TRANSPORTATION AND PUBLIC UTILITIES LAW
CHAPTER 1 Consignee – person to whom goods are to be
GENERAL CONSIDERATIONS
Contract of Transportation
- a contract whereby a person obligates himself to
transport persons or properties from one place
to another for a consideration
What is a Common Carrier?
Common Carriers are persons, corporations,
firms, or associations engaged in the business
of carrying or transporting passengers or goods,
or both, by land, water, or air for compensation,
offering their services to the public. (Art. 1732
NCC)
Must be done as a Public Employment and NOT
merely as a casual occupation
TRUE TEST of a COMMON CARRIER: the
carriage of passenger or goods, provided it has
space, holds itself out to the public for all who
opt to avail of its transportation service for a fee
Classifications/Kinds of Common Carriers:
A. carriage of passengers
B. carriage of goods
As to the Person Who Obligates himself:
a) common carrier
b) private carrier
PARTIES to the Contract:
I. CARRIAGE OF PASSENGERS
a) Common Carrier
b) Passengers
Passenger – one who travels in a pubic
conveyance by virtue of a contract, express or
implied, with the carrier as to the payment of
fare or its equivalent
A passenger is still a passenger EVEN IF he is
carried gratuitously or under a reduced fare.
Art 1758: When a passenger is carried
gratuitously, a stipulation limiting the common
carrier’s liability for negligence is VALID, but
NOT for wilful acts or gross negligence. The
reduction of fare does not justify any limitation of
the common carrier’s liability.
To be able to maintain/initiate a cause of action,
you must be the real party-in-interest.
II. CARRIAGE OF GOODS
a) Shipper
b) Carrier
Shipper – person who delivers the goods to the
carrier for transportation and pays the
consideration thereof
CABRERA. DELOS SANTOS. BACAY. ESCASINAS. TEMANIL. MELGAR. UY. FRANCISCO.
delivered
A consignee is deemed to be bound where it
was established that he accepted the same and
is trying to enforce the agreement.
PERFECTION
Two types of Contract of Carriage of PERSONS
a) Contract to Carry
b) Contract of Carriage Itself
CONTRACT TO CARRY
It is CONSENSUAL – perfected by mere
consent; “an agreement to carry passenger at a
future time”
CONTRACT OF CARRIAGE ITSELF
It is REAL – perfected at the time the facilities of
the carrier is used
CASE: British Airways v CA
Even if no tickets were issued, a verbal contract
to carry is already a binding consensual contract
TAKE NOTE: Surreptitious entry of a passenger makes
him not a passenger. (there is no contract to speak of
since there was no consent)
As to AIRCRAFTS:
CONTRACT TO CARRY: deemed as a
perfected contract even if no tickets have been
issued as long as there was already a meeting
of minds regarding the subject matter and
consideration
CONTRACT OF CARRIAGE: deemed perfected
if the passenger has checked in, passed through
customs, boarded the shuttle, and has loaded in
the aircraft. (use of facilities of the Common
Carrier)
As to BUSSES/JEEPNEYS/STREETCARS
Once it stops, it is considered to be making a
continuous offer
A passenger accepts such offer if he is already
boarding the conveyances; hence, the contract
of carriage is deemed perfected
Any damage or injury caused to the passenger
while boarding and/or alighting from the vehicle
is imputable to the common carrier.
As to TRAINS
To be considered a passenger:
1. Must have a bona fide intention to use
the facilities;
2. Must possess sufficient fare; and
3. Must present himself in the place and
manner provided
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 TRANSPORTATION AND PUBLIC UTILITIES LAW
CASE: LRTA v Natividad
He was considered a passenger because he
entered the LRT station after buying a token and
fell while waiting for the oncoming train; there
was intent of riding the train
CASE: First Phil. Industrial Corp. v CA
TEST for CC:
1. Engaged as a public employment; not
as a casual occupation
2. Undertakes to carry goods of the kind to
which his business if confined
3. Undertakes to carry by the method by
which his business is conducted
4. Must be for hire
CHARACTERISTICS of CC:
1. No distinction between principal business
activity and ancillary activity
2. No distinction between service on scheduled
basis or unscheduled basis
3. Does not distinguish general public from narrow
segment of general population
4. Has obligations of common carrier even if it fails
to secure a Certificate of Public Convenience
5. No distinction as to the means of transporting
6. Does not require to be in a motor vehicle
7. Still a common carrier even if no fixed and
known public route, no terminal, nor tickets
8. Need not to engage in business of Public
Transportation for Civil Code to apply
ANCILLARY BUSINESS
CASE: De Guzman v. CA
Still a common carrier though the principal
business is a junk dealer since he was charging
freight rates
LIMITED CLIENTELE
CASE: PhilAm Gen Insurance v. PKS Shipping
Still a common carrier because it was engaged
in business of carrying goods for others for a fee
even if it has a limited clientele
CASE: Asia Lighterage and Shipping v. CA
It has no fixed and publicly known routes;
maintains no terminals, and issues no tickets
Its principal business is lighterage and drayage
and offers if barges to the public for
transportation for compensation
Hence, still considered as a common carrier
MEANS OF TRANSPORTATION
CASE: First Phil Corp. v. CA
Pipeline operators are common carriers subject
to business taxes on common carriers since the
CABRERA. DELOS SANTOS. BACAY. ESCASINAS. TEMANIL. MELGAR. UY. FRANCISCO.
law makes no distinction as to the means of
transportation
EFFECT OF CHARTER PARTY:
Transforms a common carrier into a private
carrier PROVIDED it is a bareboat or demise
charter
It will not transform it if the charter party is a contract of
affreightment like a voyage charter or time charter.
What is a Charter Party?
- A contract by which an entire ship, or some
principal part thereof, is let by the owner to
another for a specified time or use.
- It may be a: 1) contract of affreightment OR
2) a charter by Demise or Bareboat Charter
CONTRACT OF AFFREIGHTMENT
Use of shipping place on vessels leased by the
owner to carry goods for others
It may be: 1) TIME CHARTER – leased for a
fixed period; or 2) VOYAGE CHARTER – leased
for a single voyage
In contract of affreightment, only the vessel is for
hire; the management and command thereof is
not let by the owner to the lessor; hence, its
supervision and control remains with the owner
and his crew.
CHARTER BY DEMISE or BAREBOAT CHARTER
Whole vessel is let to the charterer with transfer
of entire command and possession
The distinction between a common carrier and a private
carrier lies in the character of the business.
If it is not part of the general business but for a single
transaction only then the entity is a private carrier.
Art. 1733 mandates common carriers to exercise
extraordinary diligence. As for private carriers, ordinary
diligence would suffice.
Common carriers are presumed to be at fault. No such
presumption exists in a private carrier.
CASE: Planters Product, Inc. v. CA
A public charter shall remain as such,
notwithstanding the charter of the whole or
portion of a vessel, PROVIDED the charter is
limited to the ship only.
It is only when the charter includes both the
vessel and its crew that a common carrier
becomes private.
A private carrier is undertaken by a special agreement
and the carrier does not hold himself out to the public as
such.
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Diligence required: DOAGFOAF

