general merchandise as a common carrier to accept for
carriage a shipment of matches, solely on the ground of
CHAPTER 2
OBLIGATIONS OF THE COMMON CARRIER
Basic Obligation
The most basic obligation of the common carrier is to
transport the goods or passenger safely to the agreed
destination. The duties of the common carrier include:
1. To accept passengers and goods without
discrimination.
2. To seasonably deliver the goods or bring the
passenger to the destination.
3. To deliver the goods or bring the passenger to
the proper place or destination.
4. To deliver the goods to the proper person.
5. To exercise extraordinary diligence in the
performance of its duties.
DUTY TO ACCEPT GOODS FOR TRANSPORT
A common carrier that is granted a certificate of public
convenience is duty bound to accept passengers or cargo
without any discrimination.
Present Rule
The present laws forbid failures or refusals to receive
persons or property for carriage that have the effect of
giving an unreasonable or unnecessary preference or
advantage to any person, locality or PARTICULAR TRAFFIC,
or of subjecting any person, locality or particular kind of
traffic to any UNDUE OR UNREASONABLE PREJUDICE OR
DISCRIMINATION.
PASSENGERS
With respect to passengers, it has been explained that a
vessel generally engaged as a common carrier of
passengers is bound to receive carriage, without
discrimination all proper persons who desire it and
properly offer to become passengers unless some
sufficient excuse exists for refusing them.
VALID GROUNDS FOR NON-ACCEPTANCE
The rule prohibiting carriers engage in public
transportation from selecting its passengers or cargoes is
obviously NOT ABSOLUTE. There are instances when the
carrier can validly refuse to accept passengers or goods.
Fisher vs Yangco Steamship Company
It would be going too far to say that a refusal by a
steam vessel engaged in the business of transporting
Stephen Michael Ben
AUSL
the dangers incident to the explosive quality of this
class of merchandise, would not subject the traffic in
matches to an unnecessary, undue or unreasonable
prejudice and discrimination without proof that for
some special reason the particular vessel is not fitted to
carry articles of that nature. There may be and
doubtless are some vessels engaged in business as
common carriers of merchandise, which for lack of
suitable deck space or storage rooms might be justified
in declining to carry kerosene oil, gasoline, and similar
products, even when offered for carriage securely
packed in cases; and few vessels are equipped to
transport those products in bulk.
GROUNDS
Indeed, common carriers cannot lawfully decline to accept
a particular class of goods unless it appears that for some
sufficient reason the discrimination against the traffic in
such goods is reasonable and necessary. Mere whim or
prejudice will not suffice. The instances when the carrier
may validly refuse to accept goods includes the following:
1. When the goods sought to be transported are
dangerous objects, or substances including
dynamites and other explosives.
2. The goods are unfit for transportation.
3. Acceptance would result in overloading.
4. The goods are considered 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. Gods like livestock will be exposed to disease.
8. Strike
9. Failure to tender goods on time.
HAZARDOUS AND DANGEROUS SUBSTANCES
Carriers may be granted the authority to carry goods that
are by nature dangerous or hazardous. For instance, it is
clear that a general refusal for carriers to accept explosives
would involve many persons, firms, and enterprise in utter
ruin, and would disastrously affect the interests of the
public and general welfare of the community.
A carrier may be specially designed to carry dangerous
chemical that are necessary for certain manufacturing
business and may secure the appropriate authorization for
such purpose.
UNFIT FOR TRANSPORT
Carriers may refuse to accept goods that are unfit for
transportation. These goods may by nature be unfit for
1
transportation or are unfit because of improper packaging
or defect in their containers. However, the carrier may
choose to transport such goods and limit its liability by
stipulation.
ARTICLE 356. Carriers may refuse packages which
appear unfit for transportation; and if the carriage is to
be made by railway, and the shipment is insisted upon,
the company shall transport them, being exempt from
all responsibility if its objections, is made to appear in
the bill of lading.
LESSENING LOSS
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.
INSPECTION
Saludo Jr. vs CA
It can safely be said then that a common carrier is entitled to
fair representation of the nature and value of the goods to be
carried, with the concomitant right to rely thereon, and
further noting at this juncture that a carrier has no obligation
to inquire into the correctness or sufficiency of such
information. The consequent duty to conduct an inspection
thereof arises in the event that there should be reason to
doubt the veracity of such representations.
TRANSPORTATION OF ANIMALS
R.A. 10631
SECTION 1. It is the purpose of this Act to protect and promote
the welfare of all terrestrial, aquatic and marine animals in the
Philippines by supervising and regulating the establishment
and operations of all facilitiesutilized for breeding,
maintaining, keeping, treating or training of all animals either
as objects of trade or as household pets. For this purpose of
this Act, pet animal shall include birds.
For purposes of this Act, animal welfare pertains to the
physical and psychological well-being of animals. It includes,
but not limited to, the avoidance of abuse, maltreatment,
cruelty and exploitation of animals by humans by maintaining
appropriate standards of accommodation, feeding and general
care, the prevention and treatment of decease and the
assurance of freedom from fear, distress, harassment, and
unnecessary discomfort and pain, and allowing animals to
express normal behavior.
Stephen Michael Ben
AUSL
The obligations of carrier of animals are provided for
under Section 4
SECTION 4. It shall be the duty of the owner or operator of
any land, air or water public utility transporting pet, wildlife
and all other animals to provide in all cases adequate, clean
and sanitary facilities for the safe conveyance and delivery
thereof to their consignee at the place of consignment. They
shall provide sufficient food and water for such animals while
in transit for more than twelve (12) hours or whenever
necessary.
No public utility shall transport any such animal without
a written permit from the Director of the Bureau of Animal
Industry or his/her authorized representative. No cruel
confinement or restraint shall be made on such animals while
being transported.
Any form of cruelty shall be penalized even if the
transporter has obtained a permit from the Bureau of Animal
Industry. Cruelty in transporting includes overcrowding,
placing of animals in the trunks or under the food trunks of the
vehicles.
DUTIES TO SPECIAL CALSSES OF PASSENGERS
There are special laws that give specific statutory rights to
certain passengers because of the care that is given to
them by the State. These include specific rules on persons
with disability (PWD) and senior citizens; carriers are
mandated to ensure that PWDs and senior citizens shall
have equal access to air transportation services in
accordance with the mandate of B.P. Blg. 344 and the
Expanded Senior Citizens Act of 2010.
PERSONS WITH DISABILITY
R.A. 7277
SECTION 26. Mobility - The State promote the mobility of
disabled persons. Disabled persons shall be allowed to drive
motor vehicles, subject to the rules and regulations issued by
the Land Transportation Office pertinent to the nature of their
disability and the appropriate adaptations or modifications
made on such vehicles.
SECTION 27. Access to Public Transport Facilities - The
Department of Social Welfare and Development shall develop
a program to assist marginalized disabled persons gain access
in the use of public transport facilities. Such assistance may be
in the form of subsidized transportation fare. The said
department shall also allocate such funds as may be necessary
for the effective implementation of the public transport
program for the disabled persons.
The “Accessibility Law” as amended, shall be made
supplementary to this Act
SECTION 34. Public Transportation - It shall be considered
discrimination for the franchises or operators and personnel of
sea, land, and air transportation facilities to charge higher fare
2
 or to refuse to convey a passenger, his orthopedic devices,
personal effects, and merchandise by reason of his disability.
SENIOR CITIZENS
Senior Citizens are also given20% discount relative to
utilization of transportation services. In addition, section
5(f) of the Expanded Senior Citizens Act of 2003 requires
the DOTC to develop a program to assist senior citizens to
fully gain access in the use of public transport facilities.
(f) Access to Public Transport- The Department of
Transportation and Communications (DOTC) shall develop a
program to assist senior citizens to fully gain access to public
transport facilities.
DUTY TO MAKE TIMELY DELIVERY OF THE GOODS
The carrier is duty bound to deliver the goods within the
time agreed upon to the designated consignee.
1. AGREEMENT AS TO TIME. The goods must be
delivered within the stipulated time. Where the
carrier has made an express contract to transport and
deliver property within a specified time, he is bound
to fulfill the contract and is liable for any delay, no
matter from what cause it may have arisen.
1.1. The Code of Commerce provisions on Overland
Transportation: ARTICLE 358. “If there is no
period fixed for the delivery of the goods the
carrier shall be bound to forward them in the
first shipment of the same or similar goods
which he may make point where he must
deliver them; and should he not do so, the
damages caused by the delay should be for his
account.”
2. REASONABLE TIME. The oft-repeated rule regarding a
carrier’s liability for delay is that in the absence of a
special contract, a carrier is not an insurer against
delay in the transportation of goods. When a
common carrier undertakes to convey goods, the law
implies a contract that they shall be delivered at
destination within a reasonable time, in the absence,
of any agreement as to the time of delivery.
2.1. In determining if the delivery is made within a
reasonable time, the expected date of arrival
reflected in the bill of lading may be considered.
2.2. What is considered reasonable time may also
depend upon the nature of the goods.
CONSEQUENCES OF DELAY
Excusable delays in carriage suspend, but do not generally
terminate, the contract of carriage, and when the cause is
Stephen Michael Ben
AUSL
removed, the master must proceed with the voyage and
make delivery.
1. New Civil Code Provisions on Delay
1.1. Article 1740. If the common carrier
negligently incurs in delay in transporting the
goods, a natural disaster shall not free such carrier
