Contract of Transportation
 Where a person obligates himself to
transport persons or property from one
place to another for a consideration.
 Carriage of passengers or carriage of
goods
 The person who obligates himself to
transport the goods or passengers may
be a common carrier or a private carrier.
Common Carrier
Article 1732. Common carriers are persons,
corporations, firms or associations engaged in
the business of carrying or transporting
passengers or goods or both, by land, water, or
air, for compensation, offering their services to
the public.
Article 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the
goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the
goods is further expressed in articles 1734, 1735, and
1745, Nos. 5, 6, and 7, while the extraordinary diligence for
the safety of the passengers is further set forth in articles
1755 and 1756.
Nueca Case
A stowaway can’t sue because he secured
passage by fraud, making him not a passenger.
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Situation
Accident happened. Victims are Barry and
Collen. Barry was a robber while Collen was the
bus driver’s mistress whose intention was to
accompany his driver boyfriend. Can Barry and
Collen sue for breach of contract of carriage?
No. Barry and Collen can’t sue breach of
contract of carriage because Barry has no
intention to be transported but only has the
intention to commit robbery. Collen’s intention
was not to be transported but to accompany
driver while working.
Article 1758. When a passenger is carried
gratuitously, a stipulation limiting the common
carrier's liability for negligence is valid, but not
for willful acts or gross negligence.
Obligations of a Common Carrier
Basic obligations
To transport the goods or passenger safely to the
agreed destination
Its duty includes:
1. To accept passengers and goods without
discrimination
2. To seasonable 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
Note: a passenger or shipper has a right against
discrimination, the right to have his goods or be
transported without delay, and the personal
right to enforce all the obligations of the carrier
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.
The rule prohibiting carriers engaged in public
transportation from selecting its passengers or
cargoes is obviously not absolute.
Common carriers can lawfully decline to accept
a particular class of goods unless it appears that
for some reason the discrimination against the
traffic in such goods is reasonable and
necessary. Mere whim or prejudice will not
suffice.
VALID GROUNDS FOR NON-ACCEPTANCE
 When the goods ought to be transported
are dangerous object or substance
including dynamites and other
explosives
 The goods are unfit for transportation
 Acceptance would result in overloading
 The goods are considered contraband or
illegal goods
 Goods are injurious to health
 Goods will be exposed to untoward
danger like flood, capture by enemies
and the like
 Goods like livestock will be exposed to
diseases
 Strike
 Failure to tender goods on time
NOTE: A common carrier may transport
hazardous substance if a certificate of public
convenience is granted to a carrier and may
include the authority to transport explosives or
dangerous chemicals. Also, if a carrier is not
properly equipped to transport dangerous
chemicals, there can be refusal to do such.
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Unfit for Transportation
Carrier may refuse to transport those which are
improperly packaged or may transport such but
merely limit its liability
Note: even if the loss, destruction, or
deterioration of the goods should be cause by
the character of the goods, or the faulty nature
of the packaging or of the containers, the
common carrier may exercise due diligence to
forestall or lessen the loss.
Duties to special classes of passengers
Carriers are mandated by law to ensure that
PWDs and senior citizens shall have equal access
to air transportation services in accordance with
the law.
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.
Reasonable time
If no period is fixed for the delivery of goods,
such will be delivered within a reasonable time.
How to determine
The expected date of arrival reflected in the Bill
of Lading may be considered. Thus, if the
estimated date of arrival is April 3 of a given year,
delay in the delivery of goods spanning a period
of more than two months is considered
unreasonable.
Note: what is considered a reasonable time may
also depend upon the nature of the goods e.g
where perishable property is received by a
common carrier at a season when a very low
temperature may be reasonably apprehended,
great diligence should use in forwarding such
property with dispatch and haste; and where, by
a delay of two or three days, the property is
damaged by freezing, the carrier may be held
liable for the damage.
Consequences of delay
Excusable delays in carriage suspend the
contract of carriage and when the cause is
removed, the master must proceed with the
voyage and make delivery.
During the detention or delay, the vessel
continues to be liable as a common carrier, not a
warehouseman, and remains duty bound to
exercise extraordinary diligence.
If delay is legally inexcusable, the following
consequences results:
1. Carrier is still liable even if natural disaster
caused the damage
2. The stipulation limiting the liability of the
carrier is inoperative
3. The carrier is liable for the damages caused by
the delay
4. The consignee may exercise his right to
abandon under the Code of Commerce (Art. 371)
DUTY TO MAKE TIMELY DELIVERY OF THE
GOODS
Right to Abandon
Code of commerce provides that in case 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 bel liable for the
total value of such good. The foregoing provision
“confers upon the consignee an exceptional but
limited right to abandon the goods transported
during the period intervening between the
moment when the fault of the carrier produces
a delay which is the generative cause of action,
until the moment just before the arrival of the
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goods at the place of delivery, by communicating
such abandonment the carrier in writing.
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 the
place of destination. The expenses which this
change of consignee occasions shall be for
account of the shipper.
To whom it is delivered
The good should be delivered to the consignee
or any other person to whom the bill of lading
was validly transferred negotiated. “Delivery
must generally be made to the owner or
consignee or to someone lawfully authorize by
him to receive the goods in his account. By
issuing a bill of lading, by stipulating delivery to
order, the ship becomes bound to deliver only to
one who has the order of the shipper; and it is no
excuse for delivery to the wrong person that the
endorse of the bill is unknown or that he delayed
presenting the bill such delivery is not
instrumental in causing the wrong delivery or
misleading the ship
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.
DELAY TO TRANSPORT THE PASSENGERS
The basic rule 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 to with reasonable
dispatch. The carrier shall be made when the
vessel or vehicle is unreasonably delayed.
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 the delivery of
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 the consignee is
required to furnish persons to assist in unloading
a shipment may not relieve the carrier of its duty
as to such unloading.
Effect of Acquittal
The acquittal of the employee of the common
carrier in the criminal case is immaterial to the
case of breach of contract., Art 31 NCC provides
that, when a civil action is based on the
obligation not arising from the act 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 culpability of the offender
will have no bearing on said independent civil
action based on an entirely different cause of
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action, culpa contractual. Thus regard less of the
employee’s acquittal or conviction I 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 the negligence in the breach of
contract cases.
Temporary unloading or Storage
Art 1737 of the NCC provides that the common
carrier’s duty to observe extraordinary diligence
over the goods remains in full force and effect
when they are temporarily unloaded and stored
in transit.
This means that the goods not yet been
delivered to the consignee and the voyage of the
carrier will resume.
Stoppage in Transitu
By way of exception under Art 1737,
extraordinary diligence need not to be exercised
over the goods that are unloaded temporarily
need not to be exercised over the goods that are
unloaded temporarily if the shipper or owner has
made use of the right of stoppage in transitu. The
right of stoppage in transitu is the right of the
unpaid seller to resume the possession of the
goods at any time while 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 parted with the
possession.
Diligence up to Delivery
The “extra-ordinary responsibility of the carrier
of the common carrier lasts until the goods are
actually or constructively delivered by the carrier
lasts to the consignee or the parson who has the
right to receive it. There is actual delivery in
contracts for the transport of goods when the
possession has been turned over the consignee
or his duty to authorized agent and a reasonable
time is given to remove goods.
EFFECTS OF STIPULATION ON EXTRAORDINARY
DILIGENCE
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 at 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 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 no stipulation lessening the utmost
diligence that is owed to the passenger. Art 1757
provides that the responsibility to observe
extraordinary or utmost diligence 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
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It is implied from Art 1758 that the extra ordinary
diligence is also required even if the passenger is
carried 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 willful 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 is requiring extraordinary diligence
owed its conception to the nature of the
business of common carriers. This business is
impressed with a special public duty.
Seaworthiness
Extraordinary diligence requires that the ship
that will transport the goods is seaworthy. SC,
“the carriers are deemed to warrant impliedly
the seaworthiness of the ship. For a vessel to be
seaworthy, it must be adequately equipped for
the voyage and manned with a sufficient number
of competent officers and crew. The failure of a
common carrier to maintain is a seaworthy
condition the vessel involved in its contract is a
clear breach of its duty prescribed in Art 1755
NCC.” Seaworthiness is that the strength,
durability and engineering skill made a part of a
ship’s construction and continued maintenance,
together with a component and sufficient crew,
which would withstand the vicissitudes and
dangers of the elements which might reasonable
to expected or encountered during her voyage
without loss or damage to her particular cargo.
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 under no obligation to
conduct an inspection of the ship and its crew;
the carrier is obligated by law to impliedly
warrant its worthiness. NCC provides for
warranty is implied because the failure of the
common carrier to maintain in seaworthy
condition the vessel involved in its contract of
carriage is a clear breach.
RA 9295
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.
No Duty to Inquire
Passengers cannot be expected to inquire every
time they board a common carrier, whether the
carrier possesses the necessary papers or that of
all carrier’s employees are qualified. Such a
practice would be an absurdity in a business
where time is the essence. Considering the
nature of transportation business, passenger
and shippers alike customarily presume that
common carrier possesses carriers possess all
the legal requisites in its operation.
Burden of Proof
Where the vessel is found unseaworthy, the ship
owner is also presumed to be negligent since it is
tasked with the maintenance of the ship. It is the
carrier that carries such burden of proving that
that ship is seaworthy. Sufficient evidence must
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be submitted and the presentation of certificates
of seaworthiness is not sufficient to overcome
the presumption of negligence.
Fitness of the Vessel Itself
It is necessary that the vessel can be expected to
be met the normal hazards of the journey. The
general tests of worthiness in this respect is
therefore whether the ship and its
appurtenances are reasonably fit to perform the
service undertaken.
Cargoworthiness
It is important, however, that the ship itself must
not only be seaworthy to undertake the voyage
but it must be also cargoworthy. It means that
the vessel must be sufficiently strong and
equipped to carry the particular carry and her
cargo must be so loaded that it is safe for her to
proceed on her voyage.
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 of a captain
is, masters and patrons of vessel is expressly
required in the Code of Commerce.
Art 609. Captains, masters or patrons of vessels
be Filipinos, have legal capacity to contract in
accordance with this 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 intrust the
navigation to a person possessing the
qualifications required by said ordinances and
regulations.
Adequate Equipment
With respect to vessels that carry passengers,
the Maritime Industry Authority prescribes the
rules that provide for indispensable equipment
and facilities. Thus, the rules include the
requirement that there are adequate exit doors,
lifeboat, 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 suitable for the cargo but it
is not enough because the cargo must also be
properly stored.
Philippine Home Assurance Corporation v CA
A small flame was detected on the acetylene
cylinder that was stored on the ship and that by
reason thereof, the same exploded despite
efforts to extinguish the fire. The Acetylene
cylinder, obviously fully loaded, was stored in
accommodation area near the engine room and
not in a storage area considerably far, and in a
safe distance, from the engine room. Moreover,
there was no showing, and the parties alleged
none, that the fine was caused by a natural
disaster or calamity not attributable to human
agency. On the contrary, there is strong evidence
indicating that the acetylene cylinder caught by
fire because of the fault and negligence of
respondent carrier, tis captain and its crew.
Negligence of captain and crew
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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
the negligence of the said captain and crew. It is
important to make that distinction because of
the limited liability rule may in proper cases,
cover a situation involving only 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 ship owner
may be deemed negligent.
RULES ON PASSENGERS SAFETY
Marina Memorandum No. 112
The carrier is bound to carry the passengers
safely as far as human care and foresight can
provide, using the utmost diligence of a very
cautious person, with due regard for all
circumstances. It is not enough that the carrier
shall exercise ordinary diligence or the diligence
of the good father of the family, but must render
service with the greatest skill and utmost
foresight.
DUTY TO MAKE A PROPER ROUTE
The carrier is obligated to follow the usual
commercial or customary route. If there is no
usual route, the route is presumed to be direct
and geographical route. However, it may be
modified in many cases for navigational or other
reasons.
CODE OF COMMERCE
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 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 will be no improper deviation if the voyage
is customarily in stages to replenish the ship’s