The stringent provisions of the Civil Code on common
carriers protecting the general public cannot apply on a
private carrier.
COMMON CARRIER v. PRIVATE CARRIER
COMMON CARRIER
a. Extraordinary diligence
b. Cannot stipulate exemption from liability
due to negligence
c. Presumed at fault; has burden to prove
otherwise
PRIVATE CARRIER
a. Diligence of a Good Father of a Family
b. May stipulate exemption from liability
c. Not presumed at fault
TRAMP SERVICE
- Contract carrier; no regular and fixed routes
and schedules
- Accepts cargo whenever and wherever
- Hired on contractual basis
- May be considered common carriers
depending on circumstances
LINE SERVICE
- Common Carrier
- Has regular ports/destination; freight rates,
etc.
- Whatever offered is accepted for shipment

COMMON CARRIER v. TOWAGE GOVERNING LAWS

Towage – service rendered by towing for the
mere purpose of expediting the voyage
In towage, one vessel is hired to bring another
vessel to another place
The party towing must exercise DOAGFOAF
Negligence of the obligor = failure to exercise
due care in fulfilling the obligation
COMMON CARRIER v. ARRASTRE
Arrastre – “hauling of cargo”; pertains to the
handling of the cargo on the wharf
Functions of ArrastreOpertor:
1. Receive, handle, care for goods
imported and exported
2. Record and check all goods
3. Furnish incidental services such as light
and water
The functions of arrastre operator have nothing
to do with the trade and business of navigation
The responsibility of arrastre operator lasts until
the delivery of the cargo to the consignee
It must observe same diligence as a common
carrier and a warehouseman, being the
custodian of goods discharged from a vessel
COMMON CARRIER v. STEVEDORING
Stevedore – “to stuff”; pertains to the handling of
the cargo in the hold of the vessel or between
the ship’s tackle and the holds of the vessel
The responsibility of a stevedore ends upon the
loading and stowing of the cargo in the vessel
Diligence required: DOAGFOAF; higher degree
of diligence imposed on a common carrier or
warehouseman is inapplicable
COMMON CARRIER v. TRAVEL AGENCY
A travel agency is NOT a common carrier.
(Contract of Service; not a Contract of Carriage)
Object in Travel Agencies = booking, ticketing,
and accommodation
PRIMARY: Civil Code
Those not Covered: Code of Commerce and by
Special Laws
Art 1753: w/ respect to loss, destruction, or deterioration,
the laws of the country of destination shall apply
It is immaterial if such loss, destruction, or deterioration
occurred in foreign waters.
Treaties are part of the laws of the land; hence, also
applicable in this jurisdiction.
INTERNATIONAL AIR TRANSPORTATION
Place of departure and destination are within the
territories of 2 contracting countries
Place of departure and destination are with in
the territory of one county BUT with a stopping
place within the territory of a foreign sovereign
power
SUMMARY OF RULES
Coastwise Shipping
a) Civil Code (Art. 1732-1766)
b) Code of Commerce
Carriage from Foreign Ports to Phil Ports
a) Civil Code
b) Code of Commerce
c) Carriage of Goods by Sea Act
Carriage from Phil Ports to Foreign Ports
a) Laws of the country to which the goods
are to be transported (Art. 1753)
Overland Transportation
a) Civil Code
b) Code of Commerce
Air Transportation
a) Civil Code