from responsibility.
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.
2. Code of Commerce Provisions on Delay
2.1. ARTICLE 370. If a period has been fixed
for the delivery of the goods, it must be made
within such time, and, for failure to do so, the
carrier shall pay the indemnity stipulated in the bill
of lading, neither the shipper nor the consignee
being entitled to anything else.
If no indemnity has been stipulated and the delay
exceeds the time fixed in the bill of lading, the
carrier shall be liable for the damages which the
delay may have caused.
ARTICLE 371. In case of delay through the fault of
the carrier, referred to in the preceding articles,
the consignee may leave the goods transported in
the hands of the former, advising him thereof in
writing before their arrival at the point of
destination.
When this abandonment takes place, the carrier
shall pay the full value of the goods as if they had
been lost or mislaid.
If the abandonment is not made, the
indemnification for losses and damages by reason
of the delay cannot exceed the current price which
the goods transported would have had on the day
and at the place in which they should have been
delivered; this same rule is to be observed in all
other cases in which this indemnity may be due.
ARTICLE 372. The value of the goods which the
carrier must pay in cases if loss or misplacement
shall be determined in accordance with that
declared in the bill of lading, the shipper not being
allowed to present proof that among the goods
declared therein there were articles of greater
value and money.
Horses, vehicles, vessels, equipment and all other
principal and accessory means of transportation
shall be especially bound in favor of the shipper,
although with respect to railroads said liability shall
be subordinated to the provisions of the laws of
concession with respect to the property, and to
what this Code established as to the manner and
3
 form of effecting seizures and attachments against
said companies.
ARTICLE 373. The carrier who makes the delivery of
the merchandise to the consignee by virtue of
combined agreements or services with other
carriers shall assume the obligations of those who
preceded him in the conveyance, reserving his right
to proceed against the latter if he was not the party
directly responsible for the fault which gave rise to
the claim of the shipper or consignee.
The carrier who makes the delivery shall likewise
acquire all the actions and rights of those who
preceded him in the conveyance. The shipper and
the consignee shall have an immediate right of
action against the carrier who executed the
transportation contract, or against the other
carriers who may have received the goods
transported without reservation.
However, the reservation made by the latter shall
not relieve them from the responsibilities which
they may have incurred by their own acts.
ARTICLE 374. The consignees to whom the
shipment was made may not defer the payment of
the expenses and transportation charges of the
goods they receive after the lapse of twenty-four
hours following their delivery; and in case of delay
in this payment, the carrier may demand the
judicial sale of the goods transported in an amount
necessary to cover the cost of transportation and
the expenses incurred.
3. Right to Abandon. The fist paragraph of Article 371 of
the Code of Commerce provides that in case of delay
on account of the fault of the carrier, the consignee
may leave the goods transported in the hands of the
carrier, informing him thereof in writing before the
arrival of the same at the point of destination. The
carrier shall be liable for the total value of such goods.
3.1. SC ruled that abandonment may also be virtue
of stipulation or agreement between parties.
3.2. Magelan Mfg. Marketing Corp. vs
Court of appeals
Now, there is no dispute that private respondents
expressly and on their own volition granted
petitioner an option with respect to the
satisfaction of freightage and demurrage charges.
Having given such option, especially since it was
accepted by petitioner, private respondents are
estopped from reneging thereon. Petitioner, on its
part, was well within its right to exercise said
option. Private respondents, in giving the option,
and petitioner, in exercising that option, are
concluded by their respective actions. To allow
either of them to unilaterally back out on the offer
and on the exercise of the option would be to
countenance abuse of rights as an order of the
day, doing violence to the long entrenched
principle of mutuality of contracts.
Stephen Michael Ben
AUSL
It will be remembered that in overland
transportation, an unreasonable delay in the
delivery of transported goods is sufficient ground
for the abandonment of goods. By analogy, this
can also apply to maritime transportation. Further,
with much more reason can petitioner in the
instant case properly abandon the goods, not only
because of the unreasonable delay in its delivery
but because of the option which was categorically
granted to and exercised by it as a means of
settling its liability for the cost and expenses of
reshipment. And, said choice having been duly
communicated, the same is binding upon the
parties on legal and equitable considerations of
estoppel.
PLACE OF DELIVERY
The goods should be delivered to the consignee in the
place agreed upon by the parties. If the specific place or
warehouse is designated in the bill of lading, the goods
must be delivered in such place even if it is not the usual
place of delivery in the place of destination.
TO WHOM DELIVERED
The goods should be delivered to the consignee or any
other person to whom the bill of lading was validly
transferred or negotiated.
The Code of Commerce:
ARTICLE 368. The carrier must deliver to the
consignee, without any delay or obstruction, the
goods which he may have received, by the mere
fact of being named in the bill of lading to receive
them; and if he does not do so, he shall be liable for
the damages which may be caused thereby.
ARTICLE 369. If the consignee cannot be found at
the residence indicated in the bill of lading, or if he
refuses to pay the transportation charges and
expenses, or if he refuses to receive the goods, the
municipal judge, where there is none of the first
instance, shall provide for their deposit at the
disposal of the shipper, this deposit producing all
the effects of delivery without prejudice to third
parties with a better right.
a. Conflict Between Consignee and Shipper.
Speaking of the possibility of a conflict between
the order of the shipper on one hand and the
order of the consignee on the other, as when the
shipper orders the shipping company to return
or retain the goods shipped while the consignee
demands their delivery, an authority on
Commercial law, said that the right of the
shipper to countermand the shipment
terminates when the consignee or legitimate
4
 holder of the bill of lading appears with such bill
of lading before the carrier and makes himself a
party to the contract, Prior to that time, he is a
stranger to the contract.
b. It should be recalled that one of the alternative
theories that justify the presence of a right of a
consignee and the binding effect of the bill of
lading to the consignee is to consider the
stipulation naming a third person as a consignee
as a stipulation pour autrui.1
c. Effect of Negotiable Bill of Lading. It should also
be recalled that a negotiable bill of lading is a
document of title that may be transferred to a
holder for value. In case such transfer, the carrier
is obligated to deliver the goods to the
transferee or holder. The transferee to whom
the bill of lading has been negotiated acquires
the direct obligation of the carrier from the time
of such negotiation.
DELAY TO TRANSPORT PASSENGERS
The basic rule that applies to carriage of goods shall also
apply to carriage of passengers, that is, the carrier must
commence its trip within a reasonable time.
A carrier is duty bound to transport the passenger with
reasonable dispatch. The carrier shall be made liable when
the vessel or vehicle is unreasonably delayed.
a. Trans-Asia Shipping Lines Inc., vs CA
As to the rights and duties of the parties strictly
arising out of such delay, the Civil Code is silent.
However, as correctly pointed out by the petitioner,
Article 698 of the Code of Commerce specifically
provides for such a situation. It reads:
In case a voyage already begun should
be interrupted, the passengers shall be
obliged to pay the fare in proportion to
the distance covered, without right to
recover for losses and damages if the
interruption is due to fortuitous event or
force majeure, but with a right to
indemnity if the interruption should
have been caused by the captain
exclusively. If the interruption should be
caused by the disability of the vessel and
a passenger should agree to await the
repairs, he may not be required to pay
any increased price of passage, but his
living expenses during the stay shall be
for his own account.
1
a contract or provision in a contract that confers a
benefit on a third-party beneficiary
Stephen Michael Ben
AUSL
b. Suppletory Application. Article 698 of the Code
of Commerce applies suppletorily pursuant to
Article 1766 of the Civil Code. Article 698 must
be read together with Articels 2199, 2200, 2201,
and 2208 in relation to Article 21 of the Civil
Code. Consequently, the carrier is liable for any
loss or damage
Article 2199. Except as provided by law or by
stipulation, one is entitled to an adequate
compensation only for such pecuniary loss suffered
by him as he has duly proved. Such compensation is
referred to as actual or compensatory damages.
Article 2200. Indemnification for damages shall
comprehend not only the value of the loss suffered,
but also that of the profits which the obligee failed
to obtain. (1106)
Article 2201. In contracts and quasi-contracts, the
damages for which the obligor who acted in good
faith is liable shall be those that are the natural and
probable consequences of the breach of the
obligation, and which the parties have foreseen or
could have reasonably foreseen at the time the
obligation was constituted.
Article 2208. In the absence of stipulation,
attorney's fees and expenses of litigation, other
than judicial costs, cannot be recovered, except:
(1) When exemplary damages are
awarded;
(2) When the defendant's act or
omission has compelled the plaintiff to
litigate with third persons or to incur
expenses to protect his interest;
(3) In criminal cases of malicious
prosecution against the plaintiff;
(4) In case of a clearly unfounded civil
action or proceeding against the
plaintiff;
(5) Where the defendant acted in gross
and evident bad faith in refusing to
satisfy the plaintiff's plainly valid, just
and demandable claim;
(6) In actions for legal support;
5
 (7) In actions for the recovery of wages 3.2 The carrier shall provide meals, free of charge,
of household helpers, laborers and during meal time in case the vessel is delayed in the
skilled workers; arrival at the port of destination.

