Commercial Law Review

Transportation Laws
CONTRACT OF TRANSPORTATION – It is a contract whereby a certain person or association of persons obligate
themselves to transport persons, things, news, from one place to another for a fixed price

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.

Governing Laws:
1. New Civil Code
2. Code of Commerce
3. Special Laws

Parties to the Contract of Transportation:

1. Shipper - one who gives rise to the contract of transportation by agreeing to deliver the things or news to be
transported, or to present his own person or those of other or others in the case of transportation of passengers
2. Carrier/Conductor - one who binds himself to transport persons, things, or news, as the case may be, or one
employed in or engaged in the business of carrying goods for others for hire.

COMMON CARRIER PRIVATE CARRIER

person, corporation, firm, association engaged in the
business of carrying or transporting passengers, goods or
both, by land, water, air, for compensation, offering
services to the public;
must exercise extraordinary diligence
he holds himself out as engaged in public service to all
persons indefinitely.
Subject to state regulation
Parties may not agree on limiting the carrier’s liability
except when provided by law
Exempting circumstance- prove extraordinary diligence
Law on common carriers
is not engaged in the business of carrying for the public
requires only ordinary diligence.
carries only for persons with whom he has initial contract
and assumes no obligation to carry for the others
Not subject
Parties may limit carrier liability, provided is not contrary
to law, moral, or good customs
Exemting circumstance- Caso fortuito
Law on obligations and contracts

Requisites to be a Common Carrier

1. Engaged in business of carrying or transporting goods or passengers whether as principal or ancillary business and
whether on regular/scheduled or occasional basis.
2. Offers its services to the public whether to the general population or narrow segment of general population
3. For compensation or fixed price or rate
4. Control of operation or cargo
General Rule: The common carrier is presumed to have been at fault or to have acted negligently when the
goods transported are lost, destroyed or deteriorated, or when a passenger dies or is injured.
Exception: When the same is due to any of the following causes only: (Defenses available to common carrier)

1. Flood, storm, earthquake, lightning or other natural disaster or calamity.

Conditions to avail of defense:
a. natural disaster was the proximate & only cause
b. exercise of diligence to prevent or minimize loss
c. no delay (Art. 1740 New Civil Code [NCC])

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 2. Act of the public enemy in war, whether international or civil.
Conditions to avail of defense:
a. act was the proximate & only cause
b. exercise of diligence to prevent or minimize loss
c. no delay (Art. 1740, NCC)

3. Act or omission of the shipper or owner of the goods.

Note: There should be a protest when the defect due to the act or omission is visible.
Conditions to avail of defense:
a. if proximate cause, exempting
b. if contributory negligence, mitigating

4. The character of the goods or defects in the packing or in the containers.

Note: There should be a protest when the defect due to the act or omission is visible.
Conditions to avail of defense:
exercise of due diligence to forestall or prevent loss

5. Order or act of competent authority.

Conditions to avail of defense: with power to issue order

Requisites of fortuitous event

1. Independent of the human will (or atleast the obligor’s)
2. Unforeseen or unavoidable
3. Of such character as to ender it impossible for the obligor to comply with his obligation in a normal manner
4. Obligor- free from any participation or aggravation of the injury to the oblige (no negligence or imprudence)
5. Must be the only proximate cause.

Exception to the Exception:

1. When the natural disaster is not the proximate and only cause of the loss;
2. When the common carrier failed to exercise due diligence to prevent or minimize the loss before, during and after the
occurrence of the natural disaster; and
3. When the common carrier negligently incurs in delay in transporting the goods.

Expected degree of diligence- Extraordinary diligence

- That extreme measure of care and caution which persons of unusual prudence and circumspection use for
securing and preserving their own property or rights.
- Coverage:
o Vigilance over goods
o Safety of passengers

Degree of diligence required of common carriers

1. In transporting goods- extraordinary diliegence
2. In transporting passenger-Utmost diligence of a very cautious person
3. In preventing or stopping injuries to a passenger or strangers: diligence of a good father of a family

