TRANSPORTATION LAW

November 21, 2012

COMMON CARRIERS
Art. 1732
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 services to the public.

NOTES:
Elements of Common Carrier:
1. Any person, corporations, firms or associations;
2. Such persons etc., must be engaged in the business of carrying or
transporting passengers or goods or both;
3. The means of carriage or transporting passengers, goods or both is by
LAND, WATER OR AIR;
4. The carrying or transporting of passengers or goods or both is for a fee or
compensation; and
5. The services is offered to the public without distinction.
Test for determining whether a party is a common carrier of goods is:
1. He must engaged in the business of carrying goods for others as a public
employment, and must hold himself out as ready engage in the
transportation of goods or person generally as a business and not as a
casual occupation;
2. He must undertake to carry goods of the kind to which his business is
confined;
3. He must undertake to carry by the method by which his business is
conducted and over his established roads; and
4. The transportation must be for hire.

 The concept of common carrier under Article 1732 may be seen to coincide
neatly with the notion of Public Service under the Public Service Act
(Commonwealth Act no. 1416) which at least partially supplements the law on
common carriage set forth in the Civil Code. Under Section13(b) of said Act,
public service includes:
Xxx every person that now or hereafter may own, operate, manage or
control in the Philippines, for hire or compensation with general or
limited clientele, whether permanent, occasional, or accidental, and
one ofr general business purposes, any common carrier xxx xxxx.
(De Guzman vs. CA, Dec. 12, 1988)

Common carrier holds himself out in common, that is to all persons who choose to
employ him as ready to carry for hire vs. Private Carrier agrees in some special
case with some private individual to carry for hire.
In Home Insurance Co. vs. American Steamship Agency, the Court adopted the
principle laid in American jurisprudence wherein a common carrier undertaking to
carry a special cargo or chartered to a special persons only, it becomes a private
carrier. Thus, the provisions in Civil Code on common carrier will not apply.
Thereby, as a private carrier a stipulation exempting the owner from liability for
the negligence of its agent is valid. Thus stipulation would be void only if the
strict public policy governing common carriers is applied. Such policy however
has no force where the public at large is not involve, as the ship is totally chartered
for the use of a single party.
JURISPRUDENCE:
CASE 1
First Philippine Industrial Corporation vs. Court of Appeals, December 29,
1998
Facts: In imposing tax on the petitioner, respondent City treasurer contends that
the pipelines are not included in the term common carrier which refers solely to
ordinary carriers such as trucks, trains, ships and the like. It further posit the term
common carrier under the said code pertains to the mode or manner by which a
product is deliver to its destination.

Held: A "common carrier" may be defined, broadly, as one who holds himself out
to the public as engaged in the business of transporting persons or property from
place to place, for compensation, offering his services to the public generally.
The test for determining whether a party is a common carrier of goods is:
1. He must be engaged in the business of carrying goods for others
as a public employment, and must hold himself out as ready to
engage in the transportation of goods for person generally as a
business and not as a casual occupation;
2. He must undertake to carry goods of the kind to which his
business is confined;
3. He must undertake to carry by the method by which his business
is conducted and over his established roads; and
4. The transportation must be for hire. 15
Based on the above definitions and requirements, there is no doubt that
petitioner is a common carrier. It is engaged in the business of transporting or
carrying goods, i.e. petroleum products, for hire as a public employment. It
undertakes to carry for all persons indifferently, that is, to all persons who choose
to employ its services, and transports the goods by land and for compensation. The
fact that petitioner has a limited clientele does not exclude it from the definition of
a common carrier
Xxx

Under the Petroleum Act of the Philippines (RA NO. 387) petitioner is a
common carrier.