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 TRANSPORTATION AND PUBLIC UTILITIES LAW
b) Code of Commerce
c) For International Carriage = Warsaw
Convention
CASE:Philippine Charter Insurance Corp. v. Neptune
Orient Lines
Since the subject cargoes were lost while being
transported by respondent common carrier from
Hong Kong to the Philippines, Philippine law
applies pursuant to the Civil Code which
provides:
Art. 1753. The law of the country to which the
goods are to be transported shall govern the
liability of the common carrier for their loss,
destruction or deterioration.
Art. 1766. In all matters not regulated by this
Code, the rights and obligations of common
carriers shall be governed by the Code of
Commerce and by special laws.
The rights and obligations of respondent
common carrier are thus governed by the
provisions of the Civil Code, and the COGSA,
which is a special law, applies suppletorily.
CASE: Alitalia v IAC
The Warsaw Convention provides that an air
carrier is made liable for damages when: (1) the
death, wounding or other bodily injury of a
passenger if the accident causing it took place
on board the aircraft or in the course of its
operations of embarking or disembarking; (2) the
destruction or loss of, or damage to, any
registered luggage or goods, if the occurrence
causing it took place during the carriage by air";
and (3) delay in the transportation by air of
passengers, luggage or goods. However, the
claim for damages may be brought subject
to limitations provided in the said convention.
NATURE OF BUSINESS
Common carriers exercise a sort of public office,
and have duties to perform in which the public is
interested.
- They are public utilities.
- They are impressed with public interest and
concern.
- They are subject to the regulation by the
State.
- CASE: Fisher v. Yangco Steamship Co.
ISSUE: W/N Fisher can lawfully refuse to accept
dynamite, powder or other explosives for carriage.
HELD: NO. The duties and liabilities of common carriers
in this jurisdiction are defined and fully set forth in Act
No. 98 of the Philippine Commission. The nature of the
business of a common carrier as a public employment is
such that it is clearly within the power of the state to
impose such just and reasonable regulations thereon in
the interest of the public as the legislator may deem
proper. Common carriers in this jurisdiction cannot
lawfully decline to accept a particular class of goods for
carriage, to the prejudice of the traffic in those goods,
CABRERA. DELOS SANTOS. BACAY. ESCASINAS. TEMANIL. MELGAR. UY. FRANCISCO.
unless it appears that for some sufficient reason the
discrimination against the traffic in such goods is
reasonable and necessary. The mere fact that violent
and destructive explosions can be obtained by the use of
dynamite under certain conditions would not be sufficient
in itself to justify the refusal of a vessel to accept it for
carriage, if it can be proven that in the condition in which
it is offered for carriage there is no real danger to the
carrier, nor reasonable ground to fear that his vessel or
those on board his vessel will be exposed to
unnecessary and unreasonable risk in transporting it.
The business of common carriers impinges
directly and intimately upon the safety, well
being and property of the members of the
general community who happen to deal with
such carrier.
- Common carriers are required under the
Civil Code to exercise extraordinary
diligence in the performance of their
obligation to carry goods and/or passengers.
- The law imposes duties and liabilities upon
common carriers for the safety and
protection of those who utilize their services.
REGISTERED OWNER RULE AND KABIT SYSTEM
The person who can be sued for breach of
contract is the contracting party.
However, by reason of public law, the law allows
victims of accidents to sue those who are third
parties.
Registration Laws
Registration of motor vehicles is now governed
by RA No. 4136 (The Land Transportation and
Traffic Code).
The law on registration is now being
administered by the Land Transportation Office.
Registered Owner Rule
The person who is the registered owner of a
vehicle is liable for any damage caused by the
negligent operation of the vehicle although the
same was already sold or conveyed to another
person at the time of the accident.
The registered owner is liable to the injured
party subject to his right of recourse against the
transferee or the buyer.
- CASE: Equitable Leasing Corp. v. Suyon, et
al.
ISSUE: W/N Equitable is liable for damages.
HELD: YES. In contemplation of law, the owner/operator
of record is the employer of the driver, the actual
operator and employer being considered as merely its
agent. Since Equitable remained the registered owner of
the tractor, it could not escape primary liability for the
deaths and the injuries arising from the negligence of the
driver.
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The main aim of motor vehicle registration is to
identify the owner so that if any accident
happens, or that any damage or injury is caused
by the vehicle on the public highways,
responsibility therefor can be fixed on a definite
individual, the registered owner.
The registered owner is not liable if the vehicle
was taken without his knowledge and consent.
- CASE: Duavit v. CA
ISSUE: W/N the owner of a private vehicle which figured
in an accident can be held liable under Article 2180 of
the Civil Code when the said vehicle was neither driven
by an employee of the owner nor taken with the consent
of the latter.
HELD: NO. An owner of a vehicle cannot be held liable
for an accident involving the said vehicle if the same was
driven without his consent or knowledge and by a person
not employed by him.
The registered owner rule applies even if the
registered owner leased the vehicle to another
who is the actual operator.
- CASE: BA Finance Corp. v. CA
ISSUES:
1. W/N petitioner can be held responsible to the victim
albeit the truck was leased to Rock Component
Philippines when the incident occurred
2. W/N BA Finance can escape liability by proving the
actual/real owner of the truck.
HELD:
1. YES. The registered owner of a certificate of public
convenience is liable to the public for the injuries or
damages suffered by passengers or third persons
caused by the operation of said vehicle, even though the
same had been transferred to a third person. In dealing
with vehicles registered under the Public Service Law,
the public has the right to assume or presumed that the
registered owner is the actual owner. The registered
owner of any vehicle, even if not used for a public
service, should primarily responsible to the public or to
the third persons for injuries caused the latter while the
vehicle is being driven on the highways or streets.
2. NO. There is a presumption that the owner of the
guilty vehicle is the defendant-appellant as he is the
registered owner in the Motor Vehicle Office. The main
aim of motor vehicle registration is to identify the owner
so that if any accident happens, or that any damage or
injury is caused by the vehicle on the public highways,
responsibility therefor can be fixed on a definite
individual, the registered owner.
- CASE: PCI Leasing and Finance, Inc. v.
UCPB General Insurance, Inc.
ISSUES:
1. W/N PCI, as registered owner of a motor vehicle that
figured in a quasi-delict may be held liable, jointly and
severally, with the driver thereof, for the damages
caused to third parties.
CABRERA. DELOS SANTOS. BACAY. ESCASINAS. TEMANIL. MELGAR. UY. FRANCISCO.
2. W/N PCI, as a financing company, is absolved from
liability by the enactment of Republic Act (R.A.) No.
8556, or the Financing Company Act of 1998.
HELD:
1. YES. The registered owner of the vehicle driven by a
negligent driver may still be held liable under applicable
jurisprudence involving laws on compulsory motor
vehicle registration and the liabilities of employers. In
this case, there is not even a sale of the vehicle
involved, but a mere lease, which remained unregistered
up to the time of the occurrence of the quasi-delict that
gave rise to the case. A lease, unlike a sale, does not
even involve a transfer of title or ownership, but the mere
use or enjoyment of property.
2. NO. The new law, R.A. No. 8556, notwithstanding
developments in foreign jurisdictions, do not supersede
or repeal the law on compulsory motor vehicle
registration. No part of the law expressly repeals Section
5(a) and (e) of R.A. No. 4136, as amended, otherwise
known as the Land Transportation and Traffic Code.
Thus, the rule remains the same: a sale, lease, or
financial lease, for that matter, that is not registered with
the Land Transportation Office, still does not bind third
persons who are aggrieved in tortuous incidents, for the
latter need only to rely on the public registration of a
motor vehicle as conclusive evidence of ownership.
The registered owner rule applies in a financial
lease.
If the registered owner is made liable despite the
transfer of the vehicle, the transferee is liable to
the registered owner for the damages caused to
the passenger.
Kabit System
The registered owner rule is applicable
whenever the persons involved are engaged in
the kabit system.
It is an arrangement whereby a person who has
been granted a certificate of public convenience
allows other persons who own motor vehicles to
operate them under his license, sometimes for a
fee or percentage of earnings.
It is contrary to public policy, thus, void and
inexistent under Art. 1409.
- CASE: Lim, et al. v. CA, et al.
ISSUE: W/N the new owner of a passenger jeepney
(Donato) who continue to operate the same under the
“kabit system” and in the course thereof meets an
accident has the legal personality to bring action for
damages
HELD: YES. Thrust of the law in enjoining the kabit
system is not so much as to penalize the parties but to
identify the person upon whom responsibility may be
fixed in case of an accident with the end view of
protecting the riding public. The kabit system is an
arrangement whereby a person who has been granted a
certificate of public convenience allows other persons
who own motor vehicles to operate them under his
license, sometimes for a fee or percentage of the
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earnings. In the present case it is at once apparent that Obligations of the Parties
the evil sought to be prevented in enjoining the kabit It aims to explain the respective duties of the
system does not exist. carrier and the passenger or shipper before,
during and after the actual transportation of the
not to penalize the parties but to identify the good and passenger.
person upon whom responsibility may be fixed in
case of an accident Obligations of the Carrier
The policy loses its force if the public is not Most basic obligation:
deceived, much less involved. a) To transport the goods or
passenger safely to the
Pari Delicto Rule agreed destination.
Persons who are parties to the kabit system Duties of the Common Carrier:
cannot invoke the same as against each other a) To accept passengers and
either to enforce their illegal agreement or to goods without discrimination
invoke the same to escape liability. b) To seasonably deliver the
Having entered into an illegal contract, neither goods or bring the
can seek relief from the courts, and each must passenger to the destination
bear the consequences of his acts. c) To deliver the goods to the
- CASE: Teja Marketing v. IAC proper person
d) To exercise extraordinary
ISSUE: W/N CA erred in applying the doctrine of "pari diligence in the performance
delicto." of its duties.
HELD: NO. Unquestionably, the parties herein operated
under an arrangement, commonly known as the "kabit DUTY TO ACCEPT
system" whereby a person who has been granted a
certificate of public convenience allows another person General Rule: A common carrier that is
who owns motor vehicles to operate under such granted a certificate public
franchise for a fee. It is a fundamental principle that the convenience is duty bound to
court will not aid either party to enforce an illegal accept passengers or cargo
contract, but will leave both where it finds them. without any discrimination.
The present laws forbid failures or
- CASE: Lita Enterprises, Inc. v. IAC refusals to receive persons or property
for carriage which have the effect of
ISSUE: W/N Lita Enterprises is liable to the heir of victim giving an unreasonable or unnecessary
who died as a result of gross negligence of Ocampo and preference or advantage to any person,
Garcia’s driver while driving the taxicabs. locality or particular kind of traffic, or of
HELD: YES. The parties herein operated under an subjecting any person, locality or
arrangement, commonly known as the "kabit system", particular kind of traffic to any undue or
whereby a person who has been granted a certificate of unreasonable prejudice or
convenience allows another person who owns motors discrimination.
vehicles to operate under such franchise for a fee. It is a With respect to passengers, it has been
fundamental principle that the court will not aid either explained that a vessel generally
party to enforce an illegal contract, but will leave them engaged as a common carrier of
both where it finds them. Article 1412 of the Civil Code passengers is bound to receive for
denies them such aid. carriage, without discrimination all
proper persons who desire it and
Aircrafts and Vessels properly offer to become passengers
applies to aircrafts and vessels that are covered unless some sufficient excuse exists for
by certificates of public convenience and refusing them.
necessity
It is a basic rule that no person can operate a Exceptions: The rule prohibiting carriers
common carrier without securing a certificate of engaged in public transportation
public convenience and necessity. from selecting it passengers and
cargoes is not absolute.
BOUNDARY SYSTEM
The carrier cannot: Valid Grounds for Non-Acceptance:
- escape liability by claiming that the driver is a) When the goods sought to
a lessee be transported are
- exempt himself on the ground he is a lessor dangerous objects or
substances including
Chapter 2
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dynamites and other The carrier is duty bound to deliver