Perena v Zarate 29 August 2012

Ruling: The Perenas are considered a common carrier

1. The Perenas as operators of a school bus service were a. engaged in transporting passengers generally as a business
not just a casual occupation.
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2. Undertaking to carry passengers over established roads by the method by which the business was conducted and
3. Transporting students for a fee.
4. Despite catering to a limited clientele, the Perenas operated as a common carrier because they held themselves out
as ready transportation indiscriminately to the students at a particular school living within a near where they operated
the service and for a fee.
5. The Perenas were liable for the death of Aaron despite the fact that their driver might have acted beyond the scope of
his authority or even in violation of the orders of the common carrier.
6. The Perenas’ driver was entirely negligent when he traversed the railroad tracks at a point not allowed for a
motorist’s crossing despite being fully aware at the grave harm to be thereby caused to his passengers by overtaking the
bus on the left side as to leave himself blind to the approach of the oncoming train that he knew was on the opposite
side of the bus.
7. The indemnification for Aaron’s loss of earning capacity despite him having been unemployed, because compensation
of this nature is awarded not for loss of time or earnings but for loss of the deceased’s power or ability to earn money.
8. The basis for the computation of Aaron’s earning capacity was not what he would have become or what he would
have wanted to be if not for his untimely death, but the minimum wage in effect at the time of his death.

True Test of a Common Carrier

The true test of a common carrier is not the quantity or extent of the business actually transacted, or the
number and character of the conveyances used in the activity, but whether the undertaking is a part of the activity
engaged in the carrier that he has held out to the general public, as his business or occupation. If the undertaking is a
single transaction, not a part of the general business or occupation engaged as advertised and held out to the general
public, the individual or the entity rendering such service is a private, not a common carrier. The question must be
determined by the character of the business actually carried by the carrier, not by any secret intention or menta
lreservation it may entertain or assert when charged with the duties and obligations that the law imposes.

Defense of diligence in the supervision and selection of employees

Their defense of having observed the diligence of a good father of a family in the selection and supervision of
their driver was not legally sufficient. According to art 1759 of the civil code, their liability as a common carrier did not
cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of
their employee.
CULPA CONTRACTUAL CULPA AQUILIANA CULPA CRIMINAL
Foundation of liability contract General duty of care Criminal act
With pre-existing obligation No-pre existing obligation No pre-existing obligation
Negligence is presumed and Need to establish negligence Proof beyond reasonable doubt
merely incidental needed, accused is innocent
until proven guilty
Defense of goodfather of family proper Not proper
in selection and supervision of
employees not proper
Respondeat superior/ master- Liability of employer is vicarious Employee’s guilt is automatically
servant/ command responsibility or imputed the employee’s civil guilt if
employee is insolvent

Liability of employer is direct and

primary

Loss of earning capacity to a student is not unprecedented

This favorable treatment of the Zarates’ claim is not unprecedented. In Cariaga v Laguna Tayabas Bus Co., fourth
year medical treatment of Edgardo Carriaga’s earning capacity, although he survived the accident but his injuries
rendered him permanently incapacitated, was computed to be that the physician that he dreamed to become. The court

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considered his scholastic record sufficient to justify the assumption that he could have finished the medical course and
would have passed the medical board examinations in due time, and that he could have possibly earned a modest
income as a medical practitioner.
Also in People v Sanchez, the court opined that murder and rape victim Eileen Sarmienta and murder victim
Allan Gomez could have easily landed good paying jobs had they graduated in due time, and that their jobs would
probably pay them high monthly salaries from 10,000 to 15,000 upon their graduation. Their earning capacities were
computed at the rates higher than the minimum wage at the time of their deaths due to their being already senior
agriculture students at the University of the Philippines Los Banos, the country’s leading educational institution in
agriculture.

TNC and TNVS

1. The DOTC through Sec Jun Abay, issued department Order 2015-011-I which amended DO 97-1097, effectively
amending the classification of public transport conveyances. The 2015 D.O. provided nationwide regulations for app-
based transport services. The D.O. introduced as a new type of classification called Transportation Network Vehicle
Service that allows Transportation Network Companies such as UBER to conform within the present regulatory
framework.
2. Borrowing from the California Transportation Commission, TNC is defined by the D.O. as an “organization whether a
corporation, partnership, sole proprietor or other form that provides pre-arranged transportation services
compensation using an internet-based technology application or digital platform technology to connect passengers with
drivers using their personal vehicles.
3. To be clear, a TNC the entity in this case UBER, provides a platform for the transportation service. On the other hand,
the TNV refers to the vehicle owners who provide transportation services. Both the TNC and the TNVS provider need
separate registrations with the LTFRB.