Case 2

Vlasons Shipping, Inc. vs. CA (December 12, 1987)

Held: The true test of a common carrier is the carriage of passengers or

good, provided it has space, for all who opt to avail themselves of tis transportation
service for a fee. A carrier which does not qualify on said test is deemed a private carrier.
Xxx
In the case at bar, it is undisputed that VSI did not offer its services to the general
public. As found by the RT, it carried passengers or goods only for those it chose under a

special contract of charter party. As correctly ruled by the CA, petitioner was not a
common but a private carrier. Thus, the rights and obligations are determined primarily
by stipulations in their contract of private carriage or charter party.
Since petitioner was private carrier, the ship owners obligations are governed by
the provisions of the Code of Commerce. It has been held that the in an action against a
private carrier for loss of, or injury to, cargo, the burden is on the plaintiff to prove that
the carrier was negligent or unseaworthy, and the fact that the goods were lost or
damaged while in the carriers custody does not put the burden of proof on the carrier.

Case 3

Valenzuela Hardwood vs. CA, June 30, 1997

Facts: it is undisputed that the cause of the sinking of the vessel was due to the
snapping of the iron chains and the subsequent rolling of the logs to the portside due to
the negligence of the captain in stowing and securing the logs on board the vessel.
Undisputed also was the fact that the private respondent is a private carrier when it
contracted with the petitioner to transport its cargo.
ISSUE: Whether the stipulation in the charter party exempting the carrier from
liability for the loss of cargo due to negligence of vessels captain is valid?
Held: Yes. In a contract of private carriage, the parties may validly stipulate that
responsibility for the cargo rests solely on the charterer, exempting the ship owner from
liability for loss or damage to the cargo caused even by the negligence of the ship captain.
The stringent provisions of the Civil Code on common carriers cannot be applied to
private carrier, unless expressly stipulated by the parties in their charter party.

Art. 1733.
From the NATURE of their services and for reasons of PUBLIC
POLICY, common carriers are bound to observe EXTRAORDINARY
DILIGENCE in the vigilance of GOODS and for the SAFETY of passengers
transported by them according to all 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.

NOTES:
TWO TYPES OF EXTRAORDINARY DILIGENCE:
A. VIGILANCE ON GOODS
B. SAFETY OF PASSENGERS
Due diligence- is that which is require by the nature of the obligation and corresponds
with the circumstances of the persons, of the time and of the place.
Case 1

Loadstar Shipping vs. CA, September 28, 1999

Held: For a vessel to be seaworthy, it must be adequately equipped for the voyage and
manned with a sufficient number of competent officers and crew. The failure of a
common carrier to maintain in searthy conditions its vessel involved in a contract of
carriage is a clear breach of its duty prescribed in Article 1755 of the Civil Code.
Nor the doctrine of limited liability does not apply where there was negligence on
the part of the vessel owner or agent. Here, the loadstar was at fault or negligent in not
maintaining a seaworthy vessel and in having allowed its vessel to sail despite knowledge
of an approaching typhoon.
Case 2

The Philippine American Genral Insurance vs. CA, June 11, 1997

Held: It is settled that carrying A DECK cargo raises the presumption of unseaworthiness
unless it can be shown that the deck cargo will not interfere with the proper management
of the ship. However, in his case it was established that the vessel was not designed to
carry substantial amount of cargo ON DECK. The inordinate loading of cargo ON DECK
resulted in the decrease of the vessels metacentric height thus making it unstable.

I. PROVISIONS ON EXTRA DILIGENCE ON GOODS

A. 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.

B. 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, 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.

C. Article 1745. Any of the following or similar stipulations shall be considered

unreasonable, unjust and contrary to public policy:
5) That the common carrier shall not be responsible for the acts or
omission of his or its employees;
(6) That the common carrier's liability for acts committed by thieves, or of
robbers who do not act with grave or irresistible threat, violence or
force, is dispensed with or diminished;
(7) That the common carrier is not responsible for the loss, destruction, or
deterioration of goods on account of the defective condition of the car,
vehicle, ship, airplane or other equipment used in the contract of carriage.
II. PROVISIONS ONF EXTRAORDINARY DILIGENCE ON SAFETY OF
PASSENGERS:
A. Article 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
circumstanes.
B. Article 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.

VIGILANCE OVER GOODS

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.
NOTES:
The foregoing list is a closed list which means that the if the circumstances do not
fall within the list even they would constitute force majeure, the carrier is presumed
negligent in case of loss, destruction or deterioration.

