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CONTRACT OF TRANSPORTATION/ indifferently and thus is liable for refusal

CARRIAGE without sufficient reason (Lastimoso vs.
A contract whereby a person, natural or Doliente, October 20, 1961);
juridical, obligates to transport persons, 2. Cannot lawfully decline to accept a
goods, or both, from one place to another, by particular class of goods for carriage to
land, air or water, for a price or compensation. the prejudice of the traffic in these
Classifications: goods;
1. Common or Private 3. No monopoly is favored (Batangas Trans.
2. Goods or Passengers vs. Orlanes, 52 PHIL 455);
3. For a fee (for hire) or Gratuitous 4. Provides public convenience.
4. Land, Water/maritime, or Air
5. Domestic/inter-island/coastwise or PRIVATE CARRIER
International/foreign One which, without being engaged in the
It is a relationship which is imbued with the business of carrying as a public employment,
public interest. undertakes to deliver goods or passengers for
compensation. (Home Insurance Co. vs.
COMMON CARRIER American Steamship Agency, 23 SCRA 24)
Persons, corporations, firms or associations
engaged in the business of carrying or TESTS WHETHER CARRIER IS COMMON
transporting passengers or goods or both, by OR PRIVATE:
land, water, or air, for compensation, offering The SC in First Philippine Industrial
their services to the public (Art. 1732, Civil Corporation vs. CA (1995) reiterated the
Code). following tests:
Art. 1732 of the New Civil Code avoids any 1. It must be engaged in the business of
distinction between one whose principal carrying goods for others as a public
business activity is the carrying of persons or employment and must hold itself out as
goods or both and one who does such ready to engage in the transportation of
carrying only as an ancillary activity (sideline). goods generally as a business and not
It also avoids a distinction between a person as a casual occupation;
or enterprise offering transportation service 2. It must undertake to carry goods of the
on a regular or scheduled basis and one kind to which its business in confined;
offering such service on an occasional, 3. It must undertake to carry by the
episodic or unscheduled basis. method by which his business is
Neither does the law distinguish between a conducted and over its established
carrier offering its services to the general roads; and
public that is the general community or 4. The transportation must be for hire.
population and one who offers services or In National Steel Corp. vs. CA (1997) the SC
solicits business only from a narrow segment held that the true test of a common carrier is
of the general population. the carriage of goods or passengers provided
A person or entity is a common carrier it has space for all who opt to avail
even if he did not secure a Certificate of Public themselves of its transportation for a fee.
Convenience (De Guzman vs. CA, 168 SCRA
It makes no distinction as to the means of COMMON PRIVATE
transporting, as long as it is by land, water or CARRIER CARRIER
air. It does not provide that the transportation 1. As to availability
should be by motor vehicle. (First Philippine Holds himself Contracts with
Industrial Corporation vs. CA) out for all particular
One is a common carrier even if he has no people individuals or
fixed and publicly known route, maintains no indiscriminately groups only
terminals, and issues no tickets (Asia 2. As to required diligence
Lighterage Shipping, Inc. vs. CA). Extraordinary Ordinary
Characteristics: diligence is diligence is
1. Undertakes to carry for all people required required
3. As to regulation reasons of public policy (Art. 1733)
Subject to State Not subject to 2. Relationship of trust
regulation State 3. Business is impressed with a special
regulation public duty
4. Stipulation limiting liability 4. Possession of the goods
Parties may not Parties may 5. Preciousness of human life
agree on limit the A common carrier is not an absolute insurer
limiting the carriers of all risks of travel.
carriers liability liability,
except when provided it is COVERAGE
provided by law not contrary to 1. Vigilance over goods (Arts. 1734-1754); and
law, morals or 2. Safety of passengers (Arts. 1755-1763).
good customs
5. Exempting circumstance PASSENGER
Prove caso fortuito, A person who has entered into a contract of
extraordinary Art. 1174 NCC carriage, express or implied, with the carrier.
diligence and They are entitled to extraordinary diligence