fuel. It may reasonable that the voyage may be
in stages to enable a ship owner to stat with fuel
sufficient foe the stage and necessarily involves
calling at a port for refueling to keep the ship
seaworthy.
Transshipment
It is 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 an infringement of the right of the
shipper, and subject the carrier to liability if the
freight is lost even by a cause otherwise
excepted.
Transshipment is an act of taking the cargo out
of one ship and loading it in another or transfer
from the vessel stipulated I the contract of
affreightment to another vessel before the place
of destination named in the contract has been
reached or the transfer further transportation
for one ship or conveyance to another.
DUTY TO INSPECT IN CARRIAGE BY THE SEA
Saludo v CA
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
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of the article to be carried, the carrier ordinarily
has the right to inquire as to its value.
In the absence of more definite information, the
carrier has the right to accept shipper’s marks as
to the contents of the package offered for the
transportation and is not bound to inquire
particularly about them in order to take
advantage of false classification and where the
shipper expressly represents the contents of the
package to be designated the character, it is not
the duty of the carrier to ask for a repetition of
the statement nor disbelieve it and open the box
to see it for itself.
EXTRAORDINARY DELIGENCE IN CARRIAGE BY
LAND
No merely a duty but also an imperative need.
Roadworthiness
Required to make sure that vehicles they are
using are in good order and condition. Explosion
of tires are not considered fortuitous even. This
is true even if it can establish that the tire that
was subject to a blowout is brand new. The duty
to exercise extraordinary diligence requires the
carrier to purchase and use vehicle parts that not
defective.
Traffic Rules
The carrier fails to exercise extraordinary
diligence if it will not comply with basic traffic
rules.
2 instance inorder for the presumption of
negligence to operate:
1. Article 2185 – there must be proof of violation
of traffic rules Article 1756 – there must be proof
of death or injury
Diligence in the Selection and Supervision
In quasi-delict, the ER can invoke the defense of
due diligence in the selection and supervision of
the EE in order to escape liability. However, such
defense is not available against the carrier
because the contract is culpa contractual.
In the discharge of the common carrier’s
commitment to ensure safety of passengers, a
carrier may choose to hire its own EEs or to avail
itself of the services of an outsider or an
independent firm to undertake the task. In either
case, the common carrier is not relieved of its
responsibility under the contract of carriage.
Duty to Inspect
There is no unbending duty to inspect each and
every package or baggage that is being brought
inside the bus or jeepney.
Nocum v. Laguna Tayabas Bus Company
When there is sufficient indication that the
representations of the passenger regarding the
nature of his baggage may not be true, in the
interest of the common safety of all, the
assistance of the police authorities may be
solicited, not necessarily to force the passenger
to open his baggage, but to conduct the needed
investigation consistent with rules of propriety
and the constitutional rights of the passenger.
Insurance
All motor vehicles must be covered by
compulsory motor vehicle liability insurance.
CARRIAGE BY TRAIN
Carrier that operates trains must diligently
exercise due diligence in the performance of its
function.
Competence EEs
The carrier must hire competence EEs. They
must be properly trainer in the operation of the
trains including in the manufacturer’s operations
instructions and other safety rules.
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The train operator is liable for breach of contract
if the negligence of the employee caused
damage to passengers. The carrier may be
responsible for the misconduct of the EE
perpetrated in his own interest, and not in that
of his ER, or not within the scope of his
employment, when the EE is clothed with the
delegated authority, and charged with the duty
by the carrier, to execute his undertaking with
the passenger.
The platform must be safe
In one case, the liability is imposed although the
inebriated victim’s death resulted because he
fought with a security guard.
Also in one case, the presence of the sacks of
melons caused the plaintiff to fall as he alighted
from the train, and that they therefore
constituted an effective legal cause of the
injuries sustained by the plaintiff. In which case,
the carrier is liable.
Maintenance of train and tracks
The common carrier has the duty to make sure
that the vehicle or the means of transportation
is in good and safe working condition. Thus, the
train operator is liable if the injuries were
sustained because of the defects in the breaks or
because of any mechanical defect in the trains.
The train operator must exercise extraordinary
diligence in the maintenance of its tracks. Thus,
liable if the train was derailed because of the
defective railroad track causing injuries to its
passengers.
The train company may also be held liable for
injuries to non-passengers.
Embarking and disembarking passengers
The exercise of extraordinary diligence is
required in the transportation of passengers
while in the train and also in giving intended
passengers reasonable opportunity to enter or
disembark from it.
In one case, the conductor of a train was
negligent for the injury sustained because of the
conductor’s pre-maturely announced the next
flag stop.
Premature acceleration of the railway car
constitutes breach of duty.
It should be noted, that a person boarding a
moving car must be taken to assume the risk of
injury from boarding the car under the
conditions open to his view, but he cannot fairly
be held to assume the risk that the motorman,
having the situation in view, will increase his
peril by accelerating the speed of the car before
he is planted safely on the platform.
Contributory negligence mitigated the liability of
the common carrier.
Negligence in the operation of the train
The railroad company may be held liable if the
accident occurred because the train was running
at an excessive speed.
Passengers who fell from the train
Presumption of negligence operated unless
overthrown with clear and convincing evidence.
Persons and properties ran over by trains
It is not the duty of the engineer (driver of the
train) to stop the train every time that he sees a
person on or near the tracks. Under the
circumstance, he is required to give warning of
his approach by blowing his whistle or ringing his
bell until he is assured that the attention of the
pedestrian has been attracted to the oncoming
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train. However, he may fairly assume that all
persons walking or standing on or near the
railroad track, except children of tender years,
are aware of the danger to which they are
exposed and that they will take reasonable
precautions to avoid accident by looking and
listening for the approach of trains, and stepping
out the way of danger when their attention is
directed to an oncoming train.
Damage to properties and persons near railroad
tracks
The railroad company must exercise due care in
preventing damage to the properties near the
tracks. It may be liable if it negligence caused the
destruction of neighboring properties through
fire.
RAILROAD CROSSING CASES
Due diligence on the part of the train operator
includes due diligence in traversing railroad
crossing and in maintaining the same.
Negligence of the operator was presumed and
was made liable for failure to rebut the
presumption.
Absence of safety devices and signs
The train operator may be held liable if it did not
ensure the safety of other through placing of
crossbars, signal lights, warning signs and other
permanent safety barriers to prevent vehicles or
pedestrians from crossing there. It is the
responsibility of the railroad company to used
reasonable care to keep the signal devise in
working order. Failure to do so would be an
indication of negligence. It is required to install
such devices only at such places when
reasonable necessary.
Speeding
Running the train at an excessive speed can be
proof of negligence. The speed must be
regulated for the safety of human life and
property.
Obligations of the 3rd persons approaching
crossings
The public and the railroad company are under
mutual obligation to exercise due care to avoid
causing or receiving injury. A railroad track is in
itself a notice of warning of danger, and that it is
the duty of all persons approaching a railroad
track or a railroad crossing to look and listen and
take every precaution before venturing upon it.
Should he fail to use his senses he is negligent
and others who have acted legally should not be
punished for his lack of care. However, this rule
does not apply when the railroad track has been
abandoned and is in fact being dismantled.
No imputed contributory negligence
Negligence of the driver cannot be imputed to
the passenger of the car. Imputed liability is
present only if the driver is the EE of the
passenger. The passenger of the car can still
recover from the railroad company despite the
negligence of the driver of the car, whose liability
if solidary as joint-tortfeasor.
PASSENGER’S BAGGAGES
Baggage include whatever article a passenger
usually takes with him for his own personal use,
comfort and convenience according to the habits
or want of the particular class to which he
belongs either with reference to his immediate
necessities or to the ultimate purpose of his
journey.
Checked-in baggage
Rules that are applicable to goods that are being
shipped are applicable to baggage delivered to
the custody of the carrier as an incident of a
contract of carriage of passenger.
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Hand carried luggage
With respect to hand carried baggage, the
passengers are duty bound to:
1. To give notice to the common carrier’s EEs, of
the effects brought the passenger
2. To take the precautions which the common
carrier or their substitutes advised relative to the
care and vigilance of their effects
The duty to exercise extraordinary diligence and
the presumption of negligence applied even for
hand carried luggage. Rules on necessary deposit
may apply but it does not mean that the carrier
is relieved from its duties.
Parties in a Carriage of Passengers
 Common Carrier
 Passenger
- One who travels in a public
conveyance by virtue of a
contract, express or implied,
with the carrier as to the
payment of fare or that which is
accepted as an equivalent
thereof. (Nueca vs. Manila
Railroad) – must have the
intention to be transported
- Still considered as such even if
he is being carried gratuitously
or under a reduced fare. This is
subject to the rule in Art. 1758
of the Civil Code that provides
that when a passenger is carried
gratuitously, a stipulation
limiting the common carrier’s
liability for negligence is valid.
The condition is that here must
be an exercise of extraordinary
diligence which was agreed in
advance (before the injury) and
must be clearly stipulated
 - There may be cases when the
party who contracted with the
carrier is not the passenger (e.g
employer may hire the services
of a bus company to ferry its
passengers to a particular
destination - bus services that
are provided by carriers in
bringing employees to and from
company premises or when a
school will hire the services of
common carrier to provide
transportation to its students
and faculty so that they can
attend an event). These are
covered by written agreements
that bind the employer or
school and the bus service
provider. Breach of the
provisions of the agreement will
entitle one party to file an
action against the other.
However, whether or not there
is a written agreement, the
carrier owes a duty of
extraordinary diligence directly
to the passengers.
Parties in a Carriage of Goods
 Shipper
- the person who delivers the goods to the
carrier for transportation
- the person who pays consideration or on
whose behalf payment is made
- freight to move
 Carrier
- moves the freight
 Consignee
- the person to whom the goods are to be
delivered.
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- may be the shipper himself as the case
where the goods will be delivered to one
of the branch office of the shipper.
However, a consignee may be a third
person who is not actually a party of the
contract.
- Receives the freight
A consignee may be bound by the agreement
between the shipper and carrier if it is stipulated
in the bill of lading. Can be ordinary diligence.
Everett Shipping vs. CA
The consignee may be deemed bound by the
terms and conditions of the bill of lading where
it was established that he accepted the same
and is trying to enforce the agreement.
MOF Co. vs. Shin Yang Brokerage
A consignee, although not a signatory of the
contract of carriage between the shipper and the
carrier, becomes a party to the contract by
reason of:
a. Relationship of agency between the consignee
and the shipper/consignee
b. The unequivocal acceptance of the bill of
lading delivered to the consignee, with full
knowledge of its contents or
c. The availment of the stipulation pour autrui,
i.e., when the consignee, a third person,
demands before the carrier the fulfillment of the
stipulation made by the consignor/shipper in the
consignee’s favor, specifically the delivery of
goods/cargoes shipped
 Perfection
Perfection of Contract of Carriage of
Passengers
Two types of carriage of passengers:
1. Contract to carry- an agreement to carry the
passenger at some future date, thus the contract
is CONSENSUAL and is perfected by mere
consent
2. Contract of carriage- should be considered a
real contract for not until the carrier is actually
used can the carrier be said to have already
assumed the obligation of carrier
Perfection of Contract of Carriage of Goods
(British Airways vs. CA)
Two types of carriage of goods:
1. Contract to carry- agreement to carry and
transport goods at a future date. CONSENSUAL
in nature, hence perfected by MERE CONSENT.
2. Contract of carriage- By the act of delivery of
the goods, that is, when goods are
unconditionally placed in the possession and
control of the carrier, and upon the receipt by
the carrier for transportation, contract of
carriage is perfected.
The test whether the relation of shipper and
carrier had been established by the shipper is if
the control and possession of the goods had
been completely surrendered by the shipper to
the carrier.
Tests to Determine if Carrier is a Carrier of
Goods
First Philippine Industrial Corp. vs. CA and
National Steel Corporation vs. CA
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First Philippine Industrial Corp. vs. CA
Tests:
1. He must be engaged in the business of carrying goods for
others as a public employment, and he must hold himself
out as ready to engage in the transportation of goods for
person generally as a business and not as a casual
occupation;
2. He must undertake to carry goods of the kind to which
his business is confined;
3. He must undertake to carry goods of the kind to which
his business is confined;
4. The transportation must be for hire.
National Steel Corp. vs. CA
The SC reiterated the ruling that the test of a
common carrier is the carriage of goods or
passengers, provided it has space for all who
opt- to The
availactual test is the
themselves of itsone provided forfor
transportation
under 1732. a fee.
-
- The tests in jurisprudences are not
absolute.
Best Test
Article 1732. Common carriers are persons,
corporations, firms or associations engaged in
the business of carrying or transporting
passengers or goods or both, by land, water, or
air, for compensation, offering their services to
the public.
- Art. 1732 of the CC doesn’t make any
distinction that’s why this is the best
test.