explosives. the goods within the time agreed
b) The goods are unfit for upon to the designated consignee.
transportation The goods must be delivered within
c) Acceptance would result in the stipulated time. Where a carrier
overloading has made an express contract to
d) The goods are considered transport and deliver property within
contrabands or illegal goods a specified time, he is bound to fulfill
e) Goods are injurious to the contract and is liable for any
health delay, no matter from what cause it
f) Goods will be exposed to may have arisen. (Art 358,CC)
untoward danger like flood, When a common carrier undertakes
capture by enemies and the to convey goods, the law implies a
like contract that they shall be delivered
g) Goods like livestock will be at destination within a reasonable
exposed to diseases time, in the case of absence, of any
h) Stike agreement as to the time of delivery.
i) Failure to tender goods on What may be considered? Expected
time date of arrival refelcted in the bill of
lading or the nature of goods
Carriers may be granted the authority to Excusable delays in carriage
carry goods that are by nature SUSPEND but do not generally
dangerous or hazardous. terminate, the contract of carriage,
and when the cause is removed, the
master must proceed with the
Memorandum Circular No. 101 dated April 6, 1995 voyage and make delivery.
Disallows the carriage of hazardous
goods if there is no Special Permit to Consequences of Legally
Carry from MARINA Inexcusable Delay
The circular classifies a) The carrier is still liable
dangerous/hazardous goods and even if natural disaster
provides for the requirements for the caused the damage (Art
issuance of the permit 1740, CC)
b) The stipulation limiting the
Memorandum Circular No. 147 liability of the carrier is
Provides for the rules on compliance inoperative (Art 1747, CC)
with clearance requirements for the c) The carrier is liable for the
carriage of vehicles, animals, forest damages caused by the
products, fish and aquatic products, delay
minerals and mineral products and toxic d) The consignee may
nd hazardous materials to be loaded on exercise his right to
board inter-island vessels. abandon under Art 371 of
the Code of Commerce
Carriers may refuse to accept goods
that are unfit for transportation because The carrier will be liable if there is
of improper packagin or defect in their damage because of delay or
containers. However, the carrier may because of improper deviation.
choose to transport such goods and limit The first par. of Art. 371 of the Code
its liability by stipulation. (Art 356-357, of Cemmerce provides that in cases
CC) of delay on account of the fault of
Art. 1742 of CC provides that even if the the carrier, the consignee may leave
loss, destruction, or deterioration of the the goods transported in the hands
goods shold be caused by the character of the carrier, informing him thereof
of the goods or the faulty nature of the in writing before the arrival of the
packing or the containers, the common same at the point of detination. The
carrier must exercise due diligence to carrier shall be liable for the total
forestall or lessen the loss. value of the goods.