3.3 In case of delay in the departure at the port of

(8) In actions for indemnity under
workmen's compensation and
employer's liability laws;
(9) In a separate civil action to recover
civil liability arising from a crime;
origin due to the carrier’s negligence, the carrier is
also under obligation to provide meals, free of
charge, during meal time to ticketed passengers for
the particular voyage. If the cause of the delay is a
fortuitous event, the carrier is under no obligation
to serve free meals to the passengers.

(10) When at least double judicial costs 3.4 The carrier is under obligation to duly inform
are awarded; the passengers of the change in sailing schedule of
the vessel(s).

(11) In any other case where the court

deems it just and equitable that
AIR TRANSPORTATION
attorney's fees and expenses of
litigation should be recovered.
There are specific rules on delay in transportation of airline
passengers provided for under Bill of Rights of Passengers
In all cases, the attorney's fees and expenses of
embodied in DOTC-DTI Joint Administrative Order No. 1
litigation must be reasonable.
Series 2012 and CAB Economic Regulation No. 9.
Article 21. Any person who wilfully causes loss or DUTY TO EXERCISE EXTRAORDINARY DILIGENCE
injury to another in manner that is contrary to
morals, good customs or public policy shall A common carrier is required to faithfully comply with his
compensate the latter for the damage.
obligation to deliver the goods and to ferry the passenger
c. Effect of Decision of Passenger. Trans-Asia
to the point of destination.
Shipping Lines Inc., vs CA, the passengers was
not able to recover lost profits that resulted Compliance with this obligation must be with the element
because of his own decision to disembark. of integrity in the sense that the goods should be delivered
The Supreme Court explained that the carrier in the same condition that they were received and to
would have been liable for loss of income if transport passengers without encountering any harm or
the plaintiff were unable to report to his loss. In the exercise of this obligation, the common carrier
office on the day he was supposed to arrive is obligated to exercise extraordinary diligence. Failure to
were it not for the delay.
exercise extraordinary diligence will result in breach of the
d. MARINA Regulation. It should be noted in this
obligation of the carrier through negligence. The duty to
connection that Memorandum Circular No. 112
exercise extraordinary diligence is provided for in Articles
issued by the Maritime Industry Authority
1733 and 1755 of the Civil Code.
proved that “in case the vessel is not able to
depart on time and the delay is unreasonable, Article 1733. Common carriers, from the nature of their
the passenger may opt to have his/her ticket business and for reasons of public policy, are bound to observe
immediately refunded without any refund extraordinary diligence in the vigilance over the goods and for
the safety of the passengers transported by them, according to
service fee from the authorized issuing/ticketing all the circumstances of each case.
Office.”
DELAYED AND UNFINISHED VOYAGE
Such extraordinary diligence in the vigilance over the goods is
3.1 In case the vessel can not continue or complete
further expressed in articles 1734, 1735, and 1745, Nos. 5, 6,
her voyage for any cause, the carrier is under
and 7, while the extraordinary diligence for the safety of the
obligation to transport the passenger to his/her
passengers is further set forth in articles 1755 and 1756.
destination at the expense of the carrier including
free meals and lodging before the said passenger is
transported to his/her destination. A passenger Article 1755. A common carrier is bound to carry the
may opt to have his/her ticket refunded in full if the passengers safely as far as human care and foresight can
cause of the unfinished voyage is due to the provide, using the utmost diligence of very cautious persons,
negligence of the carrier, or, to an amount that will with a due regard for all the circumstances.
suffice to defray transportation cost at the shortest
possible route towards his/her destination if the
cause of the unfinished voyage is a fortuitous
event.