True Test
Sps. Perena vs. Sps. Nicolas
The true test for a common carrier is not the
quantity or extent of the business actually
transacted, or the number and character of the
conveyances used in the activity, but whether
the undertaking is a part of the activity
engaged in by the carrier that he has held out
to the general public as his business or
occupation.
If the undertaking is a single transaction, not a
part of the business or occupation engaged in,
as advertised and held out to the general public,
the individual or the entity rendering such
service is a private, not a common carrier.
Concept of Common Carriage Analogous to
Public Service
 The concept of common carrier under
Article 1732 may be seen to coincide
neatly with the notion of public service
under the Public Service Act
(Commonwealth Act No. 1416, as
amended) which at least particularly
supplements the law on common
carriers.
 Public service includes: “every person
that now or hereafter may operate,
manage, or control in the Philippines, for
hire or compensation with general or
limited clientele, whether permanent,
occasional, accidental, and done for
general business purposes.
 Any common carrier, railroad, street
railway, traction railway, subway motor
Transpo Notes (Atty. Yu)
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vehicle, either for freight or passenger,
or both, with or without fixed route.
 Whatever may be its classification,
freight, or carrier service of any class,
express service, steamboat, steamship
line, pontines, ferries and water craft.
 Engaged in the transportation of
passengers or freight, or both, shipyard,
marine, repair shop, wharf, or dock ice
plant, ice-refrigeration plant, canal,
irrigation system, gas, electric light, heat
and power, water supply and power
petroleum, sewerage system, wire or
wireless communications systems, wire
or wireless broadcasting stations and
other similar public services.
Basic Rules
Still a common carrier:
 Even if it carries persons, goods, or both
only as an ancillary activity
 Even if it offers transportation services
on an occasional, episodic, or
unscheduled time.
 Even if it offers services or solicits
business only from a narrow segment of
the general population
 Even if he did not secure a Certificate of
Public Convenience
 Even if means is not through motor
vehicle
 Even if it has no fixed and publicly known
route, maintains no terminals, and
issues no tickets
De Guzman vs. CA, 168 SCRA 612
FACTS:
Ernesto Cendana (RESPONDENT) is a junk dealer
who buys used bottles and scrap metal in
Pangasinan and would bring them to Manila for
resale, using 2 six-wheeler trucks. On the return
trip to Pangasinan, he would have a side-line of
loading his vehicles with cargo which various
merchants wanted delivered to Pangasinan. For
such service, he charged freight rates which
were commonly lower than regular commercial
rates.
One Pedro de Guzman (PETITIONER) contracted
with respondent the hauling of 750 cartons of
milk. However, only 150 boxes of milk were
delivered. The other 600 never reached
petitioner, since the truck used was hijacked by
armed men. Thus, petition filed an action for
damages. Petitioner claims that respondent
failed to exercise extraordinary diligence
required by law of a common carrier. However,
respondent denied that he was a common
carrier and claims that the loss having been due
to force majeure, he cannot be held responsible.
The trial court ruled in favor of petitioner but
upon appeal, the CA reversed the same, ruling
that respondent transported return loads of
freight as a causal occupation – a side-line to his
scrap iron business and not as a common carrier.
Hence, this appeal.
ISSUE:
1. Whether respondent is a common carrier.
2. Whether respondent is liable to pay for the
value of the undelivered merchandise.
RULING:
Whether respondent is a common carrier.
Yes. Art. 1732 provides that common carriers are
persons, corporations, firms or associations
engaged in the business of carrying or
transporting passengers or goods or both, by
land, water, or air for compensation, offering
their services to the public.
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The above article makes no distinction between
one whose principal business activity is the
carrying of persons or goods or both, and one
who does such carrying only as an ancillary
activity (in local Idiom as "a sideline"). It also
carefully avoids making any distinction between
a person or enterprise offering transportation
service on a regular or scheduled basis and one
offering such service on an occasional, episodic
or unscheduled basis. Neither does Article 1732
distinguish between a carrier offering its services
to the "general public," i.e., the general
community or population, and one who offers
services or solicits business only from a narrow
segment of the general population.
Thus, respondent is properly characterized as a
common carrier even though he merely "back-
hauled" goods for other merchants from Manila
to Pangasinan, although such back-hauling was
done on a periodic or occasional rather than
regular or scheduled manner, and even though
private respondent's principal occupation was
not the carriage of goods for others. There is no
dispute that private respondent charged his
customers a fee for hauling their goods; that fee
frequently fell below commercial freight rates is
not relevant here.
Whether respondent is liable to pay for the
value of the undelivered merchandise
No. The law provides that a common carrier will
not be allowed to divest or diminish any
responsibility even for acts of strangers like
thieves or robbers, except where such thieves or
robbers acted with grave or irresistible threat,
violence or force. In this case, armed men help
up the truck which carried the cargo. The trial
court in the criminal case for robbery filed
against the robber ruled that the accused acted
with grave, if not irresistible threat, violence or
force. The robbers not only took away the truck
and its cargo but also kidnapped the driver and
his helper.
In these circumstances, the occurrence of the
loss must reasonably be regarded as quite
beyond the control of the common carrier and
properly regarded as a fortuitous event. It is
necessary to recall that even common carriers
are not made absolute insurers against all risks
of travel and of transport of goods, and are not
held liable for acts or events which cannot be
foreseen or are inevitable, provided that they
shall have complied with the rigorous standard
of extraordinary diligence.
 Bascos vs. CA
Test to determine a CC: whether the
given undertaking is part of the business
engaged in by the carrier which he has
held out to the public as his occupation
rather than the quantity of extent of the
business transacted
No distinction whether:
- Principal or ancillary
- Offering services on a regular or
scheduled basis
- If it has general or limited
clientele
 Loadstar Shipping Co. vs. CA
It is not necessary that the carrier be issued a
certificate of public convenience, and this public
character is not altered by the fact that the
carriage of the goods in question was periodic,
occasional, episodic or unscheduled.
Article 1732. Common carriers are persons,
corporations, firms or associations engaged in
the business of carrying or transporting
passengers or goods or both, by land, water, or
air for compensation, offering their services to
the public.
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The above article makes no distinction between
one whose principal business activity is the
carrying of persons or goods or both, and one
who does such carrying only as an ancillary
activity (in local idiom, as “a sideline”’. Article
1732 also carefully avoids making any distinction
between a person or enterprise offering
transportation service on a regular or scheduled
basis and one offering such service on an
occasional, episodic or unscheduled basis.
Neither does Article 1732 distinguish between a
carrier offering its services to the “general
public,” i.e., the general community or
population, and one who offers services or
solicits business only from a narrow segment of
the general population. We think that Article
1733 deliberately refrained from making such
distinctions.
 Article 1732 makes no distinction
between one whose principal business
activity is carrying of persons or goods,
or both and one who does such carrying
only as an ancillary activity (sideline).
Article 1732 also carefully avoids many
distinctions between a person or
enterprise offering transportation
service or regular or scheduled basis and
one offering such service on an
occasional, episodic, and unscheduled
basis. Neither does Article 1732
distinguish between a carrier offering
services to the general public i.e. the
general community or population, and
one who offers services or solicits
business only from a narrow segment of
the general population.
 Therefore, a party who “back-hauled”
goods for other merchants from Manila
to Pangasinan, even when such activity
was only periodical or occasional and
was not principal line of business would
 be subject to the responsibilities and
obligations of a common carrier.
 Article 1732 does not distinguish
between one whose principal business
activity is carrying goods and one who
does such carrying only as an ancillary
activity. The contention therefore of
petitioner that is not a common carrier
but a customs broker whose principal
function is to prepare the correct
customs declaration and proper
shipping documents required by law is
bereft of merit. It suffices that petitioner
undertakes to deliver the goods for
pecuniary consideration. (Schmitz
Transport & Brokerage Corporation vs.
Transport Ventures)
 The transportation of goods is an
integral part of a customs broker; it is
also a common carrier for to declare
otherwise would be to deprive those
with whom it contracts protection
which the law affords them
notwithstanding the fact that the
obligation carry goods for its customers
is part and parcel of its business. (Calvo
vs. UCPB General Insurance Co., Inc.)
Q&A
Is a customs broker a common carrier?
Yes. Its primary function is to prepare the
correct customs declaration and proper
shipping documents. An integral part of their
job is to transport.
 Calvo vs. UCPB
A customs broker is a common carrier although
Calvo does not indiscriminately hold her services
out to the public but offers the same to select
parties with whom she may contract in the
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conduct of her business. Common carrier despite
a limited clientele.
So understood, the concept of "common carrier"
under Article 1732 may be seen to coincide
neatly with the notion of "public service," under
the Public Service Act (Commonwealth Act No.
1416, as amended) which at least partially
supplements the law on common carriers set
forth in the Civil Code. Under Section 13,
paragraph (b) of the Public Service Act, "public
service" includes:
x x x every person that now or hereafter may
own, operate, manage, or control in the
Philippines, for hire or compensation, with
general or limited clientele, whether permanent,
occasional or accidental, and done for general
business purposes, any common carrier, railroad,
street railway, traction railway, subway motor
vehicle, either for freight or passenger, or both,
with or without fixed route and whatever may be
its classification, freight or carrier service of any
class, express service, steamboat, or steamship
line, pontines, ferries and water craft, engaged
in the transportation of passengers or freight or
both, shipyard, marine repair shop, wharf or
dock, ice plant, ice- refrigeration plant, canal,
irrigation system, gas, electric light, heat and
power, water supply and power petroleum,
sewerage system, wire or wireless
communications systems, wire or wireless
broadcasting stations and other similar public
services. x x x"
 A.F. SANCHEZ BROKERAGE vs. CA
Customs broker is engaged in the business of
transportation as a common carrier as it obliges
itself to undertake to deliver goods to the
warehouse for consideration.
 Schmitz Transport And Brokerage vs.
Transport Venture
A customs broker may be regarded as a
common carrier.
Petitioner is a common carrier. For it undertook
to transport the cargoes from the shipside of
“M/V Alexander Saveliev” to the consignee’s
warehouse at Cainta, Rizal. As the appellate
court put it, “as long as a person or corporation
holds [itself] to the public for the purpose of
transporting goods as [a] business, [it] is already
considered a common carrier regardless if [it]
owns the vehicle to be used or has to hire one.”
That petitioner is a common carrier, the
testimony of its own Vice-President and General
Manager Noel Aro that part of the services it
offers to its clients as a brokerage firm includes
the transportation of cargoes reflects so.
 Westwind Shipping Corp. vs. UCPB
A customs broker has been regarded as a
common carrier because transportation of
goods is an integral part of its business. Article
1732 does not distinguish between one whose
principal business activity is the carrying of
goods and one who does such carrying only as an
ancillary activity. OFII is considered a common
carrier. As long as a person or corporation holds
itself to the public for the purpose of
transporting goods as a business, it is already
considered a common carrier regardless of
whether it owns the vehicle to be used or has to
actually hire one.
Freight Forwarder
 Phil Charter vs. M/V National Honor
Freight forwarder companies are regarded as
common carriers.
 Unsworth Transportation. vs. CA
The term “freight forwarder” refers to a firm
holding itself out to the general public (other
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than as a pipeline, rail, motor, or water carrier)
to provide transportation of property for
compensation and, in the ordinary course of its
business, (1) to assemble and consolidate, or to
provide for assembling and consolidating,
shipments, and to perform or provide for break-
bulk and distribution operations of the
shipments; (2) to assume responsibility for the
transportation of goods from the place of receipt
to the place of destination; and (3) to use for any
part of the transportation a carrier subject to the
federal law pertaining to common carriers.
A freight forwarder’s liability is limited to
damages arising from its own negligence,
including negligence in choosing the carrier;
however, where the forwarder contracts to
deliver goods to their destination instead of
merely arranging for their transportation, it
becomes liable as a common carrier for loss or
damage to goods. A freight forwarder assumes
the responsibility of a carrier, which actually
executes the transport, even though the
forwarder does not carry the merchandise itself.
Limited Clientele Not a Defense
Facts: Petitioner entered into a contract with
SMC for the transfer of paper and kraft board
from the port and to SMC’s warehouse.
Held: She is still a common carrier although she
does not indiscriminately hold her services out to
the public but offers the same to select parties
with whom she may contract in the conduct of
her business. (Calvo vs. UCPB General Insurance
Co.)
Phil. American General Insurance Company, et.
al. vs. PKS Shipping Company, GR No. 149038
Facts: Respondent shipping company
transported 75,000 bags of cement to petitioner
in its barge. The bags of cement perished after
its barge sank while being towed by a tug boat.
Held: Respondent is a common carrier because it
was engaged in the business of carrying goods
for others for a fee. The regularity of its activities
in the area indicates more than just a casual
activity on its part. Neither can the concept of
common carrier change merely because
individual contracts are executed or entered into
with the patrons of the carrier.
 Although the clientele is limited, the
regularity of the activities of a carrier
may indicate that it is a common carrier.
A public utility may not evade control
and supervision of its operation by the
government by selecting its customers
aunder the guise of private transactions.
 In Sps. Perena vs. Sps. Nicolas, the Court
concluded that petitioners as the
operators of a school bus service were:
(a) engaged in transporting passengers
generally as a business, not just a casual
occupation (b) undertaking to carry
passengers over established roads by
the method by which the business was
conducted and (c) transporting students
for a fee. The petitioners operated as a
common carrier because they held
themselves out as a ready
transportation indiscriminately to the
students of a particular school living
within or near where the operated the
service and for a fee.
No Fixed Route, No Terminal, No Ticket Issued
Not a Defense
Facts: Petitioner is involved in the business of
carrying goods through its barges. It has no fixed
and public known route, maintains no terminals,
and issues no tickets.
Held: Petitioner is still a common carrier because
principal business is that of a lighterage and
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drayage and offers its barges to the public for
carrying or transporting by water for
compensation. (Asia Lighterage and Shipping Inc.
vs. CA)
Korean Airlines vs. CA
There is a perfected contract of carriage
between a passenger and airline even if it was
established that the passenger had checked in
at the departure counter, passed through
customs and immigration, boarded the shuttle
bus and proceeded to the ramp of the aircraft.
It was also established that his baggage had
already been loaded in the aircraft to be flown
with the passenger to his destination.
Q&A
Is a ticket an important element to carriage of
passengers?
No. Even if there is no ticket but there was
meeting of the minds of the consideration and
subject matter (perfected) because it is a
consensual contract perfected by mere
consent.
 Written contract is not essential. The
presence of a ticket or a bill of lading (a
detailed list of a shipment of goods in
the form of a receipt given by the carrier
to the person consigning the goods) or
any written contract is not necessary for
the perfection of the contract of
carriage. The code does not demand, as
necessary requisite in the contract of
transportation, the delivery of the bill of
lading to the shipper, but gives right to
both the carrier and the shipper to
mutually demand of each other the
delivery of said bill.