TNVS
The concept of TNVS is envisioned to be an equivalent of the taxi industry, wherein TNC’s are the taxi operators
and the TNVS providers are the drivers. To streamline the operations of TNVS providers, the LTFRB issued two
memorandum setting forth the implementing guidelines on the acceptance of applications for a certificate of Public
Convenience to operate a transportation network vehicle service.
TNVS- Common carriers not the TNCS, potential uber applicants are given a choice being a partner-driver, wherein one
will drive his/her own registered car, or a partner-operator, where a car owner hires another person to drive.

Contract of Transportation/ Carriage

1. A contract whereby a person, natural or juridical, obligates to transport persons, goods, or both from one place to
another, by land, air, or water for a price or compensation
2. A contract of carriage or transportation is one whereby a certain person or association of persons obligate themselves
to transport persons, things, or both from one place to another for a fixed price. Such person or association are regarded
as carriers and are classified as private or special carriers and common or public carriers.
3. The movement of transportation is one whereby a certain person or association of persons obligate themselves to
transport persons, things, news, from one place to another for a fixed price.
4. It is the removal of goods or persons from one place to another.

Common Carriers (Art 1732 Civil Code)

1. 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.
Contracts of carriage are governed primarily by the civil code, them in a suppletory manner, by the provisions of the
Code of Commerce in Maritime Commerce, the COGSA (Carriage of Goods by Sea Act), and the Salvage law.
2. Under the Public Service Act CA no 146, Public Service is- It is an entity which owns, operates, manages, or controls in
the Philippines, for hire or compensation with General or Limited clientele, whether permanent, occasional or accidental
and done for general business, and done for a common carrier.

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3. If an entity enters into a contract to merely furnish vehicles (not to actually carry) , it is understandably neither a
private nor a common carrier.

Public nature
-It is for public use, which means that the use is not confined to privileged individuals, but instead open to an
indefinite public. It is indefinite or unrestricted quality that gives its public character. The true criterion by which to judge
the character of the use is whether the public may enjoy it by right or by permission. There must be in general a right
under the law which compels the owner to give the service for the general public.

Common Carrier: Jurisprudence

 A common carrier may be considered as such despite having a limited clientele.
 A vessel operates as a common carrier if it transports goods indiscriminately for all persons in the ordinary
course of business.
 Art 1732 makes no distinction between one whose principal business is the carrying of persons or goods or both,
and one who does the same only as an ancilliary activity or a sideline, or the business is regular or unscheduled,
or even if its activities are merely episodic, occasional, or even if unscheduled.
 A carrier is still a common carrier even if it has no publicly known route and terminals, with a limited clientele
and issues no tickets.
 A certificate of public convenience is not a requisite
 A customs broker is not a common carrier
 A company which transports petroleum products from a refinery to a terminal by means of a pipeline is a
common carrier because it is transporting goods, a common carrier is not limited to moving objects.
 An arrastre operator is a common carrier.- the operation of receiving, conveying, and loading, or unloading
merchandise on piers or wharves.
 Not common carriers:
o Travel agency
o Stevedoring- unloading and loading in vessels

Effects of being classified as common carriers

1. Observe the diligence expected of common carriers (extraordinary diligence)
2. Presumption of negligence- in the event of loss, damage, deterioration of goods, or in case of injury or death of
passengers.- Art 1735 ( In all cases other than those mentioned in 1734, if the goods are lost, destroyed, or deteriorated,
common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed
extraordinary diligence as required in article 1733)
Mere proof of delivery of the goods in good order to a common carrier and their arrival in bad order their destination
constitutes a prima facie case of fault or negligence against the carrier.
3. As a general rule, the duty of extraordinary diligence required of common carriers is not subject of a reduction to
another degree of diligence.
4. A stipulation exempting the common carrier from liability because of the carrier’s negligence or because of the
negligence of its employees, is void for being contrary to public policy.
5. Common carriers are subject to regulation as a public service entity.

Law of Destination- According to Article 1753, Civil Code, 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
- Does not apply if the goods were never transported.
- If the unpaid seller exercises his right of stoppage in transit, the new destination will be the country of the
seller.

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(Private) Special Carriers
1. One which, without being engaged in the business of carrying as a public employment undertaken to deliver goods or
passengers for compensation.