6
Stephen Michael Ben
AUSL
CODE OF COMMERCE PROVISIONS
Related provisions:
ARTICLE 363. Outside of the cases mentioned in the second
paragraph of Article 361, the carrier shall be obliged to deliver
the goods shipped in the same condition in which, according to
the bill of lading, they were found at the time they were
received, without any damage or impairment, and failing to do
so, to pay the value which those not delivered may have at the
point and at the time at which their delivery should have been
made.
If those not delivered form part of the goods transported, the
consignee may refuse to receive the latter, when he proves that
he cannot make use of them independently of the others.
ARTICLE 364. If the effect of the damage referred to in Article
361 is merely a diminution in the value of the goods, the
obligation of the carrier shall be reduced to the payment of the
amount which, in the judgment of experts, constitutes such
difference in value.
ARTICLE 365. If, in consequence of the damage, the goods are
rendered useless for sale and consumption for the purposes for
which they are properly destined, the consignee shall not be
bound to receive them, and he may have them in the hands of
the carrier, demanding of the latter their value at the current
price on that day.
If among the damaged goods there should be some pieces in
good condition and without any defect, the foregoing provision
shall be applicable with respect to those damaged and the
consignee shall receive those which are sound, this segregation
to be made by distinct and separate pieces and without dividing
a single object, unless the consignee proves the impossibility of
conveniently making use of them in this form.
The same rule shall be applied to merchandise in bales or
packages, separating those parcels which appear sound.
RATIONALE
The common carrier is not the insurer of the lives and
properties of the passenger and shipper. Nevertheless the
highest degree of care is required.
The Code of Commission explained why extraordinary
diligence must be complied with the performance of the
functions of a common carrier:
“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 due regard
for all circumstances. The extraordinary diligence required
of common carriers is calculated to protect the passengers
from the tragic mishaps that frequently occur in
connection with rapid modern transportation. The high
standard of care is imperatively demanded by
Stephen Michael Ben
AUSL
preciousness of human life and by the consideration that
every person must in every way safeguarded against all
injury.”
MEANING OF EXTRAORDINARY DILIGENCE
To prove the exercise of extraordinary diligence, the
carrier must do more than merely show the possibility that
some other party could be responsible for the damage. It
must prove that it used all reasonable means to ascertain
the nature and characteristics of the goods tendered for
transport and it exercised due care in handling them.
NON-DELEGABLE DUTY
The “duty of seaworthiness”, the duty of care of the cargo
is non-delegable, and the carrier is accordingly responsible
for the acts of the master, the crew, the stevedore, and his
other agents. It has also been held that it is ordinarily the
duty of the master of a vessel to unload the cargo and
place it in readiness for delivery to the consignee, and
there is an implied obligation that this shall be
accomplished with sound machinery, competent hands,
and in such manner that no unnecessary injury shall be
done thereto. And the fact that a consignee is required to
furnish persons to assist in unloading a shipment may not
relieve the carrier of its duty as to such unloading.
PRESUMPTION OF NEGLIGENCE
In case of loss of effects or cargo or passengers or death or
injuries to passengers, the common carrier is presumed to
be at fault or have acted negligently unless he has
observed extraordinary diligence in the vigilance thereof.
The court need not make an express finding of fault or
negligence of common carriers, the law imposes liability
upon common carriers, as long as it is shown that:
1. There exists a contract between the passenger
or the shipper and the common carrier.
2. That the loss, deterioration, injury or death took
place during the existence of the contract.
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.
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.
7
There is no presumption of bad faith even if there is
presumption of negligence. Bad faith should be
established by clear and convincing evidence. The law
presumes good faith such that any person who seeks to be
awarded damages due to acts of another has the burden
of proving that the latter acted in bad faith or with ill
motive. It should be noted that the finding of bad faith is
necessary if the court is to award moral and exemplary
damages in breach of contract of carriage cases.
EFFECT OF ACQUITTAL
The acquittal of the employee of the common carrier in
the criminal case is immaterial to the case for breach of
contract. Article 31 of the New Civil Code provides that
“when the civil action is based on an obligation not arising
from the act or omission complained of as a felony, such
civil action may proceed independently of the criminal
proceedings and regardless of the result of the latter.”
Thus, a ruling on the culpability of the offender will have
no bearing on said independent civil action based on an
entirely different cause of action, i.e., culpa contractual2.
Thus, regardless of employee’s acquittal or conviction in
the separate criminal case, the same has no bearing in the
resolution of the case based on culpa contractual; there is
no effect on the presumption of negligence in the breach
of contract cases.
DURATION OF DUTY IN CARRIAGE OF GOODS
Due diligence should be exercised the moment the goods
are delivered to the carrier.
Article 1736. The extraordinary responsibility of the common
carrier lasts from the time the goods are unconditionally
placed in the possession of, and received by the carrier for
transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to the
person who has a right to receive them, without prejudice to
the provisions of article 1738.
Article 1737. The common carrier's duty to observe
extraordinary diligence over the goods remains in full force
and effect even when they are temporarily unloaded or stored
in transit, unless the shipper or owner has made use of the
right of stoppage in transitu.
Article 1738. The extraordinary liability of the common carrier
continues to be operative even during the time the goods are
stored in a warehouse of the carrier at the place of
destination, until the consignee has been advised of the arrival
of the goods and has had reasonable opportunity thereafter to
remove them or otherwise dispose of them.
2 4
is the fault or negligence incident in the performance of an
obligation which already existed, and which increases the
liability from such already existing obligation
3
At that instant; at the very or same Instant; immediately
Stephen Michael Ben
AUSL
1. When the goods are deemed delivered to the carrier.
The goods are deemed delivered to the carrier when
the goods are ready for and have been placed in the
exclusive possession, custody and control of the
carrier for the purpose of their immediate
transportation and the carrier has accepted them.
When the carrier has thus accepted such delivery, the
liability of the carrier commences eo intsanti3.
2. Temporary Unloading or Storage. Article 1737 of the
New Civil Code provides that 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. This
means that the goods have not yet been delivered to
the consignee and that the voyage of the carrier will
resume.
3. Stoppage in transitu. By way of exception under
Article 1737, extraordinary diligence need not be
exercised over the goods that are unloaded
temporarily if the shipper or owner has made use the
right of stoppage in transitu4. The right of stoppage in
transitu is the right of an unpaid seller to resume
possession of the goods at any time while the goods
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. The
right is available if:
3.1. The buyer of goods is or becomes insolvent.
3.2. The unpaid seller has parted with the
possession of the goods.
3.3. The goods are still in transit.
4. Diligence up to Delivery. The “extraordinary
responsibility of the common carrier lasts until the
time the goods are actually or constructively
delivered by the carrier to the consignee or the
person who has the right to receive them. There us
actual delivery in contracts fir the transport of goods
when the possession has been turned over to the
consignee or to his duly authorized agent and a
reasonable time is given to remove the goods.” Thus,
cargoes generally remain under the custody of the
carrier while being unloaded.
5. Delivery to Customs Authority. The implication in the
case of Lu Do & Lu Ym Corporation vs I.V. Binamira, is
that, generally, the goods remain to be the
responsibility of the carrier if they are still in the
hands of customs officials. There is no delivery of the
cargo to the consignee, or to the person who has a
the right of a seller of goods to stop them on their way