Aircraft
There is a perfected contract to carry passengers
even if no tickets have been issued to said
passengers so long as there was already a
meeting of minds with respect to the subject
matter and the consideration.
Korean Airlines vs. CA
There is a perfected contract of carriage
between a passenger and airline even if it was
established that the passenger had checked in at
the departure counter, passed through customs
and immigration, boarded the shuttle bus and
proceeded to the ramp of the aircraft. It was also
established that his baggage had already been
loaded in the aircraft to be flown with the
passenger to his destination.
Buses, Jeepneys, and Street Cars
Dangwa Transportation Co. vs. CA
FACTS:
Pedro Cudiamat (victim) was trying to board the
bus owned by Dangwa Corp. Inc. while he did so,
the bus was at a full stop (as found by the CA and
as was upheld by SC) and it was this precise
moment where a certain Ms. Abenoja alighted
from the same. He indicated his intention to
board the bus. When he was on board, Cudiamat
was closing his umbrella at the platform of the
bus when the latter made a sudden jerk
movement when the driver prematurely
stepped on the accelerator and did not wait for
Cudiamat to first secure his seat especially so
when the platform of the bus was at that time
slippery and wet because of a drizzle. After the
premature acceleration, Cudiamat fell from the
platfrom and was ran over by the rear right tire
of the bus.
So the spouse of Pedrito, together with his heirs
sued for damages.
Transpo Notes (Atty. Yu)
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On the other hand, Dangwa Corp. maintained
that they had observed and continued to
observe the extraordinary diligence required in
the operation of the transportation company
and the supervision of the employees, even as
they add that they are not absolute insurers of
the safety of the public at large. Further, it was
alleged that it was the victim's own carelessness
and negligence which gave rise to his own death
for lack of an intention to board the bus.
ISSUE:
Are Dangwa and Theodore liable?
RULING:
YES. By the contract of carriage, the carrier
assumes the express obligation to transport the
passenger to destination safely and to observe
extraordinary diligence with a due regard for all
the circumstances, and any injury that might be
suffered by the passenger is right away
attributable to the fault or negligence of the
carrier. This is an exception to the general rule
that negligence must be proved, and it is
therefore incumbent upon the carrier to prove
that it has exercised extraordinary diligence.
When the bus is not in motion there is no
necessity for a person who wants to ride the
same to signal his intention to board. A public
utility bus, once it stops, is in effect making a
continuous offer to bus riders. The victim herein,
by stepping and standing on the platform of the
bus, is already considered a passenger and is
entitled to all the rights and protection
pertaining to such a contractual relation.