DUTY TO DELIVER THE GOODS RIGHTS OF PASSENGERS IN CASE OF DELAY

CABRERA. DELOS SANTOS. BACAY. ESCASINAS. TEMANIL. MELGAR. UY. FRANCISCO. Page 7
 TRANSPORTATION AND PUBLIC UTILITIES LAW
ART. 698. In case a voyage already begun should be
interrupted, the passengers shall be obliged to pay the
fare in proportion to the distance covered, without right
to recover for losses and damages if the interruption is
due to fortuitous event or force majeure, but with a right
to indemnity if the interruption should have been caused
by the captain exclusively. If the interruption should be
caused by the disability of the vessel and a passenger
should agree to await the repairs, he may not be
required to pay any increased price of passage, but his
living expenses during the stay shall be for his own
account.
The carrier is liable for any loss or damage,
including any pecuniary loss or loss of profit, which
the passenger may have suffered by reason
thereof.
Effect of decision of passenger:
Case:Trans-Asia Shipping Lines, Inc. v. CA
*The passenger was not able to recover lost profits
which resulted because of his own decision to
disembark.
Facts: The plaintiff, a public attorney, boarded a vessel
for its voyage from Cebu City to Cagayan de Oro City.
The vessel, after an hour of slow voyage, stopped near
Kawit Island and dropped its anchor thereat. After an
hour of stillness, some passengers demanded that they
should be allowed to return to Cebu City for they no
longer willing to continue their voyage to Cagayan de
Oro City. The captain acceded to their request. At Cebu
City, the plaintiff together with other passengers were
allowed to disembark. Thereafter, the vessel proceeded
to Cagayan de Oro City. Plaintiff, the next day, boarded
the M/V Asia Japan for its voyage to Cagayan de Oro
City, likewise a vessel of defendant.
Held: SC explained that the carrier would have been
liable for loss of income if the plaintiff was unable to
report to his office on the day he was supposed to arrive
were it not for the delay. This however, assumes that he
stayed on the vessel and was with it when it thereafter
resumed its voyage; but he did not. Consequently, any
further delay then in the plaintiff’s arrival at the port of
destination was caused by his decision to disembark.
MARINA Regulation: “in case the vessel is not
able to depart on time and the delay is
unreasonable, the passenger may opt to have
his/her ticket immediately refunded without any
refund service fee from the authorized issuing/
ticketing Office.
PLACE OF DELIVERY:
The goods should be delivered to the consignee in the
place agreed upon by the parties.
If the specific place or warehouse is designated in the
bill of lading, the goods must be delivered in such
CABRERA. DELOS SANTOS. BACAY. ESCASINAS. TEMANIL. MELGAR. UY. FRANCISCO.
place even if it is not the usual place of delivery in the
place of destination.
ART. 360. The shipper, without changing the place
where the delivery is to be made, may change the
consignment of the goods which he delivered to the
carrier, provided that the time of ordering the change of
consignee the bill of lading signed by the carrier, if one
has been issued, be returned to him, in exchange for
another wherein the novation of the contract appears.
The expenses which this change of consignment
occasions shall be for the account of the shipper.
TO WHOM DELIVERED
- The goods should be delivered to the consignee or any
other person to whom the bill of lading was validly
transferred or negotiated.
ART. 368. The carrier must deliver to the consignee,
without any delay or obstruction, the goods which he
may have received, by the mere fact of being named in
the bill of lading to receive them; and if he does not do
so, he shall be liable for the damages which may be
caused thereby.
ART. 369. If the consignee cannot be found at the
residence indicated in the bill of lading, or if he refuses to
pay the transportation charges and expenses, or if he
refuses to receive the goods, the municipal judge, where
there is none of the first instance, shall provide for their
deposit at the disposal of the shipper, this deposit
producing all the effects of delivery without prejudice to
third parties with a better right.
Effect of Negotiable Bill of Lading: Negotiable bill
of lading is a document that may be transferred to a
holder for value. In case of such transfer, the carrier
is obligated to deliver the goods to the transferee or
holder. The transferee to whom the bill of lading has
been negotiated acquires the direct obligation of the
carrier from the time of such negotiation. There is
even no need to notify the carrier that there was such
a transfer.
ART. 1513. A person to whom a negotiable document of
title acquires thereby: (1) Such title to the goods as the
person negotiating the document to him had or had
ability to convey to a purchaser in good faith for value
and also such title to the goods as the person to whose
order the goods were to be delivered by the terms of the
document had or had ability to convey to a purchaser in
good faith for value; and (2) The direct obligation of the
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 TRANSPORTATION AND PUBLIC UTILITIES LAW
bailee issuing the document to hold possession of the
goods for him according to the terms of the document as
fully as if such bailee had contracted directly with him.
DELAY TO TRANSPORT PASSENGERS
- The carrier must commence its trip within a reasonable
time. The carrier shall be made liable when the vessel or
vehicle is unreasonably delayed.
Inter-Island Vessels: Effects of “delayed and unfinished
voyage:”
3.1. In case the vessel cannot continue or complete her
voyage for any cause, the carrier is under obligation to
transport the passenger to his/her destination at the
expense of the carrier including free meals and lodging
before the said passenger is transported to his/her
destination. A passenger may opt to have his/her ticket
refunded in full if the cause of the unfinished voyage is
due to the negligence of the carrier, or, to an amount
that will suffice to defray transportation cost at the
shortest possible route towards his/her destination if the
cause of the unfinished voyage is a fortuitous event.
3.2.The carrier shall provide meals, free of charge,
during mealtime in case the vessel is delayed in the
arrival at the port of destination.
3.3. In case of delay in the departure at the port of origin
due to the carrier’s negligence, the carrier is also under
the obligation to provide meals, free of charge, during
meal time to ticketed passengers for the particular
voyage. If the cause of the delay is a fortuitous event,
the carrier is under no obligation to serve free meals to
the passengers.
3.4. The carrier is under obligation to duly inform the
passengers of the change in sailing schedule of the
vessel(s).
DUTY TO EXERCISE EXTRAORDINARY DILIGENCE
-A common carrier is required to faithfully comply with
his obligation to deliver the goods and to ferry the
passenger to the point of destination. The goods should
be delivered in the same condition that they were
received and to transport passengers without
encountering any harm or loss. In the exercise of this
obligation, the common carrier is obligated to exercise
extraordinary diligence.
ART. 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the
CABRERA. DELOS SANTOS. BACAY. ESCASINAS. TEMANIL. MELGAR. UY. FRANCISCO.
goods and for the safety of the passengers transported
by them, according to all the circumstances of each
case.
Such extraordinary diligence in the vigilance over the
goods is further expressed in Articles 1734, 1735, and
1745, Nos. 5,6, and 7, while the extraordinary diligence
for the safety of the passengers is further set forth in
Articles 1755 and 1756.
ART. 1755. A common carrier is bound to carry the
passengers safely as far as human care and foresight
can provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances.
Related provisions of Code of Commerce:
ART. 363. Outside of the cases mentioned in the second
paragraph of Article 361, the carrier shall be obliged to
deliver the goods shipped in the same condition in
which, according to the bill of lading, they were found at
the time they were received, without any damage or
impairment, and failing to do so, to pay the value which
those not delivered may have at the point and at the time
at which their delivery should have been made.
If those not delivered form part of the goods transported,
the consignee may refuse to receive the latter, when he
proves that he cannot make use of them independently
of the others.
ARTICLE 364. If the effect of the damage referred to
in Article 361 is merely a diminution in the value of the
goods, the obligation of the carrier shall be reduced to
the payment of the amount which, in the judgment of
experts, constitutes such difference in value.
ARTICLE 365. If, in consequence of the damage, the
goods are rendered useless for sale and consumption
for the purposes for which they are properly destined,
the consignee shall not be bound to receive them, and
he may have them in the hands of the carrier,
demanding of the latter their value at the current price on
that day.
If among the damaged goods there should be some
pieces in good condition and without any defect, the
foregoing provision shall be applicable with respect to
those damaged and the consignee shall receive those
which are sound, this segregation to be made by distinct
and separate pieces and without dividing a single object,
unless the consignee proves the impossibility of
conveniently making use of them in this form.
The same rule shall be applied to merchandise in bales
or packages, separating those parcels which appear
sound.
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 TRANSPORTATION AND PUBLIC UTILITIES LAW
PRESUMPTION OF NEGLIGENCE
-In case of loss of effects or cargo or passengers or
death or injuries to passengers, the common carrier is
presumed to be at fault or have acted negligently unless
he had observed extraordinary diligence in the vigilance
thereof. The court need not make an express finding of
fault or negligence of common carriers, the law imposes
liability upon common carriers, as long as it is shown
that:
(1) there exist a contract between the passenger or the
shipper and the common carrier; and (2) that the loss,
deterioration, injury or death took place during the
existence of the contract.
ART. 1735. In all cases other than those mentioned in
Nos. 1,2,3,4 and 5 of the preceding article, if the goods
are lost, destroyed or deteriorated, common carriers are
presumed to have been at fault or to have acted
negligently, unless they prove that they observed
extraordinary diligence as required in Article 1733.
ART. 1756. In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or
to have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed in
Articles 1733 and 1755.
Case: Belgian Overseas Chartering and Shipping,
N.V. v. Phil. First Ins. Co.
Doctrine:Mere proof of delivery of the goods in good
order to common carrier and their arrival in bad order at
their destination (or failure to transport the passenger
safely) constitutes a prima faciecase of fault or
negligence against the carrier. If no adequate
explanation is given as to how the deterioration, loss, or
destruction of the goods happened, the transporter shall
be held responsible.
Facts:CMC Trading shipped on board the M/V Anangel
Sky at Germany 242 coils of various Prime Cold Rolled
Steel sheets for transportation to Manila consigned to
the Phil. Steel Trading Corp. Upon its arrival at the port,
4 coils were found to be in bad order which made it unfit
for the intended purpose. The consignee Phil Steel
Trading Corp. declared it as total loss. Despite receipt of
a formal demand, defendant-appellees refused to submit
to the consignee’s claim.
Held: There is no showing that petitioners exercised due
diligence to forestall or lessen the loss. Common
carriers, from the nature of their business and for
