, such responsibility also devolves upon the
As to Possession & Command of Vessel
carrier. Both the arrastre and the carrier are therefore
charged with and obligated to deliver the goods in good Owner of vessel The vessel owner retains
condition to the consignee. relinquishes possession, possession, command,
command, and navigation and navigation of the ship
International Container Terminal vs. Prudential to charterer
Normally, a request for a bad order survey is made in case As to Conversion
there is an apparent or presumed loss or damage. The Common carrier is Common carrier is not
consignee made no such request despite being provided converted to private converted to a private
by the petitioner a form therefor. The lack of a bad order carrier carrier
survey does not toll the prescriptive period for filing a
claim for loss, because the consignee can always file a REQUISITES OF A VALID CHARTER PARTY: (CEFC)
provisional claim within 15 days from the time it discovers a. Consent of the contracting parties
the loss or damage. Such a claim would place the arrastre b. Existing vessel which should be placed at the
operator on notice that the shipment sustained damage disposition of the shipper
or loss, even if the exact amount thereof could not be c. Freight
specified at the moment. d. Compliance with Art. 652 of Code of Commerce
In this manner, the arrastre operator can immediately
verify its culpability and liability. This is to give arrastre Jason Clause a stipulation in a charter party that in
contractor a reasonable opportunity to check the validity case of a maritime accident for which the shipowner is
of the claim, while the facts are still fresh in the minds of not responsible by law, contract, or otherwise, the
the persons who took part in the transaction, and while cargo shippers, consignees or owners shall
the pertinent documents are still available. The period of contribute with the shipowner in general average
15 days is sufficient for the consignee to file a provisional
claim after the discharge of the goods from the vessel. Paramount Clause a clause in charter party
providing that the COGSA shall apply even through the
Far Eastern Shipping vs. CA transportation is domestic
A pilot, in maritime law, is a person duly qualified, and
licensed, to conduct a vessel into or out of ports, or in Illustrative Cases and Doctrines
certain waters, to guide vessels into or out of ports, and
entrusted with the navigation of vessels on the high seas. Litonjua Shipping vs. National Seamen Board
The pilot supersedes the master for the time being in the What the time charterer acquires is the right to utilize the
command and navigation of the ship, and his orders must carrying capacity and facilities of the vessel and to
be obeyed in all matters connected with her navigation. designate her destinations during the term of the charter.
He becomes the master pro hac vice and should give all A voyage charter, or trip charter, is simply a contract of
directions as to speed, course, stopping and reversing affreightment, that is, a contract for the carriage of goods,
anchoring, towing and the like. The master is still in from one or more ports of loading to one or more ports of
command of the vessel notwithstanding the presence of unloading, on one or on a series of voyages. In a voyage
a pilot. There are occasions when the master may and charter, master and crew remain in the employ of the
should interfere and even displace the pilot, as when the owner of the vessel.