to the buyer and resume possession of them (as on
discovery of the buyer's insolvency)
8
 right to receive them, contemplated in Article 1736
because in such case the goods are still in the hands
of the Government and the owner cannot exercise
dominion over them.
COMMENCEMENT OF DUTY IN CARRIAGE OF
PASSENGERS
With respect to carriage of passengers by trains, the
extraordinary responsibility of common carriers
commences the moment the person who purchases the
ticket from the carrier present himself at the proper place
and in a proper manner to be transported with a bona fide
intent to ride the coach.
1. Trains. Consistently, the petitioner carrier was
supposed to exercise extraordinary diligence in Light
Rail Transit Authority vs Marjorie Navidad although
the injury was sustained while the victim was still
waiting for a coach on the platform of the LRT station.
However, the SC reminded in one case “With respect to
the legal aspects of the case we may observe at the outset
that there is no obligation on the part of a street railway
company to stop its cars to let on intending passengers at
other points than those appointed for stoppage. In fact it
would be impossible to operate a system of street cars if a
company engage in this business were required to stop any
and everywhere to take on people who were too indolent,
or who imagine themselves to be in too great a hurry, to go
to the proper places for boarding the cars. Nevertheless,
although the motorman of this car was not bound to stop to
let the plaintiff on, it was his duty to do act that would have
the effect of increasing the plaintiff's peril while he was
attempting to board the car. The premature acceleration of
the car was, in our opinion, a breach of this duty.”5
2. Carriage by Sea. Similarly, with respect to carriage of
passengers by sea, the duty of the carrier commences
as soon as a person with bona fide intention of taking
passage places himself in the care of the carrier or its
employees and is accepted as passenger.
3. Land Transportation. On the other hand, motor
vehicles like passenger jeepneys and buses are duty
bound to stop their conveyances for a reasonable
length of time in order to afford passengers an
opportunity to board and enter, and they are liable
for injuries suffered by boarding passengers resulting
from the sudden starting up or jerking of their
conveyances while they do so. The rule is that once a
public utility bus or jeepney stops, it is making a
continuous offer to bus riders.
HOW DUTY IS COMPLIED WITH
There is no hard and fast rule in the exercise of
extraordinary diligence. The law does not prescribe a
5
De Prado vs Manila Electric Co.
Stephen Michael Ben
AUSL
formula that must be used to determine if due diligence is
complied with. The Supreme Court explained in one case
that the source of common carrier’s legal liability is the
contract of carriage, and by entering into said contract. It
binds itself to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence
of a very cautious person, with a due regard for all the
circumstances.
1. Diligence of a good father of a family not enough.
Under the present laws, it is not enough for the
carrier to exercise ordinary diligence. A reasonable
man or a good father of a family in the position of the
carrier must exercise extraordinary diligence in the
performance of his contractual obligation. More is
required if the carrier because the law mandates him
to exercise extraordinary diligence in the
performance of his obligation.
2. Statutory Duties to Passengers. With respect to
passengers, the statutory duty of common carriers
includes the responsibilities provided for under
Articles 1759 and 1763 of the New Civil Code.
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
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.
DUTY TO THIRD PERSONS
The duty to exercise extraordinary diligence is primarily
owed to the passengers and the goods are transported.
However it was ruled in one case that the duty even
extends to the members of the crew or complement
operating the carrier. In an earlier case, the rule was
applied to a clerk of a railroad company who was riding
the train on his way home from work.
• Duty to third persons. Additionally, there is
authority for the view that extraordinary
diligence is owed not only to passengers or
shippers but also to third persons as well.
EFFECT OF STIPULATION OF EXTRAORDINARY DILIGENCE
9
The parties may voluntarily modify the duty of the carrier
by express provision of their contract. However, in certain
instances, the stipulation may be considered invalid
• GOODS. The parties cannot stipulate that the
carrier will not exercise any diligence in the
custody of goods. Neither can it be stipulated
that the goods are the shipper’s risk. However,
the law allows a stipulation whereby the carrier
will exercise a degree of diligence that is less
than extraordinary with respect to the goods.
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.
• PASSENGERS. There can be no stipulation
lessening the utmost diligence that is owed to
passengers. Article 1757 provides that the
responsibility to observe extraordinary or utmost
diligence provided for in Articles 1733 and 1755
cannot be dispensed with or lessened through
stipulation or posting of notices.
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.
• GRATUITOUS PASSENGER. It is implied from
Article 1758 that the extraordinary diligence is
also required even if the passenger is carrier
gratuitously. A common carrier should therefore
exercise extraordinary diligence even as to non-
paying passengers.
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
EXTRAORDINARY DILIGENCE IN CARRIAGE BY SEA
The provision requiring extraordinary diligence owed its
conception to the nature of the business of common
Stephen Michael Ben
AUSL
carriers. This business is impressed with a special public
duty. The public must of necessity rely on the care and skill
of common carriers in the vigilance over the goods and
safety of the passengers, especially because with modern
development of science and invention, transportation has
become more rapid, more complicated and somehow
more hazardous.
SEAWORTHINESS
The first step that must be undertaken by the common
carrier in complying with the duty to exercise
extraordinary diligence in transporting goods or
passengers by sea or any other body of water is to make
the vessel seaworthy. Extraordinary diligence requires that
the ship that will transport the passengers and goods is
seaworthy.
• Warranty of seaworthiness of Ship. A passenger
or a shipper of goods is under no obligation to
conduct an inspection of the ship and its crew;
the carrier is obliged by law to impliedly warrant
its seaworthiness. Although there is no express
provision under the new Civil Code that provides
for warranty of seaworthiness if the ship, the
warranty is implied because the failure of a
common carrier to maintain in seaworthy
condition the vessel involved in its contract of
carriage is a clear breach of its duty prescribed in
Article 1755 of the Civil Code.
• Warranty Under Special Law. Seaworthiness of
the vessel is impliedly warranted under the
Insurance Code of the Philippines. The same rule
can be found in the Carriage of Goods by Sea
Act, the special law that deals with the
international carriage:
Section 3. (1) The carrier shall be bound, before
and at the beginning of the voyage, to exercise due
diligence to —
(a) Make the ship seaworthy;
• Domestic Shipping.
SEC. 9. Safety Standards. - All vessels operate by
domestic ship operators shall at all times be in
seaworthy condition properly equipped with
adequate life-saving, communication, safety and
other equipment operated and maintained in
accordance with the standards set by MARINA, and
manned by duly licensed and competent vessel
crew.
The MARINA shall have the power to inspect
vessels and all equipment on board to ensure
compliance with safety standards.
10
 • The rules that implement the Domestic Shipping
Act of 2004
Section 9. Safety Standards – All vessels operated
by domestic ship operators shall at all times be in
seaworthy condition, properly equipped with
adequate life-saving, communication, safety and
other equipment, operated and maintained in
accordance with the standards set by MARINA.
9.1 All ships must be manned by duly licensed and
competent vessel crew and shall comply with
qualification standards set by MARINA for seafarers
onboard its registered ships.
9.2 In the exercise of its power to inspect all ships
and all equipment on board vessels, the MARINA
shall undertake inspections in conformity with the
Ship Safety Inspection System (SSIS), and ensure
that all shipowners or operators shall maintain their
ships in accordance with operational and safety
standards required by existing laws and/or
applicable international conventions, codes, rules
and regulations for the duration of the ship’s
operational life.
9.3 All ships are required to carry on board the
relevant or applicable ship safety certificates issued
by MARINA.
• No duty to Inquire. It follows that because of the
implied warranty of seaworthiness, shippers of
goods, when transacting with common carriers,
are not expected to inquire into the vessel’s