reasons of public policy, are bound to observe
CABRERA. DELOS SANTOS. BACAY. ESCASINAS. TEMANIL. MELGAR. UY. FRANCISCO.
extraordinary diligence and vigilance with respect to the
safety of the goods and the passengers they
transport.They are presumed to have been at fault or
negligent if the goods they transported deteriorated or
got lost or destroyed unless they prove that they
exercised extraordinary diligence in transporting the
goods.
Case: Mariano Jr. v. Calleja
- In this case, the presumption of negligence was
rebutted by the common carrier when it was established
that the accident was solely caused by the negligence of
the other vehicle that was involved in the collision. The
evidence in this case shows that before the collision, the
passenger bus was cruising on its rightful lane along the
Aguinaldo Highway when the trailer truck coming from
the opposite direction, on full speed, suddenly swerved
and encroached on its lane, and bumped the passenger
bus on its left middle portion. The driver of the bus had
every right to expect that the trailer truck coming from
the opposite direction would stay on its proper lane. He
was not expected to know that the trailer truck was
abrupt and it was running on fast speed as it was found
500 meters away from the point of collision. Any doubt
as to the culpability of the trailer truck likewise vanished
when he pleaded guilty to the charge of reckless
imprudence resulting to multiple slight physical injuries
and damage to property in a criminal case involving the
same incident.
DURATION OF DUTY IN CARRIAGE OF GOODS
Due diligence should be exercised the moment
the goods are delivered to the carrier.
ARTICLE 1736. The extraordinary responsibility of the
common carrier lasts from the time the goods are
unconditionally placed in the possession of, and
received by the carrier for transportation until the same
are delivered, actually or constructively, by the carrier to
the consignee, or to the person who has a right to
receive them, without prejudice to the provisions of
article 1738.
ARTICLE 1737. The common carrier’s duty to observe
extraordinary diligence in the vigilance over the goods
remains in full force and effect even when they are
temporarily unloaded or stored in transit, unless the
shipper or owner has made use of the right of stoppage
in transitu.
ARTICLE 1738. The extraordinary liability of the
common carrier continues to be operative even during
the time the goods are stored in a warehouse of the
carrier at the place of destination, until the consignee
has been advised of the arrival of the goods and has had
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reasonable opportunity thereafter to remove them or
otherwise dispose of them.
The goods are deemed delivered to the carrier
when the goods are ready for and have been
placed in the exclusive possession, custody and
control of the carrier for the purpose of their
immediate transportation and the carrier has
accepted them.
COMMENCEMENT OF DUTY IN CARRIAGE OF
PASSENGERS
TRAINS
o The extraordinary responsibility of
common carriers commences the
moment the person who purchases the
ticket or (or a token or card) from the
carrier presents himself at the proper
place and in proper manner to be
transported with a bon fide intent to ride
the coach.
CARRIAGE BY SEA
o The duty of common carrier commences
as soon as a person with bona fide
intention of taking passage places
himself in the care of the carrier or its
employees and is accepted
aspassenger.
LAND TRANSPORTATION
o Buses and Jeepneys are duty bound to
stop their conveyances for a reasonable
length of time in order to afford
passengers an opportunity to board and
enter, and they are liable for injuries
suffered by boarding passengers
resulting from the sudden starting up or
jerking of their conveyances while they
do so.
o The rule is that once a public utility bus
or jeepney stops, it is making a
continuous offer to bus riders.
o The duty to exercise utmost diligence
with respect to passengers will not
ordinarily terminate until the passenger
has, after reaching his destination,
safely alighted from the carrier’s
conveyance or had a reasonable
opportunity to leave the carrier’s
premises. All persons who remain on
the premises within a reasonable time
after leaving the conveyance are to be
deemed passengers, and what is
reasonable time or reasonable delay
within this rule is to be determined from
all the circumstances, and includes
reasonable time to see after his
baggage and prepare for his departure.
3. DEFENSES OF COMMON CARRIERS
CABRERA. DELOS SANTOS. BACAY. ESCASINAS. TEMANIL. MELGAR. UY. FRANCISCO.
Carrier is not an insurer of passenger’s safety
However, failure to exercise the “utmost degree”
of diligence will make the carrier liable (Art.
1756)
CASE: Necessito vs. Paras (1958)
A mother and her son boarded a passenger
auto-truck of the Philippine Rabbit Bus
Lines. While entering a wooden bridge, its
front wheels swerved to the right, the driver
lost control and the truck fell into a breast-
deep creek. The mother drowned and the
son sustained injuries.
HELD: Carrier is not an insurer of the
passenger’s safety. His liability rest upon
negligence, that his failure to exercise
utmost degree of diligence that the law
requires. The passenger has neither choice
nor control over the carrier in the selection
and use of the equipment and the
appliances in use by the carrier. Having no
privity whatever with the manufacturer or
vendor of the defective equipment, the
passenger has no remedy against him,
while carrier usually has. It is but logical,
therefore, that the carrier, while not an
insurer of the safety of his passengers,
should nevertheless be held to answer for
flaws of his equipment if such cause were
at all discoverable.
3.01 Proximate Causation
Definition: “that cause, which, in natural and
continuous sequence, unbroken by any
sufficient intervening cause, produces the injury,
and without which the result would not have
occurred”
Doctrine of Proximate Cause in common carrier
– the common carrier is presumed negligent the
moment he fails to deliver the goods to its
destination or the moment the passenger did not
reach his destination while riding the carrier
T/F: Doctrine of Proximate Cause inapplicable to
contracts of carriage? FALSE. The presumption
of negligence only arises upon the happening of
the accident.
CASE: Calalas vs. CA (2000)
Sunga took a passenger jeepney owned
and operated by petitioner Vicente Calalas.
As the jeepney was already full, Calalas
gave Sunga a stool at the back of the door
at the rear end of the vehicle. Along the
way, the jeepney stopped to let a
passenger off. Sunga stepped down to give
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way when an Isuzu truck owned by
Francisco Salva and driven by Iglecerio
Verena bumped the jeepney. As a result,
Sunga was injured. Sunga filed a complaint
against Calalas for violation of contract of
carriage. Calalas filed a third party
complaint against Salva.
HELD: It is immaterial that the proximate
cause of the collision between the jeepney
and the truck was the negligence of the
truck driver. The doctrine of proximate
cause is applicable only in actions for
quasi-delict, not in actions involving breach
of contract. The doctrine is a device for
imputing liability to a person where there is
no relation between him and another party.
a. Absence of Cause as a defense
Passenger or shipper has no burden of proving
that his injury is was caused by the negligent or
intentional act of the carrier or his agents
b. Doctrine of Last Clear Chance
Definition: “where both parties are negligent but
the negligent act of one is appreciably later than
that of the other, or where it is possible to
determine whose fault or negligence caused the
loss, the one who had the last clear opportunity
to avoid the loss but failed to do so, is
chargeable with the loss.”
Definition: “the antecedent negligence of one
does not preclude him from recovering damages
caused by the supervening negligence of the
other, who had the last fair chance to prevent
the impeding harm by the exercise of due
diligence”
The negligence of one – which is not just
contributory negligence – will be considered an
efficient intervening cause.
Not applicable in the case between a passenger
and the carrier and the concurrent negligence of
the carrier and a third party are the proximate
cause of the injury.
CASE: Tiu vs. Arriesgado (2004)
As the bus was approaching the bridge,
Las Piñas saw the stalled truck, which was
then about 25 meters away. He applied the
brakes and tried to swerve to the left to
avoid hitting the truck. But it was too late;
the bus rammed into the trucks left rear.
The impact damaged the right side of the
busand left several passengers injured.
HELD: The principle of last clear chance is
inapplicable in the instant case, as it only
applies in a suit between the owners and
drivers of two colliding vehicles. It does not
CABRERA. DELOS SANTOS. BACAY. ESCASINAS. TEMANIL. MELGAR. UY. FRANCISCO.
arise where a passenger demands
responsibility from the carrier to enforce its
contractual obligations, for it would be
inequitable to exempt the negligent driver
and its owner on the ground that the other
driver was likewise guilty of negligence.
The common law notion of last clear
chance permitted courts to grant recovery
to a plaintiff who has also been negligent
provided that the defendant had the last
clear chance to avoid the casualty and
failed to do so.
3.02 New CC provisions
Art. 1734. Common carriers are responsible for the loss,
destruction, or deterioration of the goods, unless the
same is due to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other natural
disaster or calamity;
(2) Act of the public enemy in war, whether international
or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing
or in the containers;
(5) Order or act of competent public authority.
Art. 1742. Even if the loss, destruction, or deterioration
of the goods should be caused by the character of the
goods, or the faulty nature of the packing or of the
containers, the common carrier must exercise due
diligence to forestall or lessen the loss.
Art. 1743. If through the order of public authority the
goods are seized or destroyed, the common carrier is
not responsible, provided said public authority had
power to issue the order.
a. Defenses in carriage of goods
Not all of these are available in contracts of
carriage
Defenses that can be raised by common carriers
in case of loss, destruction, or deterioration of
the goods are the ff:
(1) Flood, storm, earthquake, lightning, or other
natural disaster or calamity;
(2) Act of the public enemy in war, whether
international or civil;
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 TRANSPORTATION AND PUBLIC UTILITIES LAW
(3) Act or omission of the shipper or owner of
the goods;
(4) The character of the goods or defects in the
packing or in the containers;
(5) Order or act of competent public authority;
and
(6) Exercise of extraordinary diligence
b. Exclusivity of defenses
Art. 1735 is not exclusive (refer to complete
enumeration above)
No other defense may be raised by the common
carrier in the carriage of goods
If not one of those enumerated is present, the
carrier is liable.
3.04 Fortuitous Event
In order to be a valid defense, it must be
established to be the proximate cause of the
loss
Even in cases where a natural disaster is the
proximate and only cause of the loss, a common
carrier is still required to exercise due diligence
to prevent or minimize loss before, during and
after the occurrence of the natural disaster, for it
to be exempt from liability under the law for the
loss of the goods
T/F: All types of natural disaster exempt
common carriers from liability? FALSE. The
following must be present:
a. It must be a fortuitous event (all requisites of
fortuitous event)
b. It must be the proximate cause of the loss
c. The common carrier must exercise
