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1732 NCC- “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.” Complementary to the codal definition is Sec. 13, par.(b) of the Public Service Act (CA. 146, as amended) it defines “public service” to be--- “ x x x 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 done for general business purposes, and done for common carrier, railroad, street railway, subway motor vehicle, either for freight or passenger, or steamship line, ferries and transportation, engaged in transportation of passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice refrigeration plant, canal irrigation system, gas, electric light, heat and power, water supply, and power petroleum, sewerage system, wire and wireless communication systems, wire or wireless broadcasting stations and other similar public services.” The concept of common carrier under Art. 1732 may be seen to coincide neatly with the notion of ‘public service’, under the Commonwealth Act No. 146, as amended, which at least partially supplements the law on common carriers provided for in the New Civil Code ( Philippine American General Insurance Company vs. PKS Shipping Co., G.R. No. 149038, 401 SCRA 222). Meaning of a Common Carrier 1. Questions in the bar examinations requiring the determination of whether or not a carrier is common or private have consistently followed the fact pattern in De Guzman vs. CA, 168 SCRA 612, a case decided on December 22, 1968. Here, the respondent is a junk dealer, engaged in the business of buying and selling bottles and scrap metal in Pangasinan. Upon gathering sufficient quantities
of junk, he would bring the materials to Manila for resale using 2 6-wheeler trucks. On the return trip, he would load his vehicles with cargo of certain merchants to Pangasinan and would charge freight rates lower than the normal commercial rates. In one of those return trips, petitioner, De Guzman, contracted the respondent to deliver from Makati to Urdaneta, Pangasinan two truckloads of milk. Only one truk reached its destination. The other truck was hijacked somewhere in Paniqui, Tarlac. Petitioner now wants to hold respondent liable as a common carrier. The latter contends that it cannot be liable as a common carrier because the transporting of goods on the return trip is not his usual occupation but a mere casual activity and a mere sideline to his junk dealership and that it had no certificate of public convenience normally granted by law to common carriers. Is respondent a common carrier? Yes, respondent is a common carrier. 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 ancillary activity or a sideline. The law does not likewise require that to be a common carrier, a person or enterprise should conduct its business in a regular or scheduled basis. A carrier may be “common” even if its activities are merely episodic, occasional or even if unscheduled. Neither does Art. 1732 distinguish between a carrier offering its services to the general public, the general community or population and one who offers services or solicits business only from a narrow segment of the general population. Also, a certificate of public convenience is not a requisite for an enterprise to be a common carrier. (De Guzman vs. CA, 168 SCRA 612, December 22, 1968).A common carrier may be considered as such despite its having a limited clientele ( Phil. American General Insurance Co., vs. PKS Shipping Co., G.R. No. 149038, 401 SCRA 222) The defense that a carrier cannot be considered common because it has no publicly known route and terminals, with a limited clientele and issues no tickets is unavailing. The principal business of petitioner is that of lighterage and drayage and that it offers its barges for the transporting of goods by water for compensation even if done on an irregular rather than scheduled manner and with only limited clientele. A common carrier need not have fixed publicly known routes. Neither does it
have to maintain terminals or issue tickets. ( Asia Lighterage and Shipping co., vs. CA. G.R. No. 147246, 409 SCRA 340). 2. A corporation which is a grantee of pipeline concession to install operate pipelines and through such pipes is engaged in the business of transporting and carrying petroleum products for persons who want to employ its services for compensation is a common carrier even if it has a limited clientele. The term “common carrier” does not only include entities using trains, trucks, ships and the like. The definition of the term “common carrier” under Art.1732 makes no distinction as to the means of transporting, as long as it is by land, water or air. ( First Philippine Industrial Corporation vs. CA, G.R. No. 125948, 300 SCRA 611). 3. A customs broker whose principal function is to prepare the correct customs declaration and proper shipping documents as required by the law is a common carrier. It suffices that it undertakes to deliver the goods for pecuniary consideration (A.F. Sanchez Brokerage Inc. vs. CA, G.R. No. 147079, 447 SCRA 427). There is a greater reason for holding a person who is a customs broker to be a common carrier because the transportation of goods is an integral part of business (Calvo vs. UCPB General Insurance Co., Inc., 379 SCRA 510) 4. A travel agency engaged in the business of arranging, facilitating, cooking, ticketing and accommodations of travelers is neither a private nor a common carrier. It does not undertake to transport people from one place to another, its covenant with its customers being to make travel arrangements for its customers which services include procuring tickets and facilitating travel permits or visas as well as booking customers for tours. Although one’s ticket was bought through the efforts of the travel agency is merely an agent of the airline with whom the customer ultimately contracted for carriage. The contract between the travel agency and the traveler is an ordinary contract of services and not one of carriage (Crisostomo vs. CA, G.R. No. 138334, 409 SCRA 528).