Dangwa Transportation Co. vs. CA
Once a public utility bus stops, it is in effect
making a continuous offer to bud riders
(continuing offer rule). Hence it is the duty of
the drivers 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 of the carrier. Liability of the carrier
is already based on contract. It follows that the
passenger is deemed to be accepting the offer
is he is already attempting to board the
conveyances and the contract of carriage is
perfected from that point.
 Thus, one is not a passenger when one
is a:
1. Stow away
2. The driver did not consent or had no
knowledge of the presence of the
person.
 Common carrier (jeepney): operator
 If there is extraordinary diligence
exercised with passenger’s negligence,
common carrier’s liability is
extinguished.
 If not with extraordinary diligence and
there is passenger’s negligence, there is
a mitigated liability upon the common
carrier
 Test of liability: Bona fide intention to
use the carrier and sufficient care
Trains
LRTA vs. Navidad
FACTS:
Nicanor Navidad entered the EDSA LRT station
drunk, after purchasing a token around 7pm.
Transpo Notes (Atty. Yu)
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While he was standing on the platform near the
LRT tracks, a security guard assigned in the area
approached him. An altercation between the
two ensued that led to a fist fight, where Navidad
fell on the LRT tracks at the exact moment an LRT
train was coming in. He was struck by the moving
train and killed instantaneously.
His widow along with the children filed a
complaint for damages against the security
guard, the operator of the LRT Train which ran
over Navidad, the LRTA, the Metro Transit Org
and Prudent Security for the death of her
husband. The Trial Court rendered a ruling
against security agency and the security guard.
However, on appeal, the CA exonerated them
and instead held the LRTA and the operator of
the train liable.
ISSUE:
Whether or not there was a perfected contract
of carriage between Navidad and LRTA.
RULING:
Yes. A contract of carriage was deemed created
from the moment Navidad paid the fare at the
LRT station and entered the premises of the
latter, entitling Navidad to all the rights and
protection under a contractual relation. The
appellate court had correctly held LRTA and
Roman liable for the death of Navidad in failing
to exercise extraordinary diligence imposed
upon a common carrier. While the deceased
might not have then as yet boarded the train, a
contract of carriage theretofore had already
existed when the victim entered the place where
passengers were supposed to be after paying the
fare and getting the corresponding token
therefor.
The law requires common carriers to carry
passengers safely using the utmost diligence of
very cautious persons with due regard for all
circumstances. Such duty of a common carrier to
provide safety to its passengers so obligates it
not only during the course of the trip but for so
long as the passengers are within its premises
and where they ought to be in pursuance to the
contract of carriage. The statutory provisions
render a common carrier liable for death of or
injury to passengers (a) through the negligence
or willful acts of its employees or b) on account
of willful acts or negligence of other passengers
or of strangers if the common carrier’s
employees through the exercise of due diligence
could have prevented or stopped the act or
omission.
In case of such death or injury, a carrier is
presumed to have been at fault or been
negligent, and by simple proof of injury, the
passenger is relieved of the duty to still establish
the fault or negligence of the carrier or of its
employees and the burden shifts upon the
carrier to prove that the injury is due to an
unforeseen event or to force majeure. The
liability of the common carrier and that of the
independent contractor is solidary.
LRTA vs. Navidad
A person who wants to board a train in a railway
station must purchase a ticket and must present
himself at the proper place in a proper manner
to be transported. Such person must have a
bona fide intention to use the facilities of the
carrier, possess sufficient fare with which to pay
for his passage and present himself to the
carrier for transportation in the place and
manner provided.
 (TIPS):
1. Must purchase a ticket;
2. Present himself at the proper place
and in a proper manner for
transportation
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3. With the bona fide intention to use
the facilities of the carrier; and
4. Possess sufficient fare (LRTA v.
Navidad)
RAMOS, ET. AL VS. CHINA SOUTHERN AIRLINES
CO. LTD.
A contract of carriage arises when an airline
issues a ticket to a passenger confirmed on a
particular flight, on a certain date and the
passenger has every right to expect that he
would fly on that flight and on that date,
otherwise, the carrier opens itself to a suit for
breach of contract of carriage.
SPS. FERNANDO vs. NORTHWEST AIRLINES, INC.
In an action based on a breach of contract of
carriage, the aggrieved party does not have to
prove that the common carrier was at fault or
was negligent. All that he has to prove is the
existence of the contract and the fact of its non-
performance by the carrier.
Means of Transportation Not Material
Issue: Are pipeline operators common carrier as
to subject them to business taxes on common
carrier? (First Philippine Industrial Corp. vs. CA)
Held: Yes. The Civil Code (Art. 1732) makes no
distinction as to the means of transporting, as
long as it is by land, water, or air. It does not
provide that the transportation of the
passengers or goods should be by motor vehicle.
In fact, in the US, oil pipeline vendors are
considered common carriers. Also under the
Petroleum Act of the Philippines (RA 387) -
pipeline concessionaire as common carrier. (First
Philippine Industrial Corp. vs. CA). It is further
categorized a common carrier under BIR Ruling
69-83.
Not common carrier by law
Under RA 10668 (AN ACT ALLOWING FOREIGN
VESSELS TO TRANSPORT AND CO-LOAD FOREIGN
CARGOES FOR DOMESTIC TRANSSHIPMENT AND
FOR OTHER PURPOSES), foreign vessles engaging
in carriage conducted in accordance with the
said law shall not be considered common
carriers under the New Civil Code; they are also
not offering a public service and thus shall fall
outside the coverage of Domestic Shipping Devt.
Act of 2004.
Are distributors of Electricity Common
Carriers?
Answer: RA 9136 (An Act Ordaining Reforms in
the Electric Power Industry):
Sec. 22 – Distribution Sector – The distribution of
electricity to end-users shall be regulated
common carrier business requiring a national
franchise. Distribution of electric power to all
end-users may be undertaken private
distribution utilities, cooperatives, local
government units presently undertaking this
function, and other authorized entities, subject
to regulation by ERC.
Even if He Did Not Secure a CPC
A certificate of public convenience is not a
requisite for the incurring of liability under the
Civil Code provisions governing common
carriers. That liability arises the moment a
person or firm acts as a common carrier, without
regard to whether or not such carrier has also
complied with the requirements of the
applicable regulatory statute and implementing
regulations and has been granted a certificate of
public convenience or other franchise. (De
Guzman vs. Cendana)
Art. 1734. Common carriers are responsible for
the loss, destruction, or deterioration of the
goods, unless the same is due to any of the
following causes only:
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1) Flood, storm, earthquake, lightning, or other
natural disaster or calamity
2) Act of the public enemy in war, whether
international or civil
3) Act or omission of the shipper or owner of the
goods
4) The character of the goods or defects in the
packing or in the containers
5) Order or act of competent public authority
Under Art. 1735(6), a CC is held responsible and
will not be allowed to divest or diminish such
responsibility – even for acts of strangers like
thieves or robbers, except where such thieves
and robbers in fact acted with grave or
irresistible threat, force or violence.
Moreover, even if transportation of goods was
ancillary to the main business of buying and
selling used bottles and scrap metals, the Court
considered private respondent a common
carrier.
You have to comply with strict requirements in
securing for a CPC.
If Government-owned…
it doesn’t mean it is a private carrier. Art. 1732 of
the Civil Code doesn’t distinguish if government-
owned or not. If the means is for transport with
fee, it is a common carrier.
Charter Party
 A contract by which an entire ship or
some principal part thereof is letting the
owner to another for a specified time or
use.
 Contract of Affreightment – owner of a
ship or another vessel lets the whole or
part of her to a merchant or another
person for the conveyance of goods, on
a particular voyage, in consideration of
the payment of freight.
  Charter by Demise or Bareboat Charter –
whole vessel is let to charterer with a
transfer to him of its entire command
and possession consequent control over
its navigation, including the master and
the ones who are his servants.
 Lea Mer Industries vs. Malayan
Inusrance
Common carriers are persons,
corporations, firms or associations
engaged in the business of carrying or
transporting passengers or goods, or
both -- by land, water, or air -- when this
service is offered to the public for
compensation.
Petitioner is clearly a common carrier,
because it offers to the public its
business of transporting goods through
its vessels.
Thus, the Court corrects the trial court’s
finding that petitioner became a private
carrier when Vulcan chartered it.
Charter parties are classified as
contracts of demise (or bareboat) and
affreightment, which are distinguished
as follows:
“Under the demise or bareboat charter
of the vessel, the charterer will generally
be considered as owner for the voyage
or service stipulated. The charterer
mans the vessel with his own people and
becomes, in effect, the owner pro hac
vice, subject to liability to others for
damages caused by negligence. To
create a demise, the owner of a vessel
must completely and exclusively
relinquish possession, command and
navigation thereof to the charterer;
anything short of such a complete
transfer is a contract of affreightment
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(time or voyage charter party) or not a
charter party at all.”
The distinction is significant, because a
demise or bareboat charter indicates a
business undertaking that is private in
character. Consequently, the rights and
obligations of the parties to a contract of
private carriage are governed principally
by their stipulations, not by the law on
common carriers.
The Contract in the case was one of
affreightment, as shown by the fact that
it was petitioner’s crew that manned the
tugboat M/V Ayalit and controlled the
barge Judy VII. Necessarily, petitioner
was a common carrier, and the pertinent
law governs the present factual
circumstances.
 Loadstar Shipping vs. Pioneer Asia
On the first and second issues, petitioner
contends that at the time of the voyage the
carriers voyage-charter with the shipper
converted it into a private carrier. Thus, the
presumption of negligence against common
carriers could not apply. Petitioner further avers
that the stipulation in the voyage-charter
holding it free from liability is valid and binds the
respondent. In any event, petitioner insists that
it had exercised extraordinary diligence and that
the proximate cause of the loss of the cargo was
a fortuitous event.
Article 1732 of the Civil Code defines a common
carrier as follows:
Article 1732. Common carriers are persons,
corporations, firms or associations engaged in
the business of carrying or transporting
passengers or goods or both, by land, water, or
air, for compensation, offering their services to
the public.