Test to determine whether a carrier is a common or private carrier

- It is generally obliged to carry all persons indifferently as long as they apply for passage, and as long as there
is room and no legal excuse for refusing.
- In case of a common carrier, the general public is given a right which the law compels the owner to give.
- The public enjoy it by right or by permission

Water Transportation
Ship or vessel: nature and concept
 Under the mercantile code, vessel refer solely and exclusively to merchant ships and to those which are engaged
in the navigation of passenger and freight from one port ot another.
 It includes every description of water craft, large or small, used or capable of being used as a means of
transportation in water.
 Any floating apparatus, craft, large or small, so long as it is not an accessory of another, is intended for ocean or
coast wide navigation, banca is considered a vessel
 Constitutes property which may be acquired and transferred by any of the means recognized by law. They shall
continue to be considered as personal property.

Common/ private Carrier in Maritime Law

- Where the charter is bareboat or demise, the vessel which is ordinarily a common carrier, becomes a private
carrier.

Charter Party- (planters products v CA 1993) A contract by which an entire ship or some principal part therof, is let by
the owner to another person fro a specified time or use.

Contract of Affreightment- Which the owner of a ship or other vessel lets the whole part of her to a merchant or other
person for the conveyance of goods, on a particular voyage, in consideration of the payment of freight.

GENERAL CATEGORIES OR KINDS OF CHARTER PARTY

1. Bareboat or demise charter – it involves the transfer of full possession and control of the vessel for the period
covered by then contract, the character obtaining the right to use the vessel and carry whatever cargo it chooses, while
maintaining and maintaining the vessel as well. Liable for damages: charterer (acts as a private carrier)
2. Time charter – it is a contract to use the vessel for a particular period of time, the character obtaining the right to
direct the movements of the vessel during the chartering period, although the owner retains possession. It is considered
a contract of affreightment. (acts as a common carrier)
3. Voyage charter – it is a contract for the hire of a vessel for one or a series of voyages usually for the purpose of
transporting goods for the charterer. The voyage charter is a contract of affreightment and is considered a private
carriage. In a contract of affreightment the ship owner is the one liable for damages. (acts as a common carrier)

Failure to collect freight charge- Where the common carrier accepted its passenger’s baggage for transportation, and
even had it placed in the vehicle by its own employee, its failure to collect the freight charge is the common carrier’s
own look out. It is responsible for the consequent loss of the baggage.

Commencement, Duration and Termination of the carrier’s responsibility over the goods.
1. Commencement- 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 the right to receive them.

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2. It remains in full force and effect even when they are temporarily unloaded or stored in transit unless the shipper or
owner has made use of the right of stoppage in transit.
3. It 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 reasonable opportunity thereafter
to remove them or otherwise dispose of them.

Doctrine of Limited Liability (Hypothecary Rule) or No ship- no liability rule

 Cases applicable
1. Art 587- civil liability for indemnities to third persons
2. Art 590- Indemnities from negligent acts of the captain not the shipowner or agent
3. Art 837- collusion
4. Art 643- liability for wages of captain and the crew and for advances made by the ship agent if the vessel is
lost by shipwreck or capture.

 General Rule: The liability of shipowner and ship agent is limited to the amount of interest in said vessel such as
that where the vessel is entirely lost, the obligation is extinguished.
 The interest extends to:
o Vessel itself
o Equipments
o Freightage
o Insurance proceeds

Person who can claim the limited liability rule

 The only person who could avail of the rule is the shipowner. He is the very person whom the rule has been
conceived to protect and charterers cannot invoke as a defense.
 Since the shipowner is the one who is supposed and encouraged to pursue maritime commerce, it would be
absurd to apply the limited liability rule against him who, in the first place should be the one benefitting from it.
 The charterer or sub charterer, whose rights cannot rise above that of the shipowner can never set up the rule
against the very owner of the vessel.

Clauses that may be included in a charter party

JASON CLAUSE PARAMOUNT CLAUSE
A stipulation in a charter party that in case of a maritime A clause in a charter party providing that the COGSA shall
accident for which the shipowner is not responsible by apply even though the transportation is domestic, subject
law, contract,or otherwise, the cargo shippers, consignees to the extent that any term of the bill of lading that is
or owners shall contribute with the shipowner in the repugnant to the COGSA or applicable law, then to the
general average. extent therof the provision of the bill of lading is void.