Requisites for Natural Disaster or Calamity:

1. It must the proximate cause;
Proximate cause is defined as that which, in the natural and continuous
sequence, unbroken by any efficient, intervening cause, produces the injury,
and without which the result would not have occurred.
2. It must have been the only cause of the loss.
3. Common carrier has exercised extraordinary diligence to prevent or minimize
BEFORE, DURING AND AFTER the natural disaster
4. Common carrier has not incurred delay or negligent in transporting goods.
Article 1740. If the common carrier negligently incurs in
delay in transporting the goods, a natural disaster shall not
free such carrier from responsibility.

Requisites for act of public enemy:

1. Such act must be the proximate cause
2. Only cause
3. CC exercised extra diligence BEFORE, DURING and AFTER the said act.
Requisites for acts or omission of shipper:

1. The act or omission of the shipper of owner of good must be the proximate
cause.
2. And it must be the only cause.
Relevant provision: Article 1741. If the shipper or owner merely
contributed to the loss, destruction or deterioration of the goods, the
proximate cause thereof being the negligence of the common carrier, the
latter shall be liable in damages, which however, shall be equitably
reduced.
Define:
Contributory negligence is the failure of a
person who has been exposed to injury by the fault or
negligence of another, to use such degree of care for his
safety and protection as ordinarily prudent men would use
under the circumstances.

Requisites for character of goods or fault in packing or containers:

1. The loss, destruction or deterioration of goods was caused by the character of
goods, or the faulty nature of packing or containers
2. CC had exercised due diligence to forestall or lessen the loss
Relevant provisions: 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.

Requisites for the act of Public Authority:

1. The act of public authority must be the proximate or sole cause
2. The public authority had power to issue the order.
Relevant provision: Article 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.
CASE 1
Ganzon vs. Court of Appeal, May 30, 1988

Facts: Galacio contracted services of Ganzon to haul 305 tons of scrap iron
from Bataan to Manila. Per agreement, delivered the scrap iron to the captain for
laoding. When about half of scrap iron was loaded, Mayor Jose of Bataan
demanded P5,000.00 from Gelacio but the latter refused to give the amount. The
Mayor drew his gun and shot Gelacio resulting his injuries and was treated.
When the loading resumed, acting mayor with three policemen ordered the
captain to dump the scrap iron.
Issue: whether or not the dumping of the scrap iron into the sea that was
ordered by the local government official a fortuitous event.
Held: the intervention of the municipal official was not of a character that
would render impossible the fulfillment by the carrier of its obligation. The
petitioner was not duty bound to obye the illegal order to dump into the sea the
scrap iron. Moreover, absence of sufficient proof that the issuance of same order
was attended with such force or intimidation as to completely overpower the will
of petitioners employees.

COMMON PROVISIONS ON LOSS, DESTRUCTION AND DETERIORATION OF

GOODS
Article 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.

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, 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.
NOTES:
Case 1

Coastwise Lighterage Corporation vs. CA, June 12, 1995

Held: When the charter party entered into was a contract of affreightment
where the possession, command and navigation of the vessels remained with the
shipower or its agent then the contract of affreightment did not covert the Coastwise
inot a private carrier.
The law and jurisprudence on common carriers both hold that the mere
proof of delivery of goods in good order to carrier and the subsequent arrival of the
same goods at the place of destination in bad order makes for a prima facie case
against 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.
NOTES:
A provision in the bill of lading exempting the common carrier from liability or
damage once the goods were placed at the possession of the customs or authorities is
valid, not being contrary to law, public policy or morals. (Lu Do and Yu Ym corp. vs.
Binamira, April 22, 1957)

The validity of stipulations in bills of lading exempting the carrier from liability
for loss or damage to the goods when the same are not in its actual custody has been
upheld by the Supreme Court in the case of Phoenix Assurance Co., vs. United States
Lines, 22 SCRA 674
CASE 1

Macam vs. CA, August 25, 1999

Held: the extraordinary responsibility of the common carriers lasts until
actual or constructive delivery of the cargoes to the consignee or to the person who has a
right to receive them. Although the cargoes were not delivered to the consignee, it
appears however that in the export invoices, GPC was clearly names as buyer/importer.
This premise draws the Court to conclude that the delivery of the cargoes to GPC as

buyer/importer which, comformably with Article 1736 had, other than the consignee, the
right to receive them was proper.