Petitioner is a corporation engaged in the
business of transporting cargo by water and for
compensation, offering its services
indiscriminately to the public. Thus, without
doubt, it is a common carrier. However,
petitioner entered into a voyage-charter with
the Northern Mindanao Transport Company, Inc.
Now, had the voyage-charter converted
petitioner into a private carrier?
We think not. The voyage-charter agreement
between petitioner and Northern Mindanao
Transport Company, Inc. did not in any way
convert the common carrier into a private
carrier.
Conformably, petitioner remains a common
carrier notwithstanding the existence of the
charter agreement with the Northern Mindanao
Transport Company, Inc. since the said charter is
limited to the ship only and does not involve
both the vessel and its crew.
 Cebu Salvage Corp vs. Phil. Home
Assurance
Petitioner was the one which contracted with
MCCII for the transport of the cargo. It had
control over what vessel it would use. All
throughout its dealings with MCCII, it
represented itself as a common carrier.
The fact that it did not own the vessel it decided
to use to did not negate its character and duties
as a common carrier. The MCCII (respondent’s
subrogor) could not be reasonably expected to
inquire about the ownership of the vessels which
petitioner carrier offered to utilize.
As a practical matter, it is very difficult and often
impossible for the general public to enforce its
rights of action under a contract of carriage if it
should be required to know who the actual
owner of the vessel is. In fact, in this case, the
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voyage charter itself denominated petitioner as
the “owner/operator” of the vessel.
While it is true that the BOL may serve as a
contract of carriage between the parties, it
cannot prevail over the express provision of
voyage charter that MCCII and petitioner
executed
Contract of Affreightment
 Time Charter – vessel is leased to the
charterer for a fixed period of time
 Voyage Charter – ship is leased for a
single voyage
 Federal Phoenix Assurance Corp. vs.
Fortune Carrier
Time and again, this Court have ruled
that "[i]n determining the nature of a
contract, courts are not bound by the
title or name given by the parties. The
decisive factor in evaluating an
agreement is the intention of the
parties, as shown, not necessarily by the
terminology used in the contract but by
their conduct, words, actions and deeds
prior to, during and immediately alter
executing the agreement.
As correctly observed by the CA, the
Time Charter Party agreement executed
by Fortune Sea and Northern Transport
clearly shows that the charter includes
both the vessel and its crew thereby
making Northern Transport the owner
pro hac vice of M/V Ricky Rey during the
whole period of the voyage.
M/V Ricky Rey was converted into a
private carrier notwithstanding the
existence of the Time Charter Party
agreement with Northern Transport
since the said agreement was not limited
to the ship only but extends even to the
control of its crew. Despite the
 denomination as Time Charter by the
parties, their agreement undoubtedly
reflected that their intention was to
enter into a Bareboat Charter
Agreement.
The master and all the crew of the ship
were all made subject to the direct
control and supervision of the charterer.
In fact, the instructions on the voyage
and other relative directions or orders
were handed out by Northern Transport.
Thus, the CA correctly ruled that the
nature of the vessel's charter is one of
bareboat or demise charter out by
Northern Transport. Thus, the CA
correctly ruled that the nature of the
vessel's charter is one of bareboat or
demise charter.
What is the effect if a common carrier enters
into a charter party? – YOU HAVE TO QUALIFY
USING PLANTERS CASE
Planters Product vs. CA
A "charter-party" is defined as a contract by
which an entire ship, or some principal part
thereof, is let by the owner to another person for
a specified time or use; a contract of
affreightment by which the owner of a ship or
other vessel lets the whole or a part of her to a
merchant or other person for the conveyance of
goods, on a particular voyage, in consideration of
the payment of freight;
Charter parties are of two types:
(a) contract of affreightment which
involves the use of shipping space on
vessels leased by the owner in part or as
a whole, to carry goods for others; and,
(b) charter by demise or bareboat
charter, by the terms of which the whole
vessel is let to the charterer with a
transfer to him of its entire command
and possession and consequent control
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over its navigation, including the master
and the crew, who are his servants.
Contract of affreightment may either be time
charter, wherein the vessel is leased to the
charterer for a fixed period of time, or voyage
charter, wherein the ship is leased for a single
voyage. In both cases, the charter-party provides
for the hire of vessel only, either for a
determinate period of time or for a single or
consecutive voyage, the shipowner to supply the
ship's stores, pay for the wages of the master
and the crew, and defray the expenses for the
maintenance of the ship.
Upon the other hand, the term "common or
public carrier" is defined in Art. 1732 of the Civil
Code. The definition extends to carriers either by
land, air or water which hold themselves out as
ready to engage in carrying goods or
transporting passengers or both for
compensation as a public employment and not
as a casual occupation. The distinction between
a "common or public carrier" and a "private or
special carrier" lies in the character of the
business, such that if the undertaking is a single
transaction, not a part of the general business or
occupation, although involving the carriage of
goods for a fee, the person or corporation
offering such service is a private carrier.
 If only by contract of affreightment,
whether voyage or time charter, it
remains a common carrier.
 If by bareboat or demise charter, a
common carrier is transformed into a
private carrier.
Distinguish a Common Carrier from a Private
Carrier – TAKE NOTE!
 Common Carrier Private Carrier / Under American jurisprudence, a common
Special Carrier carrier undertaking to carry a special cargo
Holds himself out in Agrees in some spcial or chartered to a special person only,
common, that is, to case with some becomes a private carrier. As a private
all persons who private individual to carrier, a stipulation exempting the owner
choose to empty him, carry for hire from liability for the negligence of its agent
ready to carry for hire is not against public policy, and is deemed
Bound to carry for all Not bound to carry valid.
who offer such goods for any reason, unless
as accustomed to it enters a special The Civil Code provisions on common
carry and tender agreement to do so carriers should not be applied where the
reasonable carrier is not acting as such but as a private
compensation for carrier. The stipulation in the charter party
carrying them absolving the owner from liability for loss
Subject to regulation Not subject to due to the negligence of its agent would be
as it is a public service
regulation as it is not void only if the strict public policy governing
a public service common carriers is applied. Such policy has
Bound to exercise Owes only diligence no force where the public at large is not
extraordinary of a good father of a involved, as in the case of a ship totally
diligence family (OBLICON chartered for the use of a single party.
applies as legal basis)
Cannot stipulate that May validly enter into  National Steel Corp vs. CA
it is exempt from such stipulation.
liability for the The vessel involved, the M/V Vlasons I,
negligence of its rendered tramping service and as such, does
agents or employees. not transport cargo or shipment for the
Such stipulation is general public. Its services are available only
void as it is against to specific persons who enter into a special
public policy. contract of charter party with its owner.