seaworthiness, genuineness of its licenses and
compliance with all Maritime laws. To demand
more from shippers and hold them liable in case
of failure exhibits nothing but the futility of our
maritime laws insofar as the protection of the
public in general is concerned.
• Burden of Proof. The passenger or shipper is not
required to prove inceptively in a case that he
filed that the ship was not seaworthy. Where the
vessel is found unseaworthy, the shipowner is
also presumed to be negligent since it is tasked
with the maintenance of the ship. It is the carrier
that carries the burden of proving that the ship is
seaworthy. Sufficient evidence must be
submitted and the presentation of certificates of
seaworthiness is not sufficient to overcome the
presumption of negligence.
MEANING OF SEAWORTHINESS
There is no provision in the Civil Code or the Code of
Commerce that deals squarely on the meaning of
seaworthiness. Nevertheless, the Supreme Court explained
the concept of seaworthiness.
Stephen Michael Ben
AUSL
Standard Vacuum Oil Co. vs Luzon Stevedoring Co.
(1) Generally, seaworthiness is that strength, durability and
engineering skill made a part of a ship's construction and
continued maintenance, together with a competent and
sufficient crew, which would withstand the vicissitudes and
dangers of the elements which might reasonably be expected
or encountered during her voyage without loss or damage to
her particular cargo. The Cleveco, D.C. Ohio, 59 F. Supp. 71, 78,
affirmed, C.C.A., 154 F. 2d 606.
• Insurance Code. The provision of the Insurance
Code of the Philippines as amended regarding
seaworthiness are instructive:
SEC. 116. A ship is seaworthy when reasonably fit
to perform the service and to encounter the
ordinary perils of the voyage contemplated by the
parties to the policy.
SEC. 118. A warranty of seaworthiness extends not
only to the condition of the structure of the ship
itself, but requires that it be properly laden, and
provided with a competent master, a sufficient
number of competent officers and seamen, and the
requisite appurtenances and equipment, such as
ballasts, cables and anchors, cordage and sails,
food, water, fuel and lights, and other necessary or
proper stores and implements for the voyage.
SEC. 121. A ship which is seaworthy for the purpose
of an insurance upon the ship may, nevertheless, by
reason of being unfitted to receive the cargo, be
unseaworthy for the purpose of insurance upon the
cargo.
• COGSA. Moreover, Section 3, paragraphs [1] and
[2] of the Carriage Of Goods by Sea Act provides:
Section 3. (1) The carrier shall be bound, before
and at the beginning of the voyage, to exercise due
diligence to —
(a) Make the ship seaworthy;
(b) Properly man, equip, and supply the ship;
(c) Make the holds, refrigerating and cooling
chambers, and all other parts of the ship in which
goods are carried, fit and safe for their reception
carriage and preservation.
(2) The carrier shall properly and carefully load,
handle, stow, carry, keep, care for, and discharge
the goods carried.
• From the above-quoted statutory rules and
prevailing jurisprudence, it can be inferred that
to be seaworthy, a vessel must have such degree
of fitness which an owner who is exercising
extraordinary diligence would require his vessel
to have at the commencement of her voyage,
11
 having regard to all the probable circumstances
of it.
• Seaworthiness is relative in its construction and
its application depends on the facts of a
particular case. Thus, the length and nature of
the voyage may be considered so that a ship may
be seaworthy for one voyage and not so for
another.
• Fitness of the vessel itself. It is necessary that
the vessel can be expected to meet the normal
hazards of the journey. The general test of
seaworthiness in this respect is therefore
whether the ship and its appurtenances are
reasonably fit to perform the service undertaken
(1) In once case, the carrier was able to
establish that the ship itself was
seaworthy because the records
reveal that the vessel was
drydocked and inspected by the
Philippine Coast Guard before it
proceeded to its destination. The
said voyage was the first voyage
after drydocking and the Philippine
Coast Guard cleared it as
seaworthy, fitted, and equipped
and met all the requirements for
trading as cargo vessel.
(2) On the other hand, the
unseaworthiness of the vessel may
be established by the fact that it did
not withstand the natural and
inevitable action of the sea. A
seaworthy ship will not normally
sink if the sea is moderate or if the
carrier and its employees were not
negligent.
(3) The duty to make the ship
seaworthy, including maintenance
of the ship, can be delegated.
However, the shipowner must
exercise close supervision over its
men.
CARGOWORTHINESS
It is important, however, that the ship itself must not only
be seaworthy to undertake the voyage but it must also be
“cargoworthy.” Even if the vessel was properly maintained
and is free from defect, the carrier must not accept goods
that cannot properly be transported in the ship. The ship
must be fit to carry the contemplated cargo as a carrying
receptacle.
PROPER MANNING
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 competence
Stephen Michael Ben
AUSL
of the captain, masters or patrons of vessels is expressly
required in Article 609 of the Code of Commerce:
Art 609. Captains, masters or patrons of vessels be
Filipinos, have legal capacity to contract in
accordance with his code, and prove the skill,
capacity, and qualifications necessary to command
and direct the vessel, as established by marine or
navigation laws, ordinances, or regulations, and
must not be disqualified according to the same for
the discharge of the duties of the position.
If the owner of a vessel desires to be the captain
thereof, without having the legal qualifications
therefor, he shall limit himself to the financial
administration of the vessel, and shall in trust the
navigation to a person possessing the qualifications
required by said ordinances and regulations
ADEQUATE EQUIPMENT
With respect to vessels that carry passenger, the Maritime
Industry Authority prescribes rules that provide for
indispensable equipment and facilities. Thus, the rules
include the requirement that there are adequate exit
doors, lifeboats, life vests and other similar items.
OVERLOADING
Duty to exercise due diligence likewise includes the duty to
take passengers or cargoes that are within the carrying
capacity of the vessel.
PROPER STORAGE
The vessel itself may be suitable for the cargo but this is
not enough because the cargo must also be properly
stored.
NEGLIGENCE OF CAPTAIN AND CREW
The common carrier must exercise due diligence in the
supervision of the functions of its captain and crew are
performing their functions. However, failure on the part of
the carrier in maritime commerce to provide competent
captain and crew should be distinguished from negligence
od the said captain and crew. It is important to make such
distinction because the Limited Liability Rule may in proper
cases, cover a situation involving only the negligence of
the captain or crew. Under said rule, the liability of the
shipowner may be limited to the value of the vessel. On
the other hand, if the negligence of the captain or crew
can be traced to the fact that they are really incompetent,
the Limited Liability Rule cannot be invoked because the
shipowner may be deemed negligent.
RULES ON PASSENGER SAFETY
Negligence on the part of the captain and crew as well as
the operator includes failure to comply with the
12
regulations issued by the Maritime Industry Authority
(MARINA) on the safety of the passengers.
In line with declared national policy to enhance the safety and
quality of shipping services in the interisland trade , and
consistent with the mandate to provide for the effective
supervision, regulation and rationalization of the
organizational management, ownership and operation of all
water transport utilities, as set forth under P.D. 474 and
enunciated further in E.O 125/125-A and E.O 185, Philippine-
registered vessels duly documented to carry passengers in the
domestic trade are hereby directed to observe strictly the
following: I. AREAS OF
CONCERN 1. MEANS OF ESCAPE/EMERGENCY EXITS:
a. Two means of escape/emergency exits, accessible to the
passengers, must be provided in all general areas. Pre-
designated crew member(s) must be assigned purposely to
ensure unobstructed passage to the escape/exits, in case of
emergency.
b. No locking doors giving access to the two identified means
of escape under (1) above shall be employed, except crash
doors or locking devices capable of being easily forced open in
an emergency, and a permanent/conspicuous notice to this
effect shall be posted at both sides of the door(s) exits.
c. Locking of alley/door ways during ticket
inspection/passenger counting is absolutely prohibited.
Passageways must, at all times, be cleared of any obstruction
of loose cargoes, handcarried luggage or furniture.
d. Segregation, through permanent closure of access door(s)
between different types of accommodation, i.e, first, second
and third classes, shall likewise be prohibited.