Case 2

Samar Minig vs. Lloyd, October 23, 1984

Held: The validity of stipulations in bills of lading exempting the carrier
from liability for loss or damage to the goods when the same are not in its actual custody
has been upheld by the Court in Phoenix Assurance Co, Ltd vs. United States Lines 22
scra 674.
In Sales, actual delivery has been defined as the ceding of corporeal
possession by the seller, and the actual apprehension of corporeal possession by the buyer
or by person authorized by him to receive the goods as his representative for the purpose
of custody or disposal.

Article 1737.
The common carrier's duty to observe extraordinary diligence over the goods
remains in full force and effect even when they are temporarily unloaded or stored
in transit, unless the shipper or owner has made use of the right of stoppage in
transitu.
NOTES:
RELEVANT PROVISIONS ON THE RIGHT OF STOPPAGE IN
TRANSITU:

Article 1530. Subject to the provisions of this Title, when the buyer of
goods is or becomes insolvent, the unpaid seller who has parted with the
possession of the goods has the right of stopping them in transitu, that is to
say, he may resume possession of the goods at any time while they are in
transit, and he will then become entitled to the same rights in regard to the
goods as he would have had if he had never parted with the possession. (n)
Article 1531. Goods are in transit within the meaning of the preceding
article:

(1) From the time when they are delivered to a carrier by land,
water, or air, or other bailee for the purpose of transmission to the
buyer, until the buyer, or his agent in that behalf, takes delivery of
them from such carrier or other bailee;
(2) If the goods are rejected by the buyer, and the carrier or other
bailee continues in possession of them, even if the seller has refused
to receive them back.
Goods are no longer in transit within the meaning of the preceding
article:
(1) If the buyer, or his agent in that behalf, obtains delivery of the
goods before their arrival at the appointed destination;
(2) If, after the arrival of the goods at the appointed destination, the
carrier or other bailee acknowledges to the buyer or his agent that
he holds the goods on his behalf and continues in possession of them
as bailee for the buyer or his agent; and it is immaterial that further
destination for the goods may have been indicated by the buyer;
(3) If the carrier or other bailee wrongfully refuses to deliver the
goods to the buyer or his agent in that behalf.
XXX
XXX

Article 1532. The unpaid seller may exercise his right of stoppage in
transitu either by obtaining actual possession of the goods or by
giving notice of his claim to the carrier or other bailee in whose
possession the goods are. Such notice may be given either to the
person in actual possession of the goods or to his principal. In the
latter case the notice, to be effectual, must be given at such time and
under such circumstances that the principal, by the exercise of
reasonable diligence, may prevent a delivery to the buyer.
The duty of the Cc to exercised extraordinary diligence ceases when the shipper
exercises his right of stoppage in transit because by that time the Cc will transmute
it to an ordinary bailee or warehouseman upon the theory that the that the exercise

of such right terminates the contract of carriage. (Rosenthal vs. Weir, 170 N.Y.
148)

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 reasonable opportunity thereafter to remove
them or otherwise dispose of them.
NOTES:
CASE 1

International Harvester Co. vs. Aragon, 84 Phil 63

Admiralty has jurisdiction over all maritime contracts, in whatever

form, wherever they were executed or are to be performed, but not over
non-maritime contracts, (2 Corpus Juris Secundum, p. 84.) Whether or not a
contract is maritime depends not on the place where the contract is made
and is to be executed, making the locality the test, but on the subject-matter
of the contract, making the true criterion a maritime service or a maritime
transaction. (Id., p. 85.) Specifically, admiralty has jurisdiction of a
proceeding in rem or in personam for the breach of a contract of
affreightment, whether evidenced by a bill of lading or a charter party. (Id.,
pp. 90-91.) And typical of a controversy over contracts of affreightment is a
suit of one party against the other for loss of or damage to the cargo. (1
American Jurisprudence, p. 567.) This is the very case now before us,
because the respondent Yaras and Company seeks to recover from the
petitioner International Harvester Company of the Philippines the value of a
certain lost cargo.
CASE 2