pilot is obviously incompetent or intoxicated and the It is well settled that in a demise or bare boat charter, the
circumstances may require the master to displace a charterer is treated as owner pro hac vice (for this
occasion) of the vessel, the charterer assuming in large
19 | A L Y S S A C A B A L A N G
measure the customary rights and liabilities of the Types of Bill of Lading:
shipowner in relation to third persons who have dealt with
him or with the vessel. In such case, the Master of the 1. On Board Bill of Lading it states that the goods
vessel is the agent of the charterer and not of the have been received on board the specified vessel
shipowner. The charterer or owner pro hac vice, and not that will carry them
the general owner of the vessel, is held liable for the
expenses of the voyage including the wages of the 2. Received Shipment Bill of Lading it states that
seamen. the goods have been received for shipment with
or without specifying the vessel on which they are
Planters Products vs. CA to be shipped
When PPI chartered the vessel M/V "Sun Plum", the ship
captain, its officers and compliment were under the RIGHTS AND OBLIGATION OF PARTIES
employ of the shipowner and therefore continued to be
under its direct supervision and control. Hardly then can Shipowner or Agent Charterer
we charge the charterer, a stranger to the crew and to the (NO-US-LPB) (AFL-WES)
ship, with the duty of caring for his cargo when the
charterer did not have any control of the means in doing 1. Not to accept cargo 1. Pay agreed charter
so. from others if the price
vessel is wholly 2. Pay freightage on
Caltex vs. Suspicio Lines chartered unboarded cargo
The charterer of a vessel has no obligation before 2. Observe represented 3. Pay loses to others for
transporting its cargo to ensure that the vessel it chartered capacity loading uncontracted
complied with all legal requirements. The duty rests upon 3. Unload cargo and illicit cargo
the common carrier simply for being engaged in public clandestinely placed 4. Wait if the vessel
service. The Civil Code demands diligence which is 4. Substitute another needs repairs
required by the nature of the obligation and that which vessel if load is less 5. Pay expenses for
corresponds with the circumstances of the persons, the than 3/5 of capacity deviation
time and the place. 5. Leave port if charterer 6. Sub-charter
Towage is not a charter party. It is a contract for the hire does not bring the
of services by which a vessel engaged to tow another cargo within lay days
vessel from one port to another for consideration. 6. Place vessel in a
Whereas a charter party is a contract whereby the whole condition to navigate
of part of the ship is let. 7. Bring cargo to nearest
neutral port in case of
The sum of money due by war or blockade
express contract for the
detention of the vessel in
DEMURRAGE loading or unloading, BOTTOMRY RESPONSENTIA
beyond the time allowed Definition
for that purpose in the
charter party a. Loan secured by the a. Loan secured by the
The amount paid by or shipowner of ship owner of the cargo
recoverable from a agent b. Guaranteed by the
charterer of a ship for the b. Guaranteed by the cargo
DEADFREIGHT portion of the ships vessel c. Payable upon safe
capacity the latter c. Payable only upon arrival of the cargo
contracted but failed to arrival of vessel at at destination
occupy destination
Bonus to be paid to the
PRIMAGE captain after the Common Elements
successful voyage
1. Exposure of security to marine peril
Fortuitous Cases: (WIPE-B) 2. Obligation of the debtor conditioned upon safe
a. War or interdiction of commerce arrival
b. Inability of the vessel to navigate
c. Prohibition to receive cargo Forms
d. Embargo May be executed by means of:
e. Blockade 1. Public instrument
2. Policy signed by the contracting parties and the
Delivery of Goods without Surrender of Bill of Lading broker taking part therein
The obligation of the carrier is also terminated if 3. Private instrument
the goods are delivered even if the bill of lading was not
surrendered. The surrender of the BoL is not necessary Hypothecary Nature of Bottomry/Respondentia
for the discharge of the obligation of the carrier The obligation of the borrower to pay the loan is
extinguished if the goods are absolutely lost by reason of
Evidence of existence of an accident in sea during voyage unless loss is due to:
contract of carriage of a. Inherent defect
cargo b. Barratry on part of the captain
FUNCTIONS OF A BILL
Commercial document, if c. Fault or malice of the borrower
OF LADING (ECR)
negotiable may be d. Vessel engaged in contraband
transferred e. Cargo loaded is different from what agreed
Receipt of cargo
20 | A L Y S S A C A B A L A N G
GENERAL AVERAGE DOCTRINE OF ERROR IN EXTREMIS
There are 3 zones in collision
Includes all damages and expenses a. FIRST ZONE time up to the moment when risk
which are deliberately cause in order of collision begins
Definition to save the vessel, its cargo, or both at b. SECON ZONE time between moment when risj
the same time from real and known of collision begins up to the moment it becomes
risks practical certainty
c. THIRD ZONE time when collision is certain up
to the time of impact
a. Common danger to ship and the
cargo after loading If a vessel having a right of way suddenly changes its
b. For common safety, vessel or the course during the third zone, in an effort to avoid an
cargo or both is sacrificed imminent collision due to the fault of another, such act is
deliberately said to be done in extremis.