Test of a Common Carrier Generally, the true test of a common carrier is the carriage of passengers or goods, providing services to those who opt to avail themselves of its transportation services for a fee. If the carrier renders and offers its services exclusively for a particular person or entity and to on other, the carrier is not a common carrier. (FGU Insurance Corp. vs. G.P. Sarmiento Trucking Corp.,386 SCRA 312). In other words, we have to consider whether or not the given undertaking is part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business transacted (Asia Lighterage and Shipping, Inc., vs. CA, G.R. No. 147246 409 SCRA 340). Specifically, the tests whether a party is a common carrier of goods are: (a) He must be engaged in the business of carrying goods for others as a public employment, and must hold himself out as ready to engage in the transportation of goods for persons generally as a business and not as a causal occupation; He must undertake to carry goods of the kind to which his business is confined; He must undertake to carry by the method by which his business is conducted and over his established roads; and The transportation must be for hire (First Philippine Industrial Corporation vs. CA, 300 SCRA 611).
(b) (c) (d)
Effects of Being a Common Carrier The degree of diligence required for common carriers is “extraordinary diligence" in vigilance over goods and for the safety of its passengers (Art. 1733, NCC). Extraordinary diligence is that extreme measure of care and caution which persons of unusual prudence and circumspection use for securing and preserving their own property and rights (Republic of the Philippines vs. Lorenzo Shipping Corporation, G.R. 153536, 450 SCRA 550). This rule does not apply to a private carrier. In the absence of a stipulation or a legal provision, the private
carrier is deemed to observe only an ordinary diligence or the diligence of a good father of a family. (Art. 1173, NCC). In case of loss, damage or deterioration of the goods or in case of injury or death to passengers, the carrier is presumed to have been at fault or to have acted negligently (Arts. 1735 and 1756, NCC). A private carrier is not burdened by this presumption. However, the presumption of fault or negligence, may be overturned by competent evidence showing that the common carrier has observed extraordinary diligence over the goods (Republic of the Philippines vs. Lorenzo Shipping Corporation, G.R. 153563, 450 SCRA 550). 3. The duty of extraordinary diligence of a common carrier, as a rule, is not subject to a reduction to another degree of diligence. Exception: If the agreement to observe a degree of diligence less that extraordinary diligence is (a) in writing signed by the shipper or owner of the goods; (b) supported by a valuable consideration other than the service rendered; and (c) the stipulation is reasonable, just and not contrary to public policy. No reduction of diligence is allowed with respect to passengers under Art.1757 of the NCC. Under this provision, the responsibility of the carrier for the safety of the passengers cannot be lessened by stipulation, by posting of notices, or by statements in tickets. The exception is when the passenger is carried gratuitously. Here a stipulation limiting the common carrier’s liability for negligence is valid, but not for willful acts of gross negligence (Art. 1758, NCC). This stipulation is not allowed when the passenger is carried at a reduced fare. Reduction in fare does not justify any limitation of the common carrier’s liability. 4. In common carriers, a stipulation, exempting the common carrier from liability because of the carrier’s negligence or because of the negligence of its employees is void as being contrary to public policy. However, in case of private carriers, there could be a valid stipulation exempting the carrier from its negligence or from the negligence of its agents.
5. A common carrier is subject to regulation as a public service entity. A private carrier is not regulated as such. NOTE: Based on past bar examinations, when the carrier is a land or air transportation it is easy to determine when a common carrier becomes private. Take Victory Liner, a common carrier as an example. One of its buses is hired for an excursion. If there is complete control as to its trip when to go and where to go, it is like a private carrier. Hence the rules governing common carriers will not apply. The diligence will not be extraordinary and no presumption of negligence will apply. A stipulation exempting the carrier from its negligence or the negligence of its employees will be held valid.