Elite Shirt Factory Inc. vs. Cornejo, L-26718, Oct. 31, 1969

Does the exclusive jurisdiction conferred on a court of first instance

over admiralty and maritime cases include the suit where the shipper files a
claim against the carrier, the goods having been landed, stored in its bodega

but subsequently burned, no delivery having been made to the consignee as

a result?
The Court held that the decisive consideration is that the admiralty
jurisdiction as decided by us in a leading case, International Harvester Co.
v. Aragon,5 extends over all maritime contracts in whatever form entered
into, whether executed or still to be performed. As long as the subject
matter thereof is maritime service or a maritime transaction, then it is
embraced within such a concept. When, as in this case, the proceeding in
effect is one for a breach of a contract of shipment, the jurisdiction of the
court of first instance under the specific provision of the Judiciary Act is
undeniable.
CASE 3

Servando vs. Phil. Steam Navigation, October 23, 1982

Held: Absence of delay or negligence, the common carrier is not
liable for loss or destruction of goods placed/deposited in the
warehouse of the Bureau of Customs

The legal relationship between an arrastre operator and the consignee is akin to
that of warehouseman and depositor (Northern Motors vs. Prince Line Feb. 29,
1960). Both as to the nature of the functions and place of their performance, an
arrastree operators services are clearly not maritime; they are no different from
those of a depositary or warehouseman. (Delgaldo Brothers, vs. Home Insurance
Co. March 27, 1961)

Article 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.

NOTES:
Case 1

Eastern Shipping Lines vs. IAC 150 SCRA 464

Held: The Court ruled that fire may not be considered as natural
disaster or calamity. This must be so as it arises almost invariably from
some act of man or by human means. It does not fall within the category of
an act of God unless caused by lighting or by other natural disaster or
calamity. It may even be caused by the actual fault or privity of the carrier.
Even if fire were to be considered a natural disaster within the
meaning of Article 1734 of the Civil Code that the natural disaster must
have been the proximate and only cause of the loss, and that the carrier
has exercised due diligence to prevent or minimize the loss before , during
and after the occurrence of the disaster.

LIMITATIONS OF COMMON CARRIERS LIABILITY IN CASE OF

LOSS, DESTRUCTION OR DETERIORATION
Article 1744.
A stipulation between the common carrier and the shipper or owner limiting
the liability of the former for the loss, destruction, or deterioration of the goods to a
degree less than extraordinary diligence shall be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the service rendered by
the common carrier; and
(3) Reasonable, just and not contrary to public policy.
NOTES:
Factors to be considered: Article 1751. The fact that the common carrier
has no competitor along the line or route, or a part thereof, to which the contract

refers shall be taken into consideration on the question of whether or not a

stipulation limiting the common carrier's liability is reasonable, just and in
consonance with public policy.
Additional limitation: Article 1748. An agreement limiting the common
carrier's liability for delay on account of strikes or riots is valid.
Exception to Article 1744: Article 1747. If the common carrier, without
just cause, delays the transportation of the goods or changes the stipulated or
usual route, the contract limiting the common carrier's liability cannot be availed
of in case of the loss, destruction, or deterioration of the goods.
Article 1746. An agreement limiting the common carrier's liability may be
annulled by the shipper or owner if the common carrier refused to carry
the goods unless the former agreed to such stipulation.