Collision and Allision

Collision- Impact of 2 vessels both of which are moving
Allision- Impact between a moving vessel and a stationary one

Zones of time in the collision of vessels

1. First Zone- All time up to the moment when risk of collusion begins (no rule is yet applicable for none is necessary
2. Second Zone- Time between moment when risk of collusion begins and moment it becomes a practical certainty. It is
the period where conduct of the vessels is primordial. It is in this case that vessels must strictly observe nautical rules
unless a departure therefrom becomes necessary to avoid imminent danger.
3. Third Zone- Time when collusion and time of impact. An error in this zone would no longer be legally consequential.

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Cases of collusion
1. Due to the fault, negligence or lack of skill of captain or sailing mate or the complement of the vessel. The ship
owner is liable for the losses and damages.
2. Due to fortuitous event or force majeure- each vessel and its cargo shall bear its own damages
3. It cannot be determined which of the 2 vessels caused the collusion- each vessel shall suffer its own damages and
both shall be solidarily liable for the losses and damages occasioned to their cargoes. (Inscrutable Fault)

Error in extremis
 Sudden movement made by a faultless vessel during the third zone of collusion with another vessel which is at
fault during the 2nd zone. Even if such sudden movement is wrong, no responsibility will fall in said faultless
vessel.
 Where a navigator, suddenly realizing that a collusion is imminent by no fault of its own, in confusion and
excitement of the moment, does something which contributes to the collision or omits to do something by
which the collision might be avoided, such act or omission is ordinarily considered to be in extremis and the
ordinary rules of strict accountability does not apply.

Passenger’s Baggages

Article 1734- In the case of baggage of passengers if they are in the personal custody of the passenger, then the
liability of the common carrier will be that of a bailee/depositary
In the custody of passengers (hand carried) In the custody of the common carrier (checked-in)
Legal nature- necessary deposit Considered as goods
Diligence of a depositary (ordinary diligence) Extraordinary diligence
Arts 1998 and 2000-2003 Arts 1733-1753

Responsibility of Hotel owners or innkeepers

1. Hotel owners or innkeepers are liable as depositaries of effects by travelers provided:
a. Notice was given to them
b. Travelers took precautions as advised
2. The liability applies whether caused by:
a. Servants or employees or hotel
b. Strangers unless done with use of arms through irresistible force, which is considered as force majure.
3. Not liable of loss is
1. Due to acts of guest, his family, servants, or visitors or
2. Due to the character of things brought into the hotel/inns

Passenger
Person who has entered into contract of carriage, express, implied, with the carrier. They are entitled to extraordinary
diligence from the common carrier.
- The following are considered passenger:
1. Newsboys allowed to peddle on a train or bus
2. Concessionaires boarded the wrong train or bus
3. One who has boarded the wrong train or bus
4. One who with the consent of the carrier’s employees rides in a dangerous or unusual place in the
vehicle, such as the roof of the running board.
5. One who, upon arriving at the place of destination is asleep but is not awaken by the carrier’s
employees.
6. Hitchhiker- if in a private car is not a passenger. If in public vehicle- a passenger.

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 The following are not considered passenger- entitled to ordinary diligence only
1. One who has not yet boarded any part of a vehicle regardless of whether or not he has purchased a
ticket.
2. One hwo remains on a carrier for an unreasonable length of time after he has been afforded every
safe opportunity to alight.
3. One who has boarded by fraud, stealth, or deceit.
4. One who attempts to board a moving vehicle, although he has a ticket, unless the attempt be with the
knowledge and consent of the carrier
5. Invited guests and accommodation passengers.
6. One who has boarded a wrong vehicle has been properly informed of such fact, and on alighting is
injured by the carrier.
7. One who rides any part of the vehicle which is unsuitable or dangerous or which he knows is not
designed or intended for passengers.

Accommodation passenger
1. The owner and driver of a vehicle owes to accommodation passengers or invited guests merely the duty to exercise
reasonable care so that they may be transported safely to their destination. Thus, the rule is established by weight of
authority that the owner or operator of an automobile owes the duty to an invited guest to exercise reasonable care in
its operation and not unreasonably to expose him to danger and injury by increasing the hazard of travel.
2. The owner of the vehicle in the case at bar is only required to observe ordinary care and is not in duty bound to
exercise extraordinary diligence as required by our law.
3. A passenger must observe the diligence of a father of a family to avoid injury to himself which means that if the injury
to the passenger has been proximately cause by his own negligence, the carrier cannot be held liable.