extraordinary diligence to prevent or lessen the
loss
a. Requisites
(1) The event must be impossible to foresee or if it
can be foreseen, it is impossible to avoid
(2) It must be independent of human will
(3) It must render it impossible for the debtor to fulfil
his obligation in a normal manner
(4) The debtor must be free from any participation in
or the aggravation of the injury resulting to the
creditor
CASE: Phil. American Gen. Insurance Co. vs.
PKS Shipping Co. (2003)
Davao Union Marketing Corporation
(DUMC) contracted the servicesof PKS
CABRERA. DELOS SANTOS. BACAY. ESCASINAS. TEMANIL. MELGAR. UY. FRANCISCO.
Shipping Company (PKS Shipping) for the
shipment to Tacloban City of 75,000 bags
of cement worth P3,375,000. DUMC
insured the goods for its full value with
Philippine American General Insurance
Company (Philamgen).
December 22, 1988 9 pm: While Limar
I was being towed by PKS’ tugboat MT Iron
Eagle, the barge sank a couple of miles off
the coast of Dumagasa Point, in
Zamboanga del Sur, bringing down with it
the entire cargo of 75,000 bags of cement.
HELD: The sinking of a barge that was
being towed by a tug boat was the result of
a fortuitous event when it resulted because
the vessels involved were suddenly tossed
by waves of extraordinary height and
buffeted by strong winds resulting in the
entry of water into the barge’s hatches.
b. Participation of the carrier
The carrier can only be excused from liability if
the natural disaster is the proximate and only
cause of the loss
Art. 1739. In order that the common carrier may be
exempted from responsibility, the natural disaster must
have been the proximate and only cause of the loss.
However, the common carrier must exercise due
diligence to prevent or minimize loss before, during and
after the occurrence of flood, storm or other natural
disaster in order that the common carrier may be
exempted from liability for the loss, destruction, or
deterioration of the goods. The same duty is incumbent
upon the common carrier in case of an act of the public
enemy referred to in Article 1734, No. 2.
c. Fire
Fire is NOT considered as a natural disaster or
calamity
CASE: Eastern Shipping Lines vs. IAC (1987)
M/S Asiatica, a vessel operated by Eastern
Shipping Lines (ESL) loaded at Kobe,
Japan, for transportation to Manila, 5K
pieces of calorized lance pipes in 28
packages valued at P256,039 consigned to
Philippine Blooming Mills Co. (BMCI) and 7
cases of spare parts valued at P92,361.75,
consigned to Central Textile Mills, Inc.
(CTMI). Both sets of goods were insured
against marine risk for their stated value
with Development Insurance and Surety
Corp. (DISC).
En route to Manila, the vessel caught fire
and sank, resulting in the total loss of ship
and cargo. ESL denied liability on the
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 TRANSPORTATION AND PUBLIC UTILITIES LAW
ground that the loss was due to
extraordinary fortuitous event.
HELD: Fire may not be considered a
natural disaster or calamity. It does not fall
within the category of an act of God unless
caused by lightning or by other natural
disaster or calamity. It may even be caused
by the actual fault or privity of the carrier.
Hence, the common carrier shall be
presumed to have been at fault or to have
acted negligently, unless it proves that it
has observed the extraordinary diligence
required by law.
d. Storm
The presence of strong wind does not by itself
justify the conclusion that there is a storm.
Monsoon wind is not an unusual occurrence and
is a normal and foreseeable condition.
However, there may be cases when strong
winds may be unforeseeable.
CASE: Phil. American Gen. Insurance Co. vs.
MCG Marine Services (2005)
HELD: The findings of the Board of Marine
Inquiry indicate that the attendance of
strong winds and huge waves while the
M/V Peatheray Patrick-G was sailing
through Cortes, Surigao del Norte on
March 3, 1987 was indeed fortuitous.
Hence, the carrier cannot be made liable
because the proximate and only cause of
the loss was the unforeseeable strong
winds and huge waves ranging from 6-10
ft. in height.
HIJACKING
- does not fall under the categories of exempting causes
- the common carrier is presumed to be at fault or to
have acted negligently unless there is a proof of
extraordinary diligence on its part (Art. 1735)
NOTE: Art. 1735 applies not Art. 1734 since hijacking is
not included in list of exempting causes1
1 vehicles in which to carry the travelling public
Article 1734. Common carriers are responsible for the loss,
destruction, or deterioration of the goods, unless the same is
due to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other natural
disaster or calamity; (2) Act of the public enemy in
war, whether international or civil; (3) Act or omission
of the shipper or owner of the goods; (4) The
character of the goods or defects in the packing or in
the containers; (5) Order or act of competent public
authority.
Article 1735. In all cases other than those mentioned in Nos. 1,
2, 3, 4, and 5 of the preceding article, if the goods are lost,
CABRERA. DELOS SANTOS. BACAY. ESCASINAS. TEMANIL. MELGAR. UY. FRANCISCO.
De Guzman vs. CA
- Under Art. 1745(6), common carrier is held
responsible, and will not be allowed to divest or
diminish such responsibility – even for acts of
strangers like thieves or robbers, EXCEPT
where such thieves or robbers acted “with grave
or irresistible threat, violence or force”
Hi-jacking cannot exculpate the carrier from liability if it is
shown that the employees of the carrier were not
overwhelmed by the hijackers and that there was no
showing of irresistible force. Since, there were 4
employers while there were only 2 hijackers and only
one of them was armed with bladed weapon.
ON THE OTHER HAND, a hijacking by 3 armed men is
an event which is considered to be beyond the control of
the carrier. Thus, the carrier may be adjudged from
liability if it can be proven that the hijacking was
unforeseeable.
MECHANICAL DEFECTS – damage or injury resulting
from mechanical defects is not a damage or injury that
was caused by fortuitous event; carrier is liable to its
passengers for damages caused by mechanical defects
of the conveyance (breakage of a faulty drag-link spring,
fracture of the vehicle’s right steering knuckle, defective
breaks)
- One of the reason why carrier is made liable
despite the presence of mechanical defect is the
absence of privity between the passenger and the
manufacturer
- Carrier must show that accident was due to a latent
defect; that builders could not by the exercise of the
same care have discovered the defect or foreseen
the result
MANUFACTURER AS AN AGENT
- Manufacturer is considered as being in law the
agent or servant of the carrier; good repute of the
manufacturer will not relieve the carrier from liability
- Failure of manufacturer to make the test will be
deemed a failure by the carrier to make it
COMMON CARRIER’S DUTIES TO PUBLIC – common
carrier undertakes certain duties toward the public:
1. To provide itself with suitable and safe cars and
2. To furnish safe track
3. To operate them in a safe manner
j. TIRE BLOW-OUTS
destroyed or deteriorated, common carriers are presumed to
have been at fault or to have acted negligently, unless they
prove that they observed extraordinary diligence as required in
article 1733.
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 TRANSPORTATION AND PUBLIC UTILITIES LAW
Case: Juntilla v. Fontanar
“Tire-blowouts” was not considered as fortuitous event
although it was alleged that the tires were in good
condition; no evidence was presented to show that the
evidence were due to adverse road conditions – the
carrier must prove all angles.
The explosion could have been caused by too much air
pressure injected into the tires and the fact that the
jeepney was overloaded and speeding at the time of the
accident.
OTHER INVALID DEFENSES
1. Damage to cargo due to EXPLOSION of
another cargo – not attributable to peril of the
seas or accidents of navigation.
2. Damage by WORMS and RATS resulting to
damage to cargoes – can’t be cited as an
excuse by the carrier.
3. Damage by WATER through a port which had
been left open or insufficiently fastened on
sailing.
4. Carrier cannot escape liabilities to third persons
if damage was caused by BARRATRY – where
the master or crew of the ship committed
unlawful acts contrary to their duties – includes
theft and fraudulently running the ship ashore.
PUBLIC ENEMY – exception is understandable
because the government itself is called upon to protect
its subjects from loss from such hazard and private
citizens have no power to furnish security and protection
required.
- the term “public enemy” presupposes the existence of
an actual state of war , and refers to the government of
a foreign nation at war with the country to which the
carrier belongs,though not necessarily with that to which
the owner of the goods owes allegiance.
-Thieves, rioters, robbers , insurrectionists are not
classified as public enemy
-pirates on the high seas stand as an exception.
Considered enemies of all civilized nation and indeed of
human race.
- the generally accepted definition of public enemy
does not embrace rebels in insurrection against
their own government; when they hold in a hostile
manner a portion of a territory, declared independence,
cast off allegiance, have a regularly organized force in
armed hostility in the government, and authority of the
latter is for the time overthrown, such may take on the
dignity of a civil war, that when magnified the parties are
belligerents and thus entitled to belligerent rights. War
therefore may be international or civil, foreign or
domestic, and whenever an armed contest assumes
CABRERA. DELOS SANTOS. BACAY. ESCASINAS. TEMANIL. MELGAR. UY. FRANCISCO.
such proportions, the combatants therein come within
the legal comprehension of public enemies.
-act of public enemy not only exception to civil code but
also under Carriage of Goods by Sea Act.
- in order that the common carrier may be exempted ,
the act of public enemy must have been the proximate
and only cause of the loss. Also requires to exercise due
diligence to prevent or minimize loss before during and
after the performance of the act of a public enemy.
IMPROPER PACKING. Stated under 4th par.Of Art.
1734. Similarly the carriage of the Goods by Sea Act
provides that the carrier shall not be liable for:
1) wastage in bulk or weight or any other loss or
damage arising from inherent defect, quality or vice of
goods
2) insufficiency of packing
3) insufficiency or inadequacy of the marks
4) atent defects not discoverable by due diligence.
1742 of the Civil code likewise provides:
“Article 1742: even if the loss, destruction , or
deterioration of the goods should be caused by the
character of the goods , or the faulty nature of the
packing or of the containers, the common carrier must
exercise due diligence to forestall or lessen the loss”
-defect is want or absence of something necessary for
completeness or perfection... Defectiveness is not
synonymous with inferiority. Inferiority meansof poor
quality, mediocre or second rate.
- in Philippine Charter Insurance Corporation v Unknown
Owner of the Vessel M/V National Honor, it was
established that the breakage and collapse of the crate
was solely due to the inherent defect and weakness of
the materials used in the fabrication of the crate. Hence,
carrier not liable. The crates were sealed, thus the
carrier could not have known that the crate was
defective.
- if the carrier accepts goods knowing the fact of
improper packing of the goods upon ordinary
observation or notwithstanding such condition, it is not
relieved of liability for loss or injury resulting therefrom.
- in Southern Lines Inc. v. CA. it was alleged that the
shortage in the shipment of the sacks of rice was due to
the shrinkage, leakage or spillage of the rice on account
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 TRANSPORTATION AND PUBLIC UTILITIES LAW