Art. 1733, NCC from the common carrier.
6.Presumption of negligence The following are not considered
passengers, and are entitled to ordinary
There is a No
diligence only:
presumption of presumption of
a. One who has not yet boarded any part
fault or fault or
of a vehicle regardless of whether or
negligence negligence
not he has purchased a ticket;
7.Governing law
b. One who remains on a carrier for an
Law on Law on unreasonable length of time after he
common obligations and has been afforded every safe
carriers contracts opportunity to alight;
c. One who has boarded by fraud, stealth,
A. Domestic/inter-island/coastwise d. One who attempts to board a moving
Applicable to Land, Water, and Air vehicle, although he has a ticket, unless
transportation the attempt be with the knowledge and
1. Civil Code - primary consent of the carrier;
2. Code of Commerce (Arts. 349, 379, e. One who has boarded a wrong vehicle,
573-734, 580, 806-845) - suppletory has been properly informed of such
fact, and on alighting, is injured by the
B. International/foreign/overseas carrier;
(Foreign country to Philippines) f. Invited guests and accommodation
Applicable to Water/maritime and Air passengers. (Lara vs. Valencia)
transportation g. One who rides any part of the vehicle
The law of the country of destination which is unsuitable or dangerous or
generally applies. which he knows is not designed or
1. Civil Code - primary intended for passengers.
2. Code of Commerce - suppletory
3. Others - suppletory DEFENSES OF A COMMON CARRIER IN
a. Water/maritime: Carriage of Goods THE CARRIAGE OF GOODS
b. Air: Warsaw Convention Requisites:
a. Must be the proximate and only cause of
I. NEW CIVIL CODE the loss
(Arts. 1732-1766) b. Exercise of due diligence to prevent or
minimize the loss before, during or after the
REQUIREMENT OF EXTRAORDINARY occurrence of the disaster (Art. 1739)
DILIGENCE c. Carrier has not negligently incurred in
Rendition of service with the greatest skill delay in transporting the goods (Art. 1740)
and utmost foresight. (Davao Stevedore Co. v. Fire is not considered a natural disaster or
Fernandez) calamity as it arises almost invariably from
Rationale: some act of man. (Eastern Shipping Lines Inc.
1. From the nature of the business and for vs. IAC)
Mechanical defects are not force majeure if the common carrier will be held liable.
the same was discoverable by regular and (Ganzon v. CA 161 SCRA 646)
adequate inspections. (Notes and Cases on Diligence in the selection and supervision
the Law on Transportation and Public Utilities, of employees under Article 2180 of the Civil
Aquino, T. & Hernando, R.P. 2004 ed. p.120- Code cannot be interposed as a defense by
122) the common carrier because the liability of
the carriers arises from the breach of the
2. ACTS OF PUBLIC ENEMY contract of carriage. The defense under said
Requisites: articles is applicable to negligence in quasi-
a. Must be the proximate and only cause of delicts under Art. 2176. (Del Prado v. Manila
the loss Electric Co., 52 Phil 900)
b. Exercise of due diligence to prevent or
minimize the loss before, during or after LIABILITY OF A COMMON CARRIER FOR
the act causing the loss, deterioration or DEATH OR INJURIES TO PASSENGERS DUE
destruction of the goods (Art. 1739) TO ACTS OF ITS EMPLOYEES AND OTHER
a. Sole and proximate cause: absolute FOR ACTS OF
b. Contributory: partial defense. (Art. ITS PASSENGERS
4. CHARACTER OF THE GOODS OR DEFECTS IN Required diligence and defense
Even if the damage should be caused by diligence diligence
the inherent defect/character of the goods, Nature of liability
the common carrier must exercise due Tort; however, Not absolute;
diligence to forestall or lessen the loss. (Art. The employee limited by Art.
1742) must be on 1763
The carrier which, knowing the fact of duty at the
improper packing of the goods upon ordinary time of the act.
observation, still accepts the goods (Maranan v.
notwithstanding such condition, is not relieved Perez)
of liability or loss or injury resulting therefrom.
(Southern Lines, Inc. v. CA, 4 SCRA 258) The carrier is liable when its personnel
allowed a passenger to drive the vehicle
5. ORDER OR ACT OF PUBLIC AUTHORITY causing it to collide with another vehicle
Said public authority must have the power resulting to the injuries suffered by the other
to issue the order (Art. 1743). Consequently, passengers. (MRR vs. Ballesteros, 16 SCRA
where the officer acts without legal process, 641)