Rules on liability of common carriers on its passengers

1. In case of death or injuries to passengers, the presumption is that the common carrier is liable. In an action for breach
of contract of carriage, the aggrieved party does not have to prove that the common carrier was at fault or was
negligent. All that is necessary to prove its existence of the contract and the fact of its non-performance by the carrier.
2. The contributory negligence of the passenger does not take away the carrier’s responsibility although its liability is
mitigated by the passenger’s contributory negligence
3. The fact that the employee of the carrier acted beyond his authority or acted in violation of the instruction of the
common carrier, the latter’s responsibility does not cease. It is still liable for the death or injuries of passengers.
4. If the injury is suffered by the passenger because of the negligence or willful act of a fellow passenger, the carrier will
be liable only if through the exercise of the diligence of a good father of a family , the common carrier’s employees could
have prevented or stopped the same, otherwise it is not liable.

When is a contract of carriage perfected? When will it commence?

1. The contract is perfected even if the passenger has not yet paid, in fact, even if he has no money for his fare.
2. It is perfected even if the passenger has not yet boarded the vehicle completely.
3. The all important fact is that the passenger, with the express or implied consent of the carrier, placed a part of his
body or any part on any part of the vehicle- such as the stepping platform or the running board.
4. The best evidence of a contract of carriage is the ticket. But a contract of carriage is present even without a ticket.
5. A contract of carriage maybe oral.

Commencement of carrier’s responsibility

- The duty of a common carrier to provide safety to its passengers obligates it not only during the course of
the trip but for so long as the passengers are within its premises and where they ought to be in pursuance to
the contract of carriage.
- When a passenger steps on the platform of a bus, he is already deemed a passenger.

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Duration and termination of carrier’s responsibility
- It has been recognized as a rule that the relation of carrier and passenger does not cease at the moment the
passenger alights from the carrier’s vehicle at a place selected by the carrier at the point of destination. But
continues until the passenger has had a reasonable time or a reasonable opportunity to leave the carrier’s
premises. And what is a reasonable time or a reasonable delay within this rule is to be determined from the
circumstances.
- All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed
passengers and what is a reasonable time or reasonable delay within this rule is to be determined by all the
circumstances and includes a reasonable time to see after his baggage and prepare for is departure. The
carrier- passenger relationship is not terminated merely by the fact that the person transported has been
carried to his destination if for example, such person remains in the carrier’s premises to claim his baggage.

Carrier not an insurer against all risks

- The law does not make the common carrier an insurer of the absolute safety of its passengers.
- It is imperative for a party claiming against a common carrier to show that the injury or death to the
passenger arose from the negligence of the common carrier and or its employees in providing safe transport
to its passengers.
- Since the passenger’s death was caused by a co-passenger the applicable provisions is Art 1763 of the Civil
Code, which states that a common carrier is responsible for injuries suffered by a passenger on account of
the willful acts for negligence of other passengers or of strangers. If the common carrier’s employees
through the exercise of the diligence of a good father could have prevented or stopped the act or omission
notably for this obligation, the law provides a lesser degree of diligence.

Passenger’s duty to observe diligence to avoid injury, contributory negligence

1. Will only equitably reduce the amount of liability, it will not bar recovery of damages.
2. Where the proximate cause of the injury to the passenger was his own negligence the CC cannot be held liable.

Liability of the owner of a vehicle that collided with or bumped a common carrier resulting in death or injury of a
passenger.

Solidary- the driver as well as the owners of the vehicle are jointly and severally liable.
The driver not jointly and severally liable with the common carrier- The contract of carriage is between the carrier and
the passenger and in the event of contractual liability , the common carrier is exclusively responsible to the passenger,
even if such breach is due to the negligence of the driver.

Driver-owner liability
1. Whether the driver is authorized or not by the actual owner is irrelevant to determine the liability of the registered
owner who the law holds primarily and directly responsible for any accident, injury, or death caused by the operation of
the vehicle in the streets or highways. To require the driver of the vehicle to be authorized by the actual owner before
the registered owner can be held accountable is to defeat the very purpose why motor vehicle legislations are enacted
in the first place.
2. The registered owner of any vehicle, even if he had already sold it to someone else is primarily responsible to the
public for whatever damage or injury the vehicle may cause.
3. With respect to pubic and third persons, the registered owner of a motor vehicle is directly and primarily responsible
for the consequences of its operations regardless of who the actual vehicle owner might be.
4. The registered owner of any vehicle even if not used for public service , would be primarily liable to the public or to
third persons for injuries caused by the latter while the vehicle was being driven on the highway or streets.