of bad condition of the sacks at the time it received the

same. The carrier was still made liable because it was
aware of the condition of the sacks when it received the
goods.

- the defense that the damage was dues to the way the
goods were packaged may fail if there is no proof that
the defect in the package was already existing at the
time the carrier accepted the same. The carrier must
receive the goods under protest; the acceptance with
reservation regarding such defect which must be duly
noted in the bill f lading. If accepted without reservation,
it can be inferred that there was no damage at the time
of acceptance of the cargo.

- carrier liable if the damage to the packaging which

resulted in the cargo’s unfitness for transport , was made
when the same was in the custody of the carrier.

ORDER OF PUBLIC AUTHORITY – may be used to

excuse only if the public authority who issued the order
is duly authorized to issue the order as provided in 1743.
Hence defense not available if 1) public authority has no
authority to issue the subject order, 2)) public authority
exceeded his authority.

Article 1743.if through the order of public authority the

goods are seized or destroyed, the common carrier is
not responsible, provided said authority had power to
issue the order.

Ganzon vs CA, the petitioner carrier was not excused

from liability because the SC did not consider the order
of an acting mayor as a valid order of public authority.

- carriage of the goods by Sea Act provides that neither

the carrier nor the ship shall be responsible for loss or
damage resulting from “arrest or restraint of princes,
rules, or people , or seizure under legal process” and
from “quarantine restrictions”.

CABRERA. DELOS SANTOS. BACAY. ESCASINAS. TEMANIL. MELGAR. UY. FRANCISCO. Page 16