1. Common carrier 1. Common carrier
2. Shipper 2. Passenger
3. Consignee
Cause of liability
Delay in delivery, loss, destruction, Death or injury to the passengers
or deterioration of the goods
Duration of liability

From the time the goods are The duty of a common carrier to
unconditionally placed in the provide safety to its passengers
possession of, and received by theso obligates it not only during the
carrier for transportation until the
course of the trip, but for so long
same are delivered actually or as the passengers are within its
constructively by the carrier to the
premises and where they ought to
consignee or to the person who be in pursuance to the contract of
has the right to receive them. (Art.
carriage. (LRTA v. Navidad,
1736) [2003])
It remains in full force and effect
All persons who remain on the
even when they are temporarily premises within a reasonable time
unloaded or stored in transit after leaving the conveyance are
unless the shipper or owner has to be deemed passengers, and
made use of the right of stoppage what is a reasonable time or a
in transitu. (Art. 1737) reasonable delay within this rule
It continues to be operative is to be determined from all the
even during the time the goods arecircumstances, and includes a
stored in a warehouse of the reasonable time to see after his
carrier at the place of destination
baggage and prepare for his
until the consignee has bee departure. (La Mallorca v. CA, 17
advised of the arrival of the goods
SCRA 739 ; Abiotiz Shipping
and has had reasonable
Corporation v. CA, 179 SCRA 95)
opportunity thereafter to remove It is the duty of common
them or otherwise dispose of carriers of passengers to stop
them. (Art. 1738) their conveyances a reasonable
Delivery of goods to the custom length of time in order to afford
authorities is not delivery to thepassengers an opportunity to
consignee. (Lu Do v. Binamira, 101enter, and they are liable for
Phil 120) injuries suffered from the sudden
starting up or jerking of their
conveyances while doing so. The
duty which the carrier of
passengers owes to its patrons
extends to persons boarding the
cars as well as to those alighting
therefrom (Dangwa Trans Co., Inc.
vs. CA 202 SCRA 574).
Presumption of negligence

Art.1735 Civil Code Art.1755 Civil Code

Reason: As to when and how goods Reason: The contract between the
were damaged in transit is a passenger and the carrier
matter peculiarly within the imposes on the latter the duty to
knowledge of the carrier and its transport the passenger safely;
employees. (Mirasol v. Dollar, 53 hence the burden of explaining
PHIL 124) should fall on the carrier.
Mere proof of delivery of goods
to a carrier in good order 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.
(Coastwise Lighterage Corp. v. CA,
245 SCRA 796)

1. Ordinary circumstance: 1. Exercise of extraordinary

Exercise of extraordinary diligence (Art. 1756)
diligence (Art. 1735) 2. Caso fortuito
2. Special circumstances:
a. Flood, storm,
earthquake, lighting, or
other natural disaster or
calamity (plus force
b. Act of the public enemy
in war, whether
international or civil
c. Act or omission of the
shipper or the owner of
d. The character of the
goods or defects in the
packing or in the
e. Order or act of
competent public
authority (Art. 1734)
Valid stipulations

1. Reduction of degree of diligence Stipulation limiting liability when a

to ordinary diligence, provided it passenger is carried gratuitously,
be: but not for willful acts or gross
a) In writing, signed by the negligence. (Art. 1758)
shipper or owner;
b) Supported by a valuable
consideration other than the
service rendered by the
carriers; and
c) Reasonable, just and not
contrary to public policy.
(Art. 1744)
2. Fixed amount of liability: A
contract fixing the sum to be
recovered by the owner or shipper
for the loss, destruction or
deterioration of the goods, if it is
reasonable and just under the
circumstances and has been fairly
and freely agreed upon. (Art.
3. Limited liability for delay: An
agreement limiting the common
carriers liability for delay on
account of strikes or riots (Art.
4. Stipulation limiting liability to
the value of the goods appearing
in the bill of lading, unless the
shipper or owner declares a
greater value. (Art. 1749)