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Leased and stolen vehicles
1. Leased- The registered owner is also liable even if the vehicle was leased to another person.
2. Stolen- 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 any person not employed by him.

Boundary system
The features which characterized the boundary system are not sufficient to withdraw the relationship between the
parties from that of employer and employee. The owner continues to be the operator of the vehicle in legal
contemplation and as such, he is responsible for the consequences incident to its operation. To exempt from liability the
owner of a public vehicle who operates it under the boundary system on the ground that he is a mere lessor would not
only to abet flagrant violations of the Public Service Law but also to place the riding public at the mercy of reckless and
irresponsible drivers.

Doctrine of Last Clear Chance

1. Doctrine of discovered peril, Doctrine of supervening negligence, humanitarian doctrine
2. A person who has the last clear chance or opportunity of avoiding an accident notwithstanding the negligent acts of
his opponent is considered in law solely responsible for the consequences of the accident.
3. It does not apply to the following:
a. Where the party charged is required to act instantaneously, and the injury cannot be avoided by the
application of all means at hand after the peril is or should have been discovered.
b. It does not apply where a passenger demands responsibility from the carrier to enforce its contractual
obligations.
c. It is inapplicable in a case of culpa contractual.
d. It does not apply to a case where a building collapses and causes damage to another.

Sudden Emergency rule

- An individual who suddenly finds himself in a situation of danger and is required to act without much time to
consider the best means that may be adopted to avoid the impending danger is not guilty of negligence if he
fails to undertake what subsequently and upon reflection may appear to be a better solution, unless the
emergency was brought by his own negligence.
- It is dictated not exclusively by the suddenness of the event which absolutely negates thoughtful care, but
by the overall nature of the circumstance.

Moral Damages and breach of Contract

 Generally, moral damages are not recoverable in an action predicated on a breach of contract because such an
action is not included in Art 2219 of the civil Code as one of the actions in which moral damages may be
recovered.
 Exceptions:
o Where the mishap results in the death of the passenger Art 1764 and 2206.
o Where the common carrier has been guilty of fraud or bad faith Art 2220 Civil Code.

Air Transportation
Commencement of Air Transportation
 When an airline issues a ticket to a passenger, confirmed for a particular flight on a certain date, a contract of
carriage arises. The passenger has every right to expect that he be transported on that flight and on that date
and it becomes the carrier’s obligation to carry him and his luggage safely to the agreed destination.

The Warsaw Convention

 It provides for rules applicable to international air transportation.
 It applies to all international air transportation of persons performed by aircraft for hire.

11 Angela B. Lumabas| SSCR-College of Law

  The WC has the force and effect of law in the Philippines being a treaty commitment assumed by the Philippine
government. However, the WC does not operate as an exclusive enumeration of the instances for declaring a
carrier liable for breach of contract of carriage or as an absolute limit of the extent of liability

International Air Transportation by Air 2 categories

1. Where the place of departure and the place of destination are situated within the territories of 2 high
contracting parties regardless of whether or not there be a break in the transportation or by transshipment.
2. Where the place of departure and the place of destination are within the territory of a high contracting party
if there be an agreed stopping place within a territory subject to the sovereignty mandate or authority of
another power, even though the power is not a party to the convention.

High Contracting Party- A signatory to the convention and which subsequently to it.

The place, an action for violation of a contract of international transportation by air may be brought.
 It must be at the option of the plaintiff in one of the territories of the high contracting party’s before:
o 1. Court of the domicile of the carrier
o 2. Court of the principal place of business
o 3. Court where it has a place of business through which the contract had been made
o 4. Court of the place of destination.
 Allegations of tortious conduct committed against an airline passenger during the course of international
carriage do not bring the case outside the ambit of the convention

Limit of liability (Art 32 as amended by the Guatemala Protocol 1971) – Alitalla v IAC
1. Passengers
GR: $100,000 per passenger
EX: Agreement to a higher limit
2. Checked-in luggage
GR: $20 per kg
EX: In case of special declaration of value and payment of a supplementary by consignee carrier is liable to not
more than the declared value unless it provides the sum is higher than actual value
3. Hand-carried baggage
$1,000 per passenger
4. Goods to be shipped
GR: $20 per kg
EX: In case of special declaration of value and payment of a supplementary by consignee carrier is liable to not
more than the declared value unless it provides the sum is higher than actual value