Requisites
c. Successful saving of the vessel and
cargo Illustrative Cases and Doctrines
d. Expenses should have been
incurred after taking legal steps and Williams vs. Yangco
authority The fault of the first vessel in failing to exhibit proper lights
or to take the proper side of the channel will relieve from
liability one who negligently runs into such vessels before
1. Resolution of the captain he sees it; although it will not be a defense to one who,
2. Resolution must be entered in the having timely warning of the danger of collision, fails to
logbook use proper care to avoid it.
a. Stating reasons and motives for
Formalities Smith and Bell Company vs. CA
dissent
b. Signatures of all present Rule 18 (a) of the International Rules of the Road: When
c. Detail of jettisoned goods and two power-driven vessels are meeting end on, or nearly
injuries caused to those on board end on, so as to involve risk of collision, each shall alter
her course to starboard, so that each may pass on the
port side of the other. Rule I (B) Under Rule 29 of the
PARTICULAR AVERAGE same set of Rules: A "proper lookout" is one who has
been trained as such and who is given no other duty save
Are all the expenses and damages to act as a look-out and who is stationed where he can
caused to the vessel or to her cargo see and hear best and maintain good communication with
Definition which have not inured to the benefit the officer in charge of the vessel, and who must, of
and common profit of all persons course, be vigilant.
interested in the vessel and cargo The fact that Second Mate German was allowed to be in
command of "Don Carlos" and not the chief or the sailing
mate in the absence of Captain Rivera, gives rise to no
other conclusion except that said vessel [had] no chief
COLLISIONS it refers to the contact of two moving mate.
vessels. If one vessel is moving while the other is
stationary, the same is more appropriately called allusion National Development Corporation vs. CA
The law of the country to which the goods are to be
DOCTRINE OF INSCRUTABLE FAULT transported governs the liability of the common carrier in
In a collision, the vessel at fault shall indemnify case of their loss, destruction or deterioration. Since the
the damages sustained or losses incurred and if both goods in question are transported from San Francisco,
vessels were at fault, each shall suffer its own damages, California and Tokyo, Japan to the Philippines and that
both shall be solidarily liable to others. they were lost or due to a collision which was found to
This solidarity has been held to preclude a have been caused by the negligence or fault of both
common carrier from interposing a defense of due captains of the colliding vessels the laws of the
diligence in selection and supervision. Philippines will apply.
21 | A L Y S S A C A B A L A N G
Aboitiz Shipping vs. General Accident and Life Persons who have no Right to a Reward for Salvage:
The only time the Limited Liability Rule does not apply is 1. Crew of the vessel saved
when there is an actual finding of negligence on the part 2. Person who commenced salvage in spite of
of the vessel owner or agent. Among the inherent duties opposition of the Captain or his representative
of a captain is to examine a vessel before sailing and to 3. A person who fails to deliver a salvaged vessel or
comply with the laws of navigation. The rights of a vessel cargo to the Collector of Customs
owner or agent under the Limited Liability Rule are akin to
those of the rights of shareholders to limited liability under SALVAGE TOWAGE
our corporation law. Both are privileges granted by As to Governing Law
statute, and while not absolute, must be swept aside only Governed by special law Governed by NCC on
in the established existence of the most compelling of (Act 2616) contract of lease
reasons. As to Requisite of Success
Requires success Success is not required
Philippine American General vs. CA otherwise no payment
The international rule is to the effect that the right of As to Consent
abandonment of vessels, as a legal limitation of a ship Must be done with Only the consent of the
owner's liability, does not apply to cases where the injury consent of the captain or tugboat owner is needed
or average was occasioned by the ship owner's own fault. crewmen
It must be stressed at this point that Art. 587 speaks only As to Involvement of vessel in the Accident
of situations where the fault or negligence is committed Vessel must be involved Need not to be involved in
solely by the captain. Where the ship owner is likewise to in an accident an accident
be blamed, Art. 587 will not apply, and such situation will As to Fees
be covered by the provisions of the Civil Code on common Fees distributed among Fees belong to the
carrier. crewmen tugboat owner
ARRIVAL UNDER STRESS it is the arrival of the vessel