2. HANDLING/STORAGE OF HANDCARRIED LUGGAGE:
a. Safe and convenient storage for passengers’ handcarried
luggage must be provided.
b. The luggage must not, at all times, be permitted to block the
stairways, means of escape /exits, passageways and lifesaving
and firefighting equipment.
c. At least one (1) crew member shall be assigned/stationed,
during passenger embarkation and disembarkation, to caution
/ handle/supervise the storage/retrieval of handcarried
luggage.
3. STORAGE OF LIFEVESTS/LIFEJACKETS
All lifevests /lifejackets, imprinted with the vessel’s name,
must be conspicuously stored in a locker capable of being
forced open, and must be readily accessible for use, in case of
emergency.
4. CLOSURE OF WATERTIGHT DOORS, PORTHOLES, RAMPS
AND MANHOLES
The master shall ensure that all watertight doors, portholes,
ramps and manholes shall be securely
fastened/locked/checked prior to leaving port and during the
voyage.
5. WEARING OF THE PROPER PRESCRIBED UNIFORM BY THE
SHIP’S OFFICERS AND CREW.
Stephen Michael Ben
AUSL
For the purpose of easy identification and ready access by
passengers needing information/assistance, the wearing of
proper prescribed uniform and IDs by the ship’s officers and
crew, including security personnel, while they are on duty, is
strictly enjoined. 6. OTHER SAFETY MEASURES:
a. Shipping companies are directed to institutionalize a crew
and passenger safety awareness program. For this purpose, all
shipping companies/ship owners/operators are hereby
required to submit to MARINA, within 90 days from effectivity
of this Circular, their vessel emergency safety plan.
b. Vessel sketches showing the location of the liferafts/boats
and lifejackets/lifevests should be displayed in conspicuous
places in the passenger lounge(for third class accommodation)
and inside the cabin/suites(in the case of first and second class
accommodations). The liferafts/boats, imprinted with the
vessel’s name, must be properly secured and readily accessible
for use, in case of emergency
c. The prescribed location of firefighting equipment like the
fire hose, fire ax and fire extinguisher shall not be obstructed.
d. Luminous stickers indicating direction to the different exits,
which are visible in all passenger areas, shall be provided.
e. Emergency lights in all passengers accommodations,
passageways, alleyways, and stairways, which should
automatically switch on in case of power/generator failure,
must be installed.
f. Emergency exits must be provided with the
independent red blinking lights to guide/assist the
passengers on their way out, in case of emergency
II. RESPONSIBILITY OF THE MASTER It shall be the duty and
responsibility of the Master of the vessel to ensure strict
adherence to the directives of this Circular, at all times and
under penalty, as herein prescribed.
DUTY TO TAKE PROPER ROUTE
The carrier is obligated to follow the usual reasonable
commercial or customary route. If there is no evidence of
the usual route, the route is presumed to be the direct
geographical route. However, this may be modified in
many cases for navigational or other reasons.
• Improper Deviation. The Code of Commerce
provides for the following rules on the change of
route in overland transportation:
ARTICLE 359. If there is an agreement between the
shipper and the carrier as to the road over which the
conveyance is to be made, the carrier may not
change the route, unless it be by reason of
force majeure; and should he do so without this
cause, he shall be liable for all the losses which the
goods he transports may suffer from any other
13
 cause, beside paying the sum which may have been
stipulated for such case.
When on account of said cause of force majeure, the
carrier had to take another route which produced an
increase in transportation charges, he shall be
reimbursed for such increase upon formal proof
thereof.
• There was negligence on the part of the carrier
when the vessel took a short-cut route instead of
the usual route that exposed the voyage to
unexpected hazard.
TRANSSHIPMENT
It is a well-known commercial usage that transshipment of
freight without legal excuse, however competent and safe
the vessel into which the transfer is made, is a violation of
the contract and in infringement of the right of the
shipper, and subjects the carrier to liability if the freight is
lost even by a cause otherwise excepted.
Transshipment, in maritime law, is defined as “the act if
taking cargo out of one ship and loading it in another” or
“the transfer of goods from the vessel before stipulated in
the contract of affreightment to another vessel before the
place of destination names in the contract has been
reached” or “the transfer for the further transportation
from one ship or conveyance to another.”
DUTY TO INSPECT IN CARRAIGE BY SEA
The duty of the carrier to inspect the cargo and/or
baggage was explained by the Supreme Court
Saludo, Jr. vs Court of Appeals
It is the right of the carrier to require good faith on the part of
those persons who deliver goods to be carried, or enter into
contracts with it, and inasmuch as the freight may depend on
the value of the article to be carried, the carrier ordinarily has
the right to inquire as to its value. Ordinarily, too, it is the duty
of the carrier to make inquiry as to the general nature of the
articles shipped and of their value before it consents to carry
them; and its failure to do so cannot defeat the shipper's right
to recovery of the full value of the package if lost, in the
absence of showing of fraud or deceit on the part of the
shipper. In the absence of more definite information, the
carrier has a the right to accept shipper's marks as to the
contents of the package offered for transportation and is not
bound to inquire particularly about them in order to take
advantage of a false classification and where a shipper
expressly represents the contents of a package to be of a
designated character, it is not the duty of the carrier to ask for
a repetition of the statement nor disbelieve it and open the
box and see for itself. 41 However, where a common carrier has
reasonable ground to suspect that the offered goods are of a
dangerous or illegal character, the carrier has the right to
know the character of such goods and to insist on an
inspection, if reasonable and practical under the
Stephen Michael Ben
AUSL
circumstances, as a condition of receiving and transporting
such goods.42
It can safely be said then that a common carrier is entitled to
fair representation of the nature and value of the goods to be
carried, with the concomitant right to rely thereon, and
further noting at this juncture that a carrier has no obligation
to inquire into the correctness or sufficiency of such
information. 43 The consequent duty to conduct an inspection
thereof arises in the event that there should be reason to
doubt the veracity of such representations. Therefore, to be
subjected to unusual search, other than the routinary
inspection procedure customarily undertaken, there must
exist proof that would justify cause for apprehension that the
baggage is dangerous as to warrant exhaustive inspection, or
even refusal to accept carriage of the same; and it is the failure
of the carrier to act accordingly in the face of such proof that
constitutes the basis of the common carrier's liability.
INSURANCE
The R.A. 9295 otherwise known as the “Domestic Shipping
Development Act of 2004” requires compulsory coverage
for passengers and cargoes
SEC. 14. Compulsory Insurance Coverage for Passenger and
Cargo. - To meet its financial responsibility for any liability
which a domestic ship operator may incur for any breach of
the contract of carriage, every domestic ship operator shall be
required to submit annually the following;
(1) Adequate insurance coverage for each
passenger in an amount to be computer in
accordance with existing laws, rules and
regulations, and the total amount of such coverage
shall be equivalent to the total number of
passenger accommodations being offered by the
vessel;
(2) Adequate insurance coverage for cargo in an
amount to be computed in accordance with
existing laws, rules and regulations, and the total
amount of such coverage shall be equivalent to the
total cargo capacity being offered by the vessel;
and
(3) If a domestic ship operator should offer both
passenger and cargo service, then the total
insurance coverage shall be in the total sum
equivalent to that stipulated in paragraphs (1) and
(2) of this section. Provided, That if a domestic ship
operator should operate more than one (1) vessels,
the amount of insurance coverage required under
this section, for purposes of providing financial
capacity, shall be the amount equivalent to the
total number of passenger accommodations, or
total cargo capacity, or both, of the largest
operating vessel which the domestic ship operator
may have: Provided, further, That the total
insurance coverage which may be required of any
domestic ship operator shall not exceed the value
of such vessel: Provided, finally, that adequate
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 insurance coverage shall be obtained from any duly
licensed insurance company or international
protection and indemnity association.