Freight tickets or bus receipts for cargo are bills of lading. (Interprovincial Autobus vs.
Collector Internal Revenue)

Article 1745.
Any of the following or similar stipulations shall be considered unreasonable,
unjust and contrary to public policy:
(1) That the goods are transported at the risk of the owner or shipper;
(2) That the common carrier will not be liable for any loss, destruction, or
deterioration of the goods;
(3) That the common carrier need not observe any diligence in the custody of
the goods;
(4) That the common carrier shall exercise a degree of diligence less than that
of a good father of a family, or of a man of ordinary prudence in the vigilance
over the movables transported;
(5) That the common carrier shall not be responsible for the acts or omission
of his or its employees;

(6) That the common carrier's liability for acts committed by thieves, or of
robbers who do not act with grave or irresistible threat, violence or force, is
dispensed with or diminished;
(7) That the common carrier is not responsible for the loss, destruction, or
deterioration of goods on account of the defective condition of the car, vehicle,
ship, airplane or other equipment used in the contract of carriage.

Article 1749. A stipulation that the common carrier's liability is limited to the value of
the goods appearing in the bill of lading, unless the shipper or owner declares a greater
value, is binding.
Phoenix Assurance Co. vs. Macondray and co., Inc., May 13, 1975:
Stipulation limiting the carriers liability printed in the smallest type at the
back of the bill of lading for loss or damage to $500 per package unless the
shipper in writing declares the nature of the goods and a higher valuation and pays
additional freightage on the basis of such higher valuation is held to be valid and
binding although the bill is not signed by the shipper or consignee of goods.

Article 1750. A contract fixing the sum that may be recovered. by the owner or shipper
for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and just
under the circumstances, and has been fairly and freely agreed upon.
Shewaram vs. PAL G.R. No. L-20099, July 7, 1966
It is clear from the above-quoted portions of the decision of
the trial court that said court had found that the suitcase of the
appellee was tampered, and the transistor radio and the camera
contained therein were lost, and that the loss of those articles was
due to the negligence of the employees of the appellant. The
evidence shows that the transistor radio cost P197.00 and the camera
cost P176.00, so the total value of the two articles was P373.00.
xxxx
It is, however, contended by the appellant that its liability
should be limited to the amount stated in the conditions of carriage
printed at the back of the plane ticket stub which was issued to the
appellee, which conditions are embodied in Domestic Tariff

Regulations No. 2 which was filed with the Civil Aeronautics Board.
One of those conditions, which is pertinent to the issue raised by the
appellant in this case provides as follows:
The liability, if any, for loss or damage to checked
baggage or for delay in the delivery thereof is limited to its
value and, unless the passenger declares in advance a higher
valuation and pay an additional charge therefor, the value
shall be conclusively deemed not to exceed P100.00 for each
ticket.
xxx
In accordance with the above-quoted provision of Article
1750 of the New Civil Code, the pecuniary liability of a common
carrier may, by contract, be limited to a fixed amount. It is required,
however, that the contract must be "reasonable and just under the
circumstances and has been fairly and freely agreed upon."
xxx
The requirements provided in Article 1750 of the New Civil
Code must be complied with before a common carrier can claim a
limitation of its pecuniary liability in case of loss, destruction or
deterioration of the goods it has undertaken to transport. In the case
before us We believe that the requirements of said article have not
been met. It cannot be said that the appellee had actually entered
into a contract with the appellant, embodying the conditions as
printed at the back of the ticket stub that was issued by the
appellant to the appellee. The fact that those conditions are printed
at the back of the ticket stub in letters so small that they are hard to
read would not warrant the presumption that the appellee was aware
of those conditions such that he had "fairly and freely agreed" to
those conditions.

SAFETY OF PASSENGERS
Article 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.

La Mallorca vs. Court of Appeals (July 27, 1966)