Illustrative Cases and Doctrines
at the nearest and most convenient port, if during the
voyage the vessel cannot continue the trip to the port of Erlanger & Galinger vs. Swedish East Asiatic
destination due to: (LAW)
The question whether or not a particular ship and her
a. Lack of provisions
cargo is an object of salvage depends upon her condition
b. Well-founded fear of seizure, privateers or pirates
at the time the salvage services are performed. In the
c. By reason of any accident of the sea disabling it
present case the plaintiff-appellant claims that the Nippon
to navigate
was a derelict or quasi-derelict and that their claim should
be adjudged upon this basis. Whether property is to be
It is unlawful when: (MINE)
adjudged derelict is determined by ascertaining what was
a. Lack of provisions due to negligence to carry
the intention and expectation of those in charge of it when
according to usage and customs
they quitted it. If those in charge left within the intention of
b. Risk of enemy not well known or manifest
returning, or of procuring assistance, the property is not
c. Defect of vessel due to improper repair
derelict, but if they quitted the property with the intention
d. Malice, negligence, lack of foresight or skill of
of finally leaving it, it is derelict, and a change of their
captain
intention and an attempt to return will not change of their
intention and an attempt to return will not change its
SALVAGE LAW
nature.
There is salvage where a person (or persons) Barrios vs. Go Thong
picks up and conveys to a safe place a vessel or its cargo
A ship in a desperate condition with passengers and
which are beyond the control of the crew or shall have
persons on board but who are unable to do anything for
been abandoned by them. However, there can also be a
their own safety may be considered a quasi-derelict.
contract of salvage that may be voluntarily agreed upon
When the engine failure occurred the seas were calm and
by the parties.
the weather was clear. In fact the ship did not drift too far
from the location where its engines failed. Further, the
Requisites to a Valid Salvage claim: (MVSS)
captain and crew of the MV Don Alfredo did not find it
1. There must be a marine peril
necessary to jettison the vessels cargo as a safety
2. Vessel is shipwrecked beyond the control of the
measure. Therefore the MV Don Alfredo cannot even be
crew or shall have been abandoned
considered as a quasi-derelict. Although the service of the
3. Services voluntarily rendered
defendant did not constitute as salvage, it can be
4. Service must have been successful in whole or in
considered as a quasi-contract of towage. However in a
part
contract of towage, only the owner of the towing vessel is
entitled to remuneration.
Subjects of Salvage
1. Ship itself
CARRIAGE OF GOODS BY SEA ACT (COGSA)
2. Jetsam goods that were thrown off a ship which
was in danger Applicability:
3. Floatsam goods which float upon the sea when
The transportation must be:
cast overboard
a. Water/maritime transport
4. Ligan or Lagan goods cast into the sea tied to
b. For the carriage of goods
a buoy so that they may be found again by
c. Overseas, international, foreign
owners
Parties:
DERELICT: a ship or her cargo which is abandoned and
a. Carrier includes the charterer
deserted at sea by those who are in charge of it, without
b. Shipper
any hope of recovering it, or without any intention of
returning to it.
22 | A L Y S S A C A B A L A N G
Duties of Carrier under COGSA primarily by the Civil Code and suppletorily by the Code
1. Make ship seaworthy of Commerce and special laws such as the Carriage of
2. Properly manned, equip, and supply the ship Goods by Sea Act. The stipulation in the questioned bill
3. Properly and carefully load, handle, stow, carry, of lading limiting Sea-Lands liability for loss or damage to
keep, care and discharge the goods the shipment covered by said bill to $500 per package is
4. Make the holds, refrigerating, and cooling held valid and binding on private respondent.
chambers
5. Issue to the shipper a bill of lading Maritime Agencies vs. CA
The one-year period in the present cases should
One-year prescriptive period: commence on 20 October 1979, when the last item was
The prescriptive period of one year starts after the delivered to the consignee. Unions complaint was filed
delivery of the goods or the date the goods should have against Hong Kong on 19September 1980, but tardily
been delivered. The period does not apply to conversions against Macondray on 20 April 1981. The consequence is
or misdeliveries. A stipulation reducing the one year that the action is considered prescribed as far as
period is null and void, but a written agreement to Macondray is concerned but not against its principal,
suspend it is valid. which is what matters anyway.