When does a ship which is a common carrier become a private carrier? The old cases do not give us a definite criterion. The doctrine laid down in Home Insurance Co. vs. American Steamship Agencies, Inc., 23 SCRA 24, does not however, give us a clear standard when a common carrier becomes a private carrier. It simply says that when a “common carrier undertakes to carry a special cargo for a special person it becomes a private carrier.” Subsequent cases however, have made this question easier to resolve. Later cases have held that the mere chartering of a ship or maritime vessel does not make it automatically a private carrier because one has to still make a distinction between two kinds of charter parties. This distinction was made in Planters Products, Inc. vs. CA, 226 SCRA 476. It was held that a charter party agreement is of two types: 1. Contract of affreightment which involves the use of shipping space; and, 2. Bareboat or demise charter where the whole ship is chartered and the charterer has control of the ship and the crew who are considered his servants. When the charter is bareboat, the charterer is deemed to be the owner of the vessel in the meantime. On the other hand, there are two kinds of contract of affreightment: the charter and voyage charter. Here the control of the ship is still with the ship owner and the master and the crews are his employees. In a contract of affreightment the carrier is still a common carrier. CRITERION: CONTROL OF VESSEL AND CREW.
Duties Of Common Carriers
1. A common carrier is bound to carry passengers safely as far as human care and foresight can provide using the utmost diligence of very cautious persons with due regard to all circumstances.(Art. 1755, NCC).Such duty of a common carrier to provide safety to its passengers obligates it not only during the course of the trip but for as long as the passengers are within premises and where they ought to be in the pursuance to the contract of carriage (Light Rail Transit Authority vs. Natividad, G.R. No. 145804, 397 SCRA 75). If a passenger reaches his destination but he had to stay in the premises of the carrier to claim his luggage and while waiting, he was hit by a crane of the carrier, the latter is liable because the deceased is still deemed to be a passenger. (Aboitiz Shipping vs. CA, 179 SCRA 75). When a passenger steps on the platform of a bus, he is already deemed a passenger. The acceleration by the bus driver just as the deceased stepped on the platform causing him to fall and die is clearly the carrier’s liability. It is the duty of the carrier to stop their conveyances for a reasonable length of time to afford a passenger an opportunity to board and alight. When a public utility bus stops, it is in effect making an offer for the public to ride. Hence, when that bus is not in motion. There is no need for a prospective passenger to signal his intention to board. (Dangwa Transportation Co. vs. CA, 202 SCRA 575). When the victim entered the LRT station after having purchased a “token” and he fell from the platform while waiting for the train and was struck by a train which was coming at the exact time he fell, the victim should be treated as passenger. His standing on the platform while waiting for the train was where he was supposed to be (LRTA vs. Natividad, G.R. No. 145804, 397 SCRA 75). Passengers who remain within the premises of the carrier to retrieve their baggage and stay therein for a reasonable time for the purpose are treated as passengers injuries or death occasioned by the carrier at that point in time, are liabilities of the carrier under the contract of carriage (La Mallorca vs. CA, 17 SCRA 739).In a similar vein, a passenger who had disembarked from a vessel and returned after an hour to retrieve a baggage which he left unintentionally and died when hit by the crane used by a stevedoring company
is still a passenger because he ws there for a purpose and considering that it was the practice of the carrier to offload goods and cargo an hour after arrival (Aboitiz Shipping Corp. vs. CA, 179 SCRA 95). 2. The extraordinary responsibility of the common carrier lasts form 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 consecutively, by the carrier to the consignee,or to the person who has a right to receive them. 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 transitu. It continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place of the 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 (Arts. 1736-1738, NCC). The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding the damage to, or destruction of, the goods entrusted to it for safe carriage and delivery. It requires common carriers to render service with the greatest skill and foresight and to use all reasonable means to ascertain the nature and characteristic of goods tendered for shipment and to exercise due care in the handling and stowage, including such methods as their nature requires. (Sulpicio Lines, Inc. vs. First Lepanto-Taisho Insurance Corporation, G.R. 140349 June 29, 2005). For example, if the carrier is equipped with the proper knowledge of the nature of steel sheets in coils and of the proper way of transporting them, the master of the vessel and his crew should have undertaken precautionary measures to avoid possible deterioration of the cargo. (Belgian Overseas Chartering and Shipping N.V. vs. Philippine First Insurance Co., Inc 383 SCRA 23).