Under the facts as found by the Court of Appeals, we have to
sustain the judgement holding petitioner liable for damages for the death of
the child, Raquel Beltran. It may be pointed out that although it is true that
respondent Mariano Beltran, his wife, and their children (including the
deceased child) had alighted from the bus at a place designated for
disembarking or unloading of passengers, it was also established that the
father had to return to the vehicle (which was still at a stop) to get one of
his bags or bayong that was left under one of the seats of the bus. There can
be no controversy that as far as the father is concerned, when he returned to
the bus for hisbayong which was not unloaded, the relation of passenger
and carrier between him and the petitioner remained subsisting. For, the
relation of carrier and passenger does not necessarily cease where the latter,
after alighting from the car, aids the carrier's servant or employee in
removing his baggage from the car.1
The issue to be determined here is whether as to the child, who was
already led by the father to a place about 5 meters away from the bus, the
liability of the carrier for her safety under the contract of carriage also
persisted.
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 all the circumstances. Thus, a person who, after
alighting from a train, walks along the station platform is considered
still a passenger. So also, where a passenger has alighted at his destination
and is proceeding by the usual way to leave the company's premises, but
before actually doing so is halted by the report that his brother, a fellow
passenger, has been shot, and he in good faith and without intent of
engaging in the difficulty, returns to relieve his brother, he is deemed
reasonably and necessarily delayed and thus continues to be a passenger
entitled as such to the protection of the railroad and company and its agents.

In the present case, the father returned to the bus to get one of his
baggages which was not unloaded when they alighted from the bus. Raquel,
the child that she was, must have followed the father. However, although
the father was still on the running board of the bus awaiting for the
conductor to hand him the bag or bayong, the bus started to run, so that
even he (the father) had to jump down from the moving vehicle. It was at
this instance that the child, who must be near the bus, was run over and
killed. In the circumstances, it cannot be claimed that the carrier's agent had
exercised the "utmost diligence" of a "very cautions person" required by
Article 1755 of the Civil Code to be observed by a common carrier in the
discharge of its obligation to transport safely its passengers. In the first
place, the driver, although stopping the bus, nevertheless did not put off the
engine. Secondly, he started to run the bus even before the bus conductor
gave him the signal to go and while the latter was still unloading part of the
baggages of the passengers Mariano Beltran and family. The presence of
said passengers near the bus was not unreasonable and they are,
therefore, to be considered still as passengers of the carrier, entitled to
the protection under their contract of carriage.

When the cause of the accident or death was due to the defect
(breakage of the crossjoint) of the motor vehicle, the common carrier is
liable since the said defect is not a caso fortuito. The rationale of the
carriers liability is the fact that the passenger has neither the choice nor
control over the carrier in the selection and use of the equipment and
appliances in use by the carrier. (Necesito vs. paras 104 Phil 75)

PAL vs. Court of Appeals July 31, 1981

The duty to exercise the utmost diligence on the part of the
common carriers is for the safety of the passengers as well as for the
members of the crew of complement operating the carrier, the airplnane in
the case at bar. This must be sofr any omission, lapse or neglect therof will
certainly result to the damage, prejudice, nay injuries and even death to all
aboard the plane, passengers and crew members alike.

Article 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.

Principles governing the liability of the common carrier as to passengers

1. The liability of a carrier is contractual and arises upon breach of its
obligation and there is breach if it fails to exercise extraordinary
diligence according to all circumstances of each case;
2. A carrier is obliged to carry its passengers with the utmost diligence of
very cautious persons, having due regard for all the circumstances;
3. A carrier is presumed to be at fault or to have acted negligently in case
of death, or injury to passengers, it being its duty to prove that it
exercised extraordinary diligence
4. The carrier is not an insurer against all risks of travel
5. The carrier is not responsible for events which could not be foreseen, or
which, though foreseen, are inevitable.

Fortuitous Event: Ampang vs. Guinoo Transportation L5044, April 30,

1953
When the defendant bus which carried the passengers
capsized after being bumped on the left side by another bus which
caused the defendants driver to swerve his bus to the left so as to
prevent it from falling into the canal and striking a tree, a maneuver
which led the bus to skid and capsize. The Court was of the opinion
that this is an instance of fortuitous event where it resulted from
extraordinary circumstances of being struck by the other bus,
independent from the will of, and unforeseen by the defendants
driver.

Estrada vs. Consolacion, June 29,1976: What is extraordinary

diligence and requirements for fortuitous event.