The rule applies in cases of collision, but it starts Mayer Steel Corp. vs. CA
not from the date of the collision but when the Carriage of Goods by Sea Act governs the relationship
goods should have been delivered between the carrier on the one hand and the shipper, the
Period is not suspended by an extrajudicial consignee and/or the insurer on the other hand. It defines
demand. Suspended only by: 1) express the obligations of the carrier under the contract of
agreement of the parties; 2) filing of an action in carriage. It does not, however, affect the relationship
court until it is dismissed between the shipper and the insurer. This case is
governed by the Insurance Code. The insurer exercising
Illustrative Cases and Doctrines its right of subrogation is bound by the one-year
prescriptive period. However, it does not apply to claim
Elser vs. CA against the insurer for the insurance proceeds because
Clause 18 must of necessity yields to the provisions of the the claim against the insurer is based on contract, it
COGSA in view of the proviso contained in the same Act expires in 10 days.
which says: any clause, covenant, or agreement in a
contract of carriage relieving the carrier or the ship from AVIATION LAW
liability for loss or damage to or in connection with the
goods . . . or lessening such liability otherwise than as The governing law is now Republic Act No. 9497 of the
provided in this Act, shall be null and void. This means Civil Aviation Authority Act of 2008 which was passed on
that a carrier cannot limit its liability in a manner contrary March 4, 2008.
to what is provided for in said act. And so Clause 18 of
the bill of lading must of necessity be null and void. WARSAW CONVENTION applies to international
transportation by air. There is international transportation
Ang vs. Compania Maritima when:
The action of Ang is based on misdelivery of the cargo a. The place of departure and the place of
which should be distinguished from loss thereof. The one- destination are within the territories of two
year period provided for in Section 3 (6) of the Carriage of contracting countries regardless of whether or not
Goods by Sea Act refers to loss of the cargo. What is there was a break in transportation or
applicable is the four-year period of prescription for quasi- b. The place of departure and the place of
delicts prescribed in Article 1146 (2) of the Civil Code or destination are within the territory of a single
ten years for violation of a written contract as provided for contracting country if there is an agreed stopping
in Article 1144 (1) of the same Code. Four-year period of place within a territory subject to the sovereignty,
prescription for quasi-delicts or ten-year period for mandate or authority of another power even
violation of written contract, applicable to case at bar. though the power is not a party to the Convention
DOLE Philippines vs. Maritime Company Damage or Injury for which Carrier is Liable:
The demand in this instance would be the claim for
damages filed by Dole with Maritime on May 4, 1972. The A. Passenger if injury took place: 1) on board the
effect of that demand would have been to renew the one aircraft; 2) in the course of any of the operations
year prescriptive period from the date of its making. of embarking; 3) in the course of disembarking; 4)
Stated otherwise, under Dole's theory, when its claim was when there was or because of delay
received by Maritime, the one-year prescriptive period
was interrupted (or tolled) and began to run anew from B. Checked baggage or goods damage occurred
May 4, 1972, affording Dole another period of one year during air transportation or when there is delay
counted from that date within which to institute action on
its claim for damage. Unfortunately, Dole let the new
period lapse without filing action. Limit of Liability:
1. Passengers $10,000 to $100,000
Sea-Land Services vs. IAC o except: agreement to a higher limit
There can be no doubt about the validity and 2. Checked-in baggage $20 / kg
enforceability of freely-agreed-upon stipulations in an bill o except: consigner declared its value and paid
of lading limiting the liability of the carrier to an agreed a supplementary sum, carrier liable to not
valuation unless the shipper declares a higher value and more than the declared sum unless it proves
inserts it into said contract or bill. the sum is greater than its actual value
Since the liability of a common carrier for loss of damage 3. Hand-carry baggage $400 to $1000/passenger
to goods transported by it under a contract of carriage is