Prescriptive period in the Warsaw Convention

 The prescriptive period for the action is 2 years reckoned from the date of arrival at the destination or from
reckoned from the date of arrival at the destination or from the date on which the aircraft ought to have arrived
or from the date on which the transportation stopped. The method of calculating the period of prescriptionshall
be determined by the law of the court to which the case is submitted.
 In United airlines v Uy, the 2 year prescriptive period was not applied where the airline employed delaying
tactics.

12 Angela B. Lumabas| SSCR-College of Law

Overbooking and Denied Booking
1. Overbook per se is not prohibited. However, if the expense, consequence, inconvenience caused to the passenger
must be shouldered by the carrier.
2. The passenger must be given meals and accommodations and must be carried in the next available flight.
3. The passenger may also refund the value of the ticket plus liquidated damages of P 3,000 for domestic flights and P
5,000 for international flights.

COGSA: Carriage of Goods by Sea Act

Contracts covered by COGSA
1. Public Act no 521 of the 24th US Congress was accepted to made applicable to all contracts for the carriage of goods
by sea to and from the Philippine Ports in foreign trade by virtue of commonwealth Act no 65.
2. Sec 1 Title 1 of CA 65 defines the relevant terms of Carriage of goods. The term covers the period from the time the
goods are loaded to the time when they are discharged from the ship. Thus, it can be inferred that the period of time
when the goods have been discharged from the ship and given to the custody of the arrastre operator is not covered by
the COGSA.

Prescriptive period to file a claim for loss or damage

 The suit must be brought within 1 year after the delivery of goods or the date when the goods should have been
delivered.
o The filing or a notice of claim/loss is not a condition
o It is not interrupted or tolled by an extrajudicial demand.

 Prescriptive period may be extended by agreement

o Jurisprudence however, recognized the validity of an agreement between the carrier and the
shipper/consignee extending the 1 year period to file a claim.
 A stipulation reducing the 1 year prescriptive period is null and void.

When the prescriptive period not available

 Does not apply to conversions or misdeliveries
o In such cases the Civil Code provision on prescription will apply 10 years if there is a written contract or
a bill of lading. 6 years if contract is oral.
 The 1 year prescriptive period for filing an action for the loss or damage of goods may not be invoked by an
arrastre operator.
 Shipper v Insurer- Where the shipper or the consignee files the suit against the insurer for payment under the
insurance policy, the 1 year period does not apply but the 10n year period under the civil code because the suit
is not against the carrier arising from the contract of carriage.
 Insurer v Carrier- The suit is filed by an insurer under its subrogatory rights the 1 year period applies.

Rules on inter-island shipping

 Notice of claim/loss is essential, a condition precedent to judicial action
o To be filed immediately if damage is apparent.
o If not apparent, within 24 hours
 Prescriptive period to file judicial action
o 10 years from the accrual of the cause of action, from the denial of claim if there is a bill of lading or
written contract. 6 years in case of oral contract.
Inter-Island International
Applicability: Domestic, inter island, coastwide International, overseas, foreign (to and from the Philippine
transportation land, water, air transportation carriage of ports in foreign trade) Water/maritime transportation
goods
Notice of damage or loss: condition precedent- 24 hrs from Notice of claim or loss not a condition precedent. 3-day

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delivery for patent damage, shipper must file a claim
against the carrier immediately upon delivery (oral or
written)
Prescriptive period: not provided Civil code applies no bill
of lading- within 6 years, with bill of lading –within 10
years
period for declaring damage immediately for patent
damage.
1 year from the date of delivery or date when the vessel
left the port (delivered but damaged goods) or from the
date of delivery to the arrastre (non-delivery or loss)

Limit of liability

 COGSA- provides under section 4, subsection 5, that an amount recoverable in case of loss or damage shall not
exceed US $500 per package or per customary freight unless the nature and value of such goods have been
declared by the shipper before shipment and inserted in the bill of lading.

 The COGSA supplements the Civil Code by establishing provision limiting the carrier’s liability in the absence of a
shipper’s declaration of a higher value in the bill of lading.

14 Angela B. Lumabas| SSCR-College of Law