Under the contract of carriage, private respondents assumed

the express ansport the wife of petitioner to her destination safely
and to observe extra ordinary diligence with due regard for all the
circumstances, and that any injury suffered by her in the course
thereof, is immediately attributable to the negligence of the
carrier. 14 To overcome such presumption, it must be shown that the
carrier had observed the required extraordinary diligence, 15 which
means that the carrier must show the "utmost diligence of very
cautious persons * * * as far as human care and foresight can
provide", 16 or that the accident was caused by a fortuitous event.
In order to constitute a caso fortuito that would exempt a
person from responsibility, it is necessary that (1) the event must be
independent of the human will; (2) the occurrence must render it
impossible for the obligor to fulfill his obligation in a normal
manner; and (3) the obligor must be free of a concurrent or
contributory fault or negligence.

When the cause of the accident was the blowing-up of the tire coupled with
the fact that the jeepney was overloaded at that time and was running at a high
speed resulting to injuries to passenger, the carrier is held liable the case not being
fall under the caso fortuitous event.(Roberto Juntilla vs. Fontanar May 31, 1985)

VILLANUEVA VDA. BATACAN VS. MEDINA, Oct. 22, 1957: The

Proximate Cause was the negligent of the carriers driver
At 2 oclock in the morning while the bus of the defendant
was running at full speed, one of the front tires burst and the vehicle zigzagged until it fell into a canal and turned turtle. When one of the rescuers
who had a torch at that time approached the bus to extend help the bus
started to fire-up originated from the gasoline leaked from within and
ultimate burned down resulting to the death of the four passengers.
Is the carrier liable?

Held: Yes. The proximate cause of the of the death of the

passengers in question was the over-turning of the bus, this for the
reason that when the vehicle turned completely on its back, the
leaking of gasoline from the tank was not unnatural or unexpected;
that the coming othe men with the lighted torch was in response to
the call for help.

Article 1757. The responsibility of a common carrier for the safety of passengers
as required in articles 1733 and 1755 cannot be dispensed with or lessened by
stipulation, by the posting of notices, by statements on tickets, or otherwise.

Article 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.

Article 1759. Common carriers are liable for the death of or injuries to passengers
through the negligence or wilful acts of the former's employees, although such
employees may have acted beyond the scope of their authority or in violation of the
orders of the common carriers.
This liability of the common carriers does not cease upon proof that they exercised all the
diligence of a good father of a family in the selection and supervision of their employees.

Note: In case of collisions of two vehicles , the common carrier may avail
the defense that it exercises diligence of a good father of the family or in the
selection and supervisions of his employees WITH RESPECT TO THE
DAMAGE CAUSED TO THE AUTOMOBILE, but not to the injuries and death
of its passenger.

Relevant law: Article 1763. A common carrier is responsible for injuries

suffered by a passenger on account of the wilful acts or negligence of other
passengers or of strangers, if the common carrier's employees through the
exercise of the diligence of a good father of a family could have prevented or
stopped the act or omission.

Article 1760. The common carrier's responsibility prescribed in the preceding article
cannot be eliminated or limited by stipulation, by the posting of notices, by
statements on the tickets or otherwise.

DUTY OF CARE OF PASSENGERS

Article 1761. The passenger must observe the diligence of a good father of a family to
avoid injury to himself.
IF THE PROXIMATE CAUSE OF THE ACCIDENT IS THE NEGLIGENCE OF
THE PASSENGER, THEN THE CARRIER IS NOT LIABLE. (Lara et al., vs. Valencia,
June 30, 1958)

Article 1762. The contributory negligence of the passenger does not bar recovery of
damages for his death or injuries, if the proximate cause thereof is the negligence of the
common carrier, but the amount of damages shall be equitably reduced.

COMMON PROVISIONS
Article 1764. Damages in cases comprised in this Section shall be awarded in accordance
with Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the
death of a passenger caused by the breach of contract by a common carrier.
Article 1765. The Public Service Commission may, on its own motion or on petition of
any interested party, after due hearing, cancel the certificate of public convenience

granted to any common carrier that repeatedly fails to comply with his or its duty to
observe extraordinary diligence as prescribed in this Section.
Article 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.