governed by the laws of the country in destination, the
liability of Sea-Land to the consignee is governed
23 | A L Y S S A C A B A L A N G
Note: The Hague Protocol amended the Warsaw PUBLIC SERVICE ACT (CA 146)
Convention by removing the provision that if the airline
took all necessary steps to avoid the damage, it could Public Service: Includes any person who may own,
exculpate itself completely operate, manage, or control in the Philippines for hire or
compensation, with general or limited clientele, whether
SPECIAL RULES ON LIABILITIES OF AIRLINE permanent, occasional or accidental, and done for
CARRIERS general business purposes, any common carrier, railroad,
street railway, traction railway, subway motor vehicle,
1. In case of flight diversion due to bad weather or steamboat, or steamship line, ferries, and water craft,
other circumstances beyond the pilots control, shipyard, ice-plant, electric light, heat and power or any
the relation between carrier and passenger continues public utility
until the latter has been landed at the port of
destination and has left the carriers premises. The Government Agencies that replaces the Public
carrier should exercise extraordinary diligence in Service Commission
safeguarding the safety of its stranded passengers
until they have reached their final destination Land Transportation Franchising
LTFRB
Regulatory Board
2. Even where overbooking of passengers is allowed MARINA Maritime Industry Authority
as a commercial practice, the airline company would National Telecommunications
NTC
still be guilty of bad faith and still be liable for Commission
damages if it did not properly inform passenger that it ERC Energy Regulatory Commission
could breach the contract of carriage even if they NWRC National Water Resources Council
were confirmed passengers CAA Civil Aviation Authority
Department of Transportation and
DoTC
Communication
3. An open-dated ticket constitutes a complete TRB Toll Regulatory Board
contract between the carrier and passenger. Hence, LTO Land Transportation Office
the airline company is liable if it refused to confirm a
passengers flight reservation
CERTIFICATE OF PUBLIC CONVENIENCE
4. An airline company which issued a confirmed No public service shall operate without having been
ticket to a passenger covering successive trips on issued a certificate of public convenience or a
different airlines can be held liable for damages certificate of public convenience and necessity
occasioned by bumping off by one of the successive
airlines The certificate constitutes neither a franchise nor a
contract, confers no property right, and is a mere
license or privilege. The holder of said certificate does
5. An airline ticket providing that carriage by not acquire a property right in the route covered
successive air carriers is to be regarded as a thereby. Nor does it confer any property right, interest
single operation is to make the issuing carrier or interest in the public highways. Revocation of this
liable for the tortuous conduct of the other carrier. A certificate deprives him of no vested right. New and
printed provision in the ticket limiting liability only to its additional burdens, alteration of the certificate, or
own conduct is not enough to rebut that liability even revocation or annulment thereof is reserved to
the State
JURISDICTION OR VENUE:
a. Court where the carrier is domiciled CERTIFICATE OF
CERTIFICATE OF
b. Court where the carrier has its principal place of PUBLIC CONVENIENCE
PUBLIC CONVENIENCE
business AND NECESSITY
c. Court where the carrier has an establishment by Any authorization to
which the contract has been made operate public service
d. Court of the place of destination issued by the Public Requires franchise
Service Commission for issued by the legislative
NOTICE OF CLAIM AND PRESCRIPTIVE PERIOD: which no franchise either department
a. Notice of Claim or Complaint this is municipal or legislative is
mandatory or a condition precedent. The required
complaint or notice must be files with the
international carrier Grounds for revocation of certificate:
i. Baggage within 3 days from receipt a. Where holder is a mere dummy
ii. Baggage in case of delay of delivery b. Where operator ceased operation and placed
within 14 days from the time the baggage his buses on storage
was placed at the disposal of the c. Where operator totally abandons the service
passenger
iii. Goods 7 days from delivery
b. Prescription of Action The case must be filed Requirements for granting certificate:
in court within a. Citizen of the Philippines, or a corporation, etc.