SEC. 15. Other Insurance Coverage. - the MARINA shall have

the power to require every ship operator to obtain such other
compulsory insurance coverage necessary to adequately cover
claims for damages.

MARINA RULES

Memorandum Circular No. 40

Period of Cover.- The insurance should attach from the time

passenger sets foot on the boarding gangway or ladder leading
to the deck, continues during the entire course of the voyage
covered by the passenger ticket or coupon until the passenger
shall have left the disembarking gangway or ladder at the port
of destination.

It is understood that the insurance shall continue during the

time the vessel calls on designated or intermediate ports
provided the passenger stays on board. Should any passenger
in transit disembark at such designated or intermediate port
not his destination , the insurance shall be deemed suspended
as at the moment the passenger leaves the ladder or
disembarking gangway and shall remain suspended whilst on
land. The cover for such passenger is restored as at the
moment he sets foot on the gangway or ladder to board the
vessel.

If the passenger continues to stay on board the vessel beyond

the port of destination designated in his passenger ticket or
coupon without leave from the vessel authorities, then the
insurance shall cease , insofar as such passenger is concerned
as, the moment the vessel’s anchor is raised to commence the
voyage beyond the passenger’s destination.

In addition, if the vessel whilst at sea, sinks or has to be

abandoned because of fire, stranding, agrounding, or capsizing
or other perils at sea , the insurance shall remain in full force
until the passengers reach or are safely brought to the nearest
port of refuge or safety.

EXTRAORDINARY DILIGENCE IN CARRIAGE BY LANDS

The situation in 1969 was described by the Supreme Court:

“Vehicles have increased in number. Traffic congestion has
moved from bad to worse, from tolerable to critical. The
number of people who use thoroughfare has multiplied.:
The court observed that such condition has remained
uncheck and have reverberated to this day. Traffic jams
continue to clog the streets of Metro Manila, bringing
vehicles to a standstill at main road arteries during rush
hour traffic and sapping people’s energies and patience in
the process.

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Stephen Michael Ben
AUSL