"Generally, private carriage is undertaken by

 The distinction between a common
carrier and private carrier lies in the
character of the business, such that if
the undertaking is a single transaction,
not a part of a general business or
occupation, although involving the
carriage of the goods for a fee, the
person or corporation offering such
service is a private carrier.
special agreement and the carrier does not
hold himself out to carry goods for the
general public. The most typical, although
not the only form of private carriage, is the
charter party, a maritime contract by which
the charterer, a party other than the
shipowner, obtains the use and service of all
or some part of a ship for a period of time or
a voyage or voyages."

 Home Insurance Co vs. American Other important pronouncements:

Steamship Agencies It follows that while a common carrier is
bound to exercise extraordinary diligence, a
private carrier owes only diligence of a good

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 father of a family. Moreover while a
common carrier cannot stipulate that it is
exempt from liability for the negligence of
its agents or employees, a private carrier
may validly enter into such stipulation. The
stipulation involving a common carrier is
void for being contrary to public policy.
Because the MV Vlasons I was a private
carrier, the shipowner's obligations are
governed by the foregoing provisions of the
Code of Commerce and not by the Civil Code
which, as a general rule, places the prima
facie presumption of negligence on a
common carrier.
 Valenzuela Hardwood Supply vs. CA
In a contract of private carriage, the
parties may validly stipulate that
responsibility for the cargo rests solely
on the charterer, exempting the
shipowner from liability for loss of or
damage to the cargo caused even by the
negligence of the ship captain.
Pursuant to Article 1306 of the Civil
Code, such stipulation is valid because it
is freely entered into by the parties and
the same is not contrary to law, morals,
good customs, public order, or public
policy. Indeed, their contract of private
carriage is not even a contract of
adhesion.
We stress that in a contract of private
carriage, the parties may freely stipulate
their duties and obligations which
perforce would be binding on them.
Unlike in a contract involving a common
carrier, private carriage does not involve
the general public. Hence, the stringent
provisions of the Civil Code on common
carriers protecting the general public
cannot justifiably be applied to a ship
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transporting commercial goods as a
private carrier.
Q&A
Is a driver of a common carrier liable?
If he committed a crime, he is liable under
criminal law (delict). If the issue is on
negligence, quasi-delict (culpa aquiliana / tort).
No contract between the passenger and the
driver. No privity of contract because the driver
is outside of the contract. The driver is
criminally liable for reckless imprudence
resulting to damage of property. The operator
is civilly liable only.
 A particular event may arise to tort or
breach of contract.
 Fabre Jr. vs. CA
Taking the children to and from the
school is public transportation and the
petitioners being the carrier are
considered common carriers and are
held liable for the injuries incurred on
the children due to the negligence of the
driver.
Trucking Service
 Engaged in the business of transporting
goods by land
 A common carrier if there is no
indication that the undertaking in the
contract between the carrier and the
other party that the same was private in
character, or if there was no showing
that the service was solely and
exclusively rendered to such party.
(Loadmaster Customs Services, Inc. vs.
Glodel Brokerage)
 Problem
GPS, as the exclusive hauler of Concepcion
Industries, undertook to deliver 30 units of
Condura refrigerators from latter’s place in
Alabang to Dagupan City. While the truck was
traversing to the north diversion road along
McArthur Highway in Barangay Anupa, Bamba,
Tarlac, it collided with an unidentified truck,
causing it to dive into a deep canal, resulting in
damage to the cargoes. Petitioner as subrogee to
Concepcion Industries filed a complaint for
damage and breach of contract of carriage
against GPS and its driver.
Issue: Is GPS a common carrier?
Answer: GPS, being an exclusive contractor and
hauler of Concepcion Industries, Inc. rendering
or offering its services to no other individual or
entity, cannot be considered a common carrier.
In culpa contractual, upon which the action of
the petitioner rests as being the subrogee of
Concepcion Industries, Inc., the mere proof of
the existence of the contract and the failure of
its compliance justify, prima facie, a
corresponding right of relief.
A breach upon the contract confers upon the
injured party a valid cause for recovering that
which may have been lost or suffered.
The remedy serves to preserve the interests of
the promise that may include his:
Expectation interest – which is his interest in
having the benefit of his bargain by being put in
as good a position as he would have been in had
the contract been performed;
Reliance interest - which is his interest in being
reimbursed for loss caused by reliance on the
contract by being put in as good a position as he
would have been had the contract not been
made
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Restitution interest – which is his interest in
having restored to him any benefit that he has
conferred on the other party
The effect of every infraction is to create a new
duty, that is, to make recompense as to the one
who has been injured by the failure of another to
observe his contractual obligation unless he can
show extenuating circumstances, like proof of
his exercise of due diligence (normally that of the
diligence of a good father of a family or,
exceptionally by stipulation or by law such as in
the case of common carriers, that of
extraordinary diligence)or of the attendance of
fortuitous event, to excuse him from his ensuing
liability.
In this case, the delivery of the goods in its
custody to the place or destination – gives rise to
a presumption of lack of care and corresponding
liability on the part of the contractual obligor the
burden being on him to establish otherwise. GPS
has failed to do so.
Respondent driver, on the other hand, without
concrete proof of his negligence or fault, may not
himself be ordered to pay petitioner.
The driver, not being a party to the contract of
carriage between petitioner’s principal and
defendant, may not be held liable under the
agreement.
A contract can only bind the parties who have
entered into it or their successors who have
assumed their personality or their juridical
position.
Consonantly with the axiom res inter alios acta
aliis neque nocet prodest, such contract can
neither favor nor prejudice a third person.
Petitioner’s civil action against the driver can
only be based on culpa aquiliana, which, unlike
culpa contractual, would require the claimant for
damages to prove negligence or fault on the part voyage without
of the defendant. (FGU Insurance vs. G.P. reference to any
Sarmiento Trucking) circumstances of
danger. It is usually
 An event may lead to a tort or to a confined to vessels
breach of contract. that have received no
 Art. 3135 – if something happens and injury or damage.
carrier is violating traffic regulation
(private or common), there is
Arrastre
presumption of negligence
Diligence is akin to a
 The victim must prove breach of common carrier but
contract or negligence. (if private NOT a common
carrier) carrier
 Presumed negligent so claiming party Responsibility lasts
must prove negligence. Claiming party until delivery of
must prove that there is contract of goods to consignee
transportation and that Parties: Government
injury/death/loss occurred during the arrastre operator, 3rd
existence of the contract. (if common party beneficiary
carrier) The functions of an
arrastre operator
usually include the
following:
Common Carriage Distinguished from Other 1. Receive, handle,
Contracts care for, and deliver
all merchandise
imported and
Towage exported, upon or
One vessel is hired to passing over
bring another vessel Government-owned
to another place. and wharves and
Thus, a tugboat may piers
be hired by a 2. Record or check all
common carrier to merchandise which
bring the vessel to a may be delivered to
port. In this case, the said port at shipside,
operator of a tugboat and in general and;
cannot be 3. Furnish light and
considered a water services and
common carrier. other incidental
A service rendered to services in order to
a vessel by towing for undertake its arrastre
the mere purpose of service.
expediting her

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 Hence, the functions due to its negligence or of its employees, and
of an arrastre must prove that it exercised due care in handling
operator has nothing the goods.
to do with the trade
and business of  ASIAN TERMINALS, INC. vs. ALLIED
navigation, nor to use GUARANTEE INSURANCE CO., INC.
or operation of
vessels. Since the relationship of an arrastre operator
Both as to the nature and a consignee is akin to that between a
of the functions and warehouseman and a depositor, then, in
the place of the instances when the consignee claims any loss,
performance (upon the burden of proof is on the arrastre operator
wharves and piers to show that it complied with the obligation to
shipside), the arrastre deliver the goods and that the losses were not
operator’s services due to its negligence or that of its employees.
are clearly not
maritime. A mere sign-off from the customs broker's
They are in fact no representative that he had received the subject
different from those shipment "in good order and condition without
of a depositary or exception" would not absolve the arrastre from
warehouseman. liability, simply because the representative's
Even if the arrastre signature merely signifies that said person
service depends on, thereby frees the arrastre from any liability for
assists, or further loss or damage to the cargo so withdrawn while
maritime the same was in the custody of such
transportation, it may
representative to whom the cargo was released,
be deemed merely
but it does not foreclose the remedy or right of
incidental and does
not make its services the consignee (or its subrogee) to prove that any
maritime. loss or damage to the subject shipment occurred
while the same was under the custody, control
and possession of the arrastre operator.
 MARINA PORT SERVICES, INC. vs.
AMERICAN HOME ASSURANCE CORP. Stevedoring
The diligence
The relationship between an arrastre operator required of a
and a consignee is similar to that between a stevedoring is the
warehouseman and a depositor, or to that diligence of a goods
father of a family.
between a common carrier and the consignee
Not a common
and/or the owner of the shipped goods. Thus, in
carrier for it does not
the performance of its obligations, an arrastre
transport goods or
operator should observe the same degree of passengers; it is not
diligence as that required of a common carrier akin to a
and a warehouseman. Accordingly, an arrastre warehouseman for it
operator must prove that the losses were not
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 does not store goods In contrast, the object
for profit. of the contract with a
The loading and common carrier is
stowing of cargoes transportation. The
would not have a far- contract between the
reaching public travel agency is a
ramification as that of contract of service
a common carrier and and not a contract of
a warehouseman; the carriage. (Crisostomo
public is adequately vs. CA)
protected by our laws
on contract and
quasi-delict.  Crisostomo vs. CA
The public policy
considerations in Traveling agency is not a common or private
legally imposing upon carrier.
a common carrier or a
warehouseman a It is obvious from the above definition that
higher degree of respondent is not an entity engaged in the
diligence is not business of transporting either passengers or
present in a goods and is therefore, neither a private nor a
stevedoring outfit common carrier. Respondent did not undertake
which mainly to transport petitioner from one place to
provides labor in another since its covenant with its customers is
loading and stowing simply to make travel arrangements in their
of cargoes for its behalf. Respondent’s services as a travel agency
clients. include procuring tickets and facilitating travel
permits or visas as well as booking customers for
tours.

While petitioner concededly bought her plane

Travel Agency ticket through the efforts of respondent
Not a common company, this does not mean that the latter ipso
carrier but a contract facto is a common carrier. At most, respondent
of service. The object acted merely as an agent of the airline, with
of contractual whom petitioner ultimately contracted for her
relation of a person carriage to Europe. Respondent’s obligation to
who purchases a petitioner in this regard was simply to see to it
ticket through a that petitioner was properly booked with the
travel agency is only airline for the appointed date and time. Her
the agency’s service transport to the place of destination,
of arranging and meanwhile, pertained directly to the airline.
facilitating the
booking, ticketing, The object of petitioner’s contractual relation
and accommodation with respondent is the latter’s service of
in a package tour. arranging and facilitating petitioner’s booking,
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ticketing and accommodation in the package
tour. In contrast, the object of a contract of
carriage is the transportation of passengers or
goods. It is in this sense that the contract
between the parties in this case was an ordinary
one for services and not one of carriage.
Petitioner’s submission is premised on a wrong
assumption.
 SPS. CRUZ vs. SUN HOLIDAYS, INC.
The operator of a beach resort that accepts
clients by virtue of tour package-contracts that
included transportation to and from the Resort
and the point of departure is considered a
common carrier. Its ferry service is so
intertwined with its main business as to be
properly considered ancillary thereto.”
Note: beach resorts cannot be a CC; except in this
case that they provided tour-packages (same
with travel agencies)
Two Types of Cargo Operation
 Line service – operation of a common
carrier which publicly offers services
without discrimination to any user, has
regular ports of destination, fixed sailing
schedules and frequencies and
published freight rates and attendant
charges and usually carriers multi
consignments (RA 9515). Liners carry
general cargoes, meaning whatever is
offered is accepted for shipment.
 Tramp service – operation of a common
carrier which has no regular and fixed
routes and schedules but accepts cargo
wherever and whenever the shipper
desires, is hired on a contractual basis,
chartered by any one or few shippers
under mutually agreed terms and
usually carries bulk or break bulk
cargoes.
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Governing Laws
 Coastwise Shipping (inter-island within
the Philippines; e.g. 2Go)
- New Civil Code (Arts. 1732 – 1766)
- Code of Commerce (suppletory) –
Art. 1766 of CC: In all matters not
regulated by this Code, the rights
and obligations of common carriers
shall be governed by the Code of
Commerce and by special laws.
 Carriage from Foreign Ports to Philippine
Ports
- New Civil Code (primary)
- Code of Commerce (suppletory)
- Carriage of Goods by Sea Act
(COGSA) (suppletory)
 Carriage from Philippine Port to Foreign
Ports
- The laws of the country to which the
goods are to be transported
- Article 1753. The law of the country
to which the goods are to be
transported shall govern the liability
of the common carrier for their loss,
destruction or deterioration.
 Overland Transportation (e.g. Ceres bus)
- Civil Code (primary)
- Code of Commerce (suppletorily)
- RA 4136 (The Land Transportation and
Traffic Code)
 Air Transportation
- Civil Code (primary)
- Code of Commerce (suppletorily)
- For international carriage – Warsaw
Convention (Convention for the
Unification of Certain Rules Relating
to the International Carriage by Air):
1. The place of departure and the
place of destination are within
the territories of the two
contracting countries regardless
 of whether or not there was a
break in the transportation of
transshipment
2. The place of departure and the
place of destination are within
the territory of a single
contracting country if there is an
agreed stopping place within a
territory subject to the
sovereignty, mandate or
authority of another power,
even though the power is not a
party to the Convention
Nature of Business of Common Carriers
 Common carriers are public utilities
within the contemplation of public
service law.
 Public utilities are privately-owned
and operated businesses whose
services are essential to the general
public.
 They are enterprises which
specifically cater to the needs of the
public conducive to their comfort
and convenience.
 When one devotes his property to a
use in which the public has an
interest in that use, and must
submit to control by the public for
common goods, to the extent of the
interest he thus created. (KMU vs.
Garcia)
REGISTERED OWNER RULE AND KABIT SYSTEM
REGISTERED OWNER RULE