The diligence required in the

carriage of the goods may be
reduced by only one degree, from
extraordinary to ordinary diligence
or diligence of a good father of a
family. (Art. 1744, Art. 1745, no. 4)

Void stipulations

1. That the goods are transported at Dispensing with or lessening the

the risk of the owner or shipper; extraordinary responsibility of a
2. That carrier will not be liable for common carrier for the safety of
any loss, destruction or passengers imposed by law by
deterioration of the goods; stipulation, by posting of notices,
3. That the carrier need not observe by statements on tickets or
any diligence in the custody of the otherwise. (Art. 1757)
4. That the carrier shall exercise a
degree of diligence less than that
of a good father of a family over
the movable transported;
5. That the carrier shall not be
responsible for the acts or
omissions of his or its employees;
6. That the carriers liability for acts
committed by thieves or robbers
who do not act with grave or
irresistible threat, violence or
force is dispensed with or
7. That the carrier is not responsible
for the loss, destruction or
deterioration of the goods on
account of the defective condition
of the car, vehicle, ship or other
equipment used in the contract of
carriage. (Art. 1745)
Legal nature of the baggage
Necessary Considered as
deposit goods
Required diligence by the
common carrier
Diligence of a Extraordinary
depositary diligence
Applicable rules
Arts. 1998 and Arts. 1733-
2000-2003 1753


1. Culpa contractual (breach of contract)
Only the carrier is primarily liable and not the driver, because there is no privity between the
driver and the passenger.
Basis: Art.1759, NCC.
No defense of due diligence in the selection and supervision of employees.

2. Culpa aquiliana (quasi-delict)

The carrier and driver are solidarily liable as joint tortfeasors.
Basis: Art. 2180, NCC.
Defense of due diligence in the selection and supervision of employees is available. Exception:
maritime tort resulting in collision. (See notes on Collision)

3. Culpa criminal (criminal negligence)

The driver is primarily liable. The carrier is subsidiarily liable only if the driver is convicted and
declared insolvent.
Basis: Art. 100, RPC.

In case of injury to a passenger due to the negligence of the driver of the bus on which he is
riding and of the driver of another vehicle, the drivers as well as the owners of the two vehicles
are jointly and severally liable for damages. It makes no difference that the liability of the bus
driver and owner springs from contract while that of the owner and driver of the other vehicle
arises from quasi-delict. (Fabre vs. CA)


1. One 1. One limiting
exempting the the liability of
carrier from any the carrier to
and all liability an agreed
for loss or valuation,
damage unless the
occasioned by shipper
its own declares a
negligence. higher value
2. An and pays a
unqualified higher rate of
limitation of freight
liability to an (H.E. Heacock
agreed Company vs.
valuation. Macondray &
Company Inc.)

However, the carrier cannot limit its liability for injury to, or loss of, goods shipped where such
injury or loss was caused by its own negligence.
(Shewaram vs. PAL, 17 SCRA 606)


1. In case of flight diversion due to bad weather or other circumstances beyond the pilots
control, the relation between the carrier and the passenger continues until the latter has been
landed at the port of destination and has left the carriers premises. The carrier should
necessarily exercise extraordinary diligence in safeguarding the comfort, convenience and safety
of its stranded passengers until they have reached their final destination. (Philippine Airlines vs.
CA, 226 SCRA 423)
2. Even where overbooking of passengers is allowed as a commercial practice, the airline
company would still be guilty of bad faith and still be liable for damages if it did not properly
inform passenger that it could breach the contract of carriage even if they were confirmed
passengers. (Zalamea vs. CA, 228 SCRA 23)
3. An open-dated ticket constitutes a complete contract between the carrier and passenger.
Hence, the airline company is liable if it refused to confirm a passengers flight reservation.
(Singson vs. CA, 282 SCRA 149)
4. An airline company which issued a confirmed ticket to a passenger covering successive trips
on different airlines can be held liable for damages occasioned by bumping off by one of the
successive airlines. (Lufthansa German Airlines vs. CA, 238 SCRA 290)
5. An airline ticket providing that carriage by successive air carriers is to be regarded as a single
operation is to make the issuing carrier liable for the tortuous conduct of the other carrier. A
printed provision in the ticket limiting liability only to its own conduct is not enough to rebut that
liability. (KLM Royal Dutch Airlines vs. CA, 65 SCRA 237)