i. 2 years from receipt in case of an action constituted and organized under the laws of the
for damage to passengers baggage Philippines at least 60% of its stock or paid-up
capital must belong entirely to citizens of the
ii. If the action is for tort including
Philippines
humiliation at the hands of the airline
employees, filed within 4 years b. Financially capable of undertaking the proposed
service
c. Proof of public necessity, interest and
convenience
24 | A L Y S S A C A B A L A N G
Illustrative Cases and Doctrines authority to operate its facilities for public service, cannot
be taken or interfered with without due process of law.
Luzon Stevedoring vs. Public Service Commision
C.A. No. 146 clearly declares that an enterprise of any of KMU Labor Center vs. Garcia
the kind therein enumerated is a public service if LTFRB is authorized under EO 202, s. 1987 to determin
conducted for hire or compensation even if the operator e, prescribe, approve andperiodically review and adjust,
deals only with a portion of the public or limited clientele. reasonable fares, rates and other related charges, relative
The term 'public service' includes every person that now to the operation of public land transportation services
or hereafter may own, operate, manage, or control in the provided by motorized vehicles. However, LTFRB is not
Philippines, for hire or compensation, with general or authorized to delegate that power to a common carrier, a
limited clientele, whether permanent, occasional or transport operator, or other public service. Authority given
accidental, and done for general business purposes any by the LTFRB to the provincial bus operators to set a fare
common carrier. range over and above the authorized existing fare, is
It is not necessary, in order to be a public service, that an illegal and invalid as it is tantamount to an undue
organization be dedicated to public use, i.e., ready and delegation of legislative authority. Rate should not be
willing to serve the public as a class. It is only necessary confiscatory as would place an operator in a situation
that it must in some way be impressed with a public where he will continue to operate at a loss; rate should
interest; and whether the operation of a business is a enable public utilities to generate revenues sufficient to
public utility depends upon whether or not the service cover operational costs and provide reasonable return on
rendered by it is of a public character and of public the investments.
consequence and concern.
Tatad vs. Garcia
San Pablo vs. Pantranco What EDSA LRT Corporation, Ltd. owns are the rail
A ferry service is distinguished from a motorship or tracks, rolling stocks like the coaches, rail stations,
motorboat service engaged in the coastwise trade in that terminals and the power plant, not a public utility. While a
the latter is intended for the transportation of passengers franchise is needed to operate these facilities to serve the
and/or freight for hire or compensation between ports or public, they do not by themselves constitute a public
places in the Philippines without definite routes or lines of utility. What constitutes a public utility is not their
service. Under no circumstance can the sea between ownership but their use to serve the public. In law, there
Matnog and Allen be considered a continuation of the is a clear distinction between the "operation" of a public
highway. While a ferry boat service has been considered utility and the ownership of the facilities and equipment
as a continuation of the highway when crossing rivers or used to serve the public. The right to operate a public
even lakes, which are small body of waters separating the utility may exist independently and separately from the
land, however, when as in this case the two terminals, ownership of the facilities thereof
Matnog and Allen are separated by an open sea it cannot
be considered as a continuation of the highway. Philippine Airlines vs. Civil Aeronautics Board
Respondent Pantranco should secure a separate CPC for Under RA 776, CAB has the authority to issue Certificate
the operation of an inter-island or coastwise shipping of Public Convenience and Necessity. A legislative
service in accordance with the provisions of law. Its CPC franchise is not a precedent requirement because the
as a bus transportation cannot be merely amended to Congress has delegated the authority to authorize the
include this water service under the guise that it is a mere operation of domestic air transport services to the CAB,
private ferry service. an administrative agency.
GENERAL RULE:
A passenger cannot be denied the
right to board the aircraft without
his consent.
EXCEPTIONS:
IN CASE OF OVERBOOKING:
To amenities*
MODE:
By tendering a check, or
Cash, or