 The rule in this jurisdiction is that the
person who is the registered owner of a
vehicle is liable for any damage caused
by the negligent operation of the vehicle
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although the same was already sold or
conveyed to another person at the time
of the accident.
 The registered owner is liable to the
injured party subject to his right of
recourse against the transferee or buyer

 The registered owner is not liable if the
vehicle was taken from his garage
without his knowledge and consent

 This rule is applicable whenever the
persons involved are engaged in what is
known as the kabit system.
 Certificate of registration of an aircraft is
conclusive evidence of ownership
except when ownership itself is an issue.
 FEB LEASING AND FINANCE CORP.
(NOW BPI LEASING CORP.) VS. SPS.
BAYLON, ET AL
The registered owner of a vehicle is
directly and primarily responsible
for the consequences of its
operation regardless of who the
actual vehicle owner might be. Thus,
even if the vehicle has already been
sold, leased, or transferred to
another person at the time the
vehicle figured in an accident, the
registered vehicle owner would still
be liable for damages caused by the
accident.
 FILCAR TRANSPORT SERVICES VS.
ESPINAS
In so far as third persons are
concerned, the registered owner of
the motor vehicle is the employer of
the negligent driver, and the actual
employer is considered merely as an
 agent of such owner. Whether there
is an employer-employee
relationship between the registered
owner and the driver is irrelevant in
determining the liability of the
registered owner who the law holds
primarily and directly responsible
for any accident, injury or death
caused by the operation of the
vehicle in the streets and highways.
 METRO MANILA TRANSIT CORP. vs.
CUEVAS
The registered owner of a motor
vehicle whose operation causes
injury to another is legally liable to
the latter. But it is error not to allow
the registered owner to recover
reimbursement from the actual and
present owner by way of its cross-
claim.
Recovery may be made from the
actual employer of the negligent.
Although the registered-owner rule
might seem to be unjust towards
MMTC, the law did not leave it
without any remedy or recourse.
According to Filcar Transport
Services v. Espinas, MMTC could
recover from Mina’s Transit, the
actual employer of the negligent
driver, under the principle of unjust
enrichment, by means of a cross-
claim seeking reimbursement of all
the amounts that it could be
required to pay as damages arising
from the driver’s negligence. A
cross-claim is a claim by one party
against a co-party arising out of the
transaction or occurrence that is the
subject matter either of the original
action or of a counterclaim therein,
and may include a claim that the
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party against whom it is asserted is
or may be liable to the cross-
claimant for all or part of a claim
asserted in the action against the
cross-claimant.
KABIT SYSTEM
 The Kabit System is an arrangement
whereby a person who has been granted
a certificate of public convenience
allows other persons who own motor
vehicles to operate them under his
license, sometimes for a fee or
percentage of the earnings.

 Although the parties to such an
agreement are not outrightly penalized,
the kabit system is invariably recognized
as being contrary to public policy and
therefore void and inexistent
 Note: Kabit system may be applied to
vessels and aircrafts that are covered by
certificate of public convenience and
necessity. Basic is the rule that no
person can operate a common carrier
without securing a CPCN. Hence,
persons who do not have such certificate
cannot circumvent the law by using the
certificate of another.
WHY KABIT SYSTEM IS PERNICIOUS?
It would seem that the thrust of the law in
enjoining the kabit system is not so much as to
penalize the parties but to identify the person
upon whom responsibility may be fixed in case
of an accident with the end view of protecting
the riding public. The policy therefore loses its
force if the public at large is not deceived, much
less involved.
 LIM, ET AL vs. CA, ET AL
The owner of a passenger jeepney who operates
under a kabit system is not precluded from filing
a case for damages if the public at large is not
deceived, much less involved.
In the present case it is at once apparent that the
evil sought to be prevented in enjoining the kabit
system does not exist. First, neither of the
parties to the pernicious kabit system is being
held liable for damages. Second, the case arose
from the negligence of another vehicle in using
the public road to whom no representation, or
misrepresentation, as regards the ownership
and operation of the passenger jeepney was
made and to whom no such representation, or
misrepresentation, was necessary. Thus it
cannot be said that private respondent Gonzales
and the registered owner of the jeepney were in
estoppel for leading the public to believe that
the jeepney belonged to the registered owner.
Third, the riding public was not bothered nor
inconvenienced at the very least by the illegal
arrangement. On the contrary, it was private
respondent himself who had been wronged and
was seeking compensation for the damage done
to him. Certainly, it would be the height of
inequity to deny him his right.
BOUNDARY SYSTEM
The carrier cannot escape liability by claiming
that the driver is a lessee. To tolerate such
position would not only abet flagrant violations
of the law but also to place the riding public at
the mercy of reckless and irresponsible drivers -
reckless because the measure of their earnings
depends largely upon the number of trips they
make, and hence, the speed at which they drive;
irresponsible because most if not all are in no
position to pay the damages they might cause.
Registration Laws
 Registration of motor vehicles is now
governed by RA 4136, otherwise known
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as “The Land Transportation and Traffic
Code.”
 Administered by the Land
Transportation Office.
Salient Provisions of RA 4136
 Section 3. Words and phrases defined. -
As used in this Act:
(a) "Motor Vehicle" shall mean any
vehicle propelled by any power other
than muscular power using the public
highways, but excepting road rollers,
trolley cars, street-sweepers, sprinklers,
lawn mowers, bulldozers, graders, fork-
lifts, amphibian trucks, and cranes if not
used on public highways, vehicles which
run only on rails or tracks, and tractors,
trailers and traction engines of all kinds
used exclusively for agricultural
purposes.
Trailers having any number of wheels,
when propelled or intended to be
propelled by attachment to a motor
vehicle, shall be classified as separate
motor vehicle with no power rating.
(b) "Passenger automobiles" shall mean
all pneumatic-tire vehicles of types
similar to those usually known under the
following terms: touring car, command
car, speedster, sports car, roadster, jeep,
cycle, car (except motor wheel and
similar small outfits which are classified
with motorcycles), coupe, landaulet,
closed car, limousine, cabriolet, and
sedan.
Motor vehicles with changed or rebuilt
bodies, such as jeepneys, jitneys, or
station wagons, using a chassis of the
usual pneumatic-tire passenger
automobile type, shall also be classified
 as passenger automobile, if their net
allowable carrying capacity, as
determined by the Commissioner of
Land Transportation, does not exceed
nine passengers and if they are not used
primarily for carrying freight or
merchandise.
The distinction between "passenger
truck" and "passenger automobile" shall
be that of common usage: Provided, that
a motor vehicle registered for more than
nine passengers shall be classified as
"truck": And Provided, further, that a
"truck with seating compartments at the
back not used for hire shall be registered
under special "S" classifications. In case
of dispute, the Commissioner of Land
Transportation shall determine the
classification to which any special type
of motor vehicle belongs.
(c) "Articulated vehicle" shall mean any
motor vehicle with a trailer having no
front axle and so attached that part of
the trailer rests upon motor vehicle and
a substantial part of the weight of the
trailer and of its load is borne by the
motor vehicle. Such a trailer shall be
called as "semi-trailer."
(d) "Driver" shall mean every and any
licensed operator of a motor vehicle.
(e) "Professional driver" shall mean
every and any driver hired or paid for
driving or operating a motor vehicle,
whether for private use or for hire to the
public.
Any person driving his own motor
vehicle for hire is a professional driver.
(f) "Owner" shall mean the actual legal
owner of a motor vehicle; in whose
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name such vehicle is duly registered with
the Land Transportation Commission.
The "owner" of a government-owned
motor vehicle is the head of the office or
the chief of the Bureau to which the said
motor vehicle belongs.
(g) "Dealer" shall mean every person,
association, partnership, or corporation
making, manufacturing, constructing,
assembling, remodeling, rebuilding, or
setting up motor vehicles; and every
such entity acting as agent for the sale of
one or more makes, styles, or kinds of
motor vehicles, dealing in motor
vehicles, keeping the same in stock or
selling same or handling with a view to
trading same.
(h) "Garage" shall mean any building in
which two or more motor vehicles,
either with or without drivers, are kept
ready for hire to the public, but shall not
include street stands, public service
stations, or other public places
designated by proper authority as
parking spaces for motor vehicles for
hire while awaiting or soliciting business.
(i) "Gross weight" shall mean the
measured weight of a motor vehicle plus
the maximum allowable carrying
capacity in merchandise, freight and/or
passenger, as determined by the
Commissioner of Land Transportation.
(j) "Highways" shall mean every public
thoroughfare, public boulevard,
driveway, avenue, park, alley and
callejon, but shall not include roadway
upon grounds owned by private persons,
colleges, universities, or other similar
institutions.
 (k) "The Commissioner of Land
Transportation or his deputies" shall
mean the actual or acting chief of the
Land Transportation Commission or
such representatives