(Arts. 349-379)

1. Domestic land and water/maritime transportation. (Pandect of Commercial Law and
Jurisprudence, Justice Jose Vitug, 1997 ed.)
2. Domestic Air Transportation. (Commercial Law Review, Cesar Villanueva, 2004 ed.)

1. Bill of lading
2. Obligations of the carrier
3. Right of abandonment
4. Notice of damage
5. Combined carrier agreement

The written acknowledgment of receipt of goods and agreement to transport them to a
specific place to a person named or to his order.
1. It is not indispensable for the creation of a contract of carriage. (Compania Maritima vs.
Insurance Company of North America, 12 SCRA 213)

2. Ambiguity is construed against the carrier, the contract being one of adhesion.

3. The consignee, although the instrument is oftentimes drawn up only by the consignor and
carrier, becomes bound by all the stipulations contained therein by making a claim for loss on
the basis of said bill of lading. (Sea-Land Services Inc. vs. IAC)

4. The right of a party to recover for loss of shipment consigned to him under a bill of lading
drawn up only by and between the shipper and the carrier, springs from either a relation of
agency between him and the shipper, or his status as stranger in whose favor some stipulation is
made in said contract, and who becomes a party thereto when he demands fulfillment of that
stipulation. (Art. 1311 (2), (Mendoza vs. PAL Inc.)

5. Acceptance of the bill of lading without dissent raises the presumption that all the terms
therein where brought to the knowledge of the shipper and agreed to by him and, in the absence
of fraud or mistake; he is estopped from thereafter denying that he assented to such terms.
(Notes and Cases on the Law on Transportation and Public Utilities, Aquino, T. & Hernando, R.P.
2004 ed. p.261)

1. On board - issued when the goods have been actually placed aboard the ship with very
reasonable expectation that the shipment is as good as on its way.
2. Received - one in which it is stated that the goods have been received for shipment with or
without specifying the vessel by which the goods are to be shipped.
3. Negotiable - one in which it is stated that the goods referred to therein will be delivered to
the bearer or to the order of any person named therein.
4. Non-negotiable - One in which it is stated that the goods referred to therein will be delivered
to a specified person.
5. Clean One which does not indicate any defect in the goods.
6. Foul One which contains a notation thereon indicating that the goods covered by it are in
bad condition.

7. Spent One which covers goods that already have been delivered by the carrier without a
surrender of a signed copy of the bill.
8. Through One issued by the carrier who is obliged to use the facilities of other carriers as
well as his own facilities for the purpose of transporting the goods from the city of the seller
to the city of the buyer, which bill of lading is honored by the second and other interested
carriers who do not issue their own bills.
9. Custody One wherein the goods are already received by the carrier but the vessel
indicated therein has not yet arrived in the port.
10.Port One which is issued by the carrier to whom the goods have been delivered, and the
vessel indicated in the bill of lading by which the goods are to be shipped is already in the
port where the goods are held for shipment.
1. Best evidence of the existence of the contract of carriage of cargo (Art. 353)
2. Document of title
3. Receipt of cargo
4. Contract to transport and deliver goods as stipulated
5. Symbol of the goods


A. Duty to accept the goods
GENERAL RULE: A common carrier cannot ordinarily refuse to carry a particular class of goods.
EXCEPTION: For some sufficient reason the discrimination against the traffic in such goods is
reasonable and necessary. (Fisher vs. Yangco Steamship Co. 31 Phil 1).
Instances when the carrier may validly refuse to accept the goods include the ff:
1.) Goods sought to be transported are dangerous objects, or substances including dynamite and
other explosives
2.) Goods are unfit for transportation
3.) Acceptance would result in overloading
4.) Contrabands or illegal goods
5.) Goods are injurious to health
6.) Goods will be exposed to untoward danger like flood, capture by enemies and the like
7.) Goods like livestock will be exposed to disease
8.) Strike
9.) Failure to tender goods on time. (Notes and Cases on the Law on Transportation and Public
Utilities, Aquino, T. & Hernando, R.P. 2004 ed. p.68)
In case of carriage by railway, the carrier is exempted from liability if carriage is insisted upon
by the shipper, provided its objections are stated in the bill of lading.
However, when a common carrier accepts cargo for shipment for valuable consideration, it
takes the risk of delivering it in good condition as when it was loaded. (PAL vs. CA)

B. Duty to deliver the goods

Not only to transport the goods safely but to the person indicated in the bill of lading. The
goods should be delivered to the consignee or any other person to whom the bill of lading was
validly transferred or negotiated.

Time of delivery
Stipulated in No
Contract/Bill stipulation
of Lading
1. Carrier is 1. Within a
bound to fulfill reasonable
the contract time.
and is liable for 2. Carrier is
any delay; no bound to
matter from forward them
what cause it in the 1st
may have shipment of
arisen. the same or
similar goods
which he may
make to the
point of
delivery. (ART.
358 Code of

Effects of delay
a. Merely suspends and generally does not terminate the contract of carriage
b. Carrier remains duty bound to exercise extraordinary diligence
c. Natural disaster shall not free the carrier from responsibility (Art.1740)
d. If delay is without just cause, the contract limiting the common carriers liability cannot be
availed of in case of loss or deterioration of the goods (Art.1747)


1. Partial non-delivery, where the goods are useless without the others (Art. 363);
2. Goods are rendered useless for sale or consumption for the purposes for which they are properly
destined (Art. 365); and
3. In case of delay through the fault of the carrier (Art. 371).


Requisites for applicability:
1. Domestic/inter-island/coastwise transportation
2. Land/water/air transportation
3. Carriage of goods
4. Goods shipped are damaged
a. Patent damage: shipper must file a claim against the carrier immediately upon delivery (it may
be oral or written)
b. Latent damage: shipper should file a claim against the carrier within 24 hours from delivery.
Note: These rules does not apply to misdelivery of goods. (Roldan vs. Lim Ponzo)
Purpose of notice: To inform the carrier that the shipment has been damaged, and it is charged
with liability therefore, and to give it an opportunity to make an investigation and fix
responsibility while the matter is fresh.
The filing of notice of claim is a condition precedent for recovery.
Shorter period may be stipulated by the parties because it merely affects the shippers
remedy and does not affect the liability of the carrier. (PHILAMGEN vs. Sweetlines, Inc.)
Prescriptive Period
Not provided by Article 366. Thus, in such absence, Civil Code rules on prescription apply.
If despite the notice of claim, the carrier refuses to pay, action must be filed in court.
1. No bill of lading was issued: within 6 years
2. Bill of lading was issued: within 10 years.
1. International/
island/coastwis overseas/forei
e gn (from
transportation foreign
Land, water, country to
air Phils.)
transportation Note: subject
Carriage of to the rule on
goods Paramount
3. Carriage of
Notice of damage
1. Condition 1. Not a
precedent condition
2. 24-hour period precedent
for claiming 2. 3-day period
latent damage for claiming
latent damage
Prescriptive period
None provided; One year from
Civil Code the date of
applies. delivery
(delivered but
goods), or
date when the
vessel left port
or from the
date of
delivery to the
arrastre (non-
delivery or


GENERAL RULE: In case of a contract of transportation of several legs, each carrier is
responsible for its particular leg in the contract.
EXCEPTION: A combined carrier agreement where a carrier makes itself liable assuming the
obligations and acquiring as well the rights and causes of action of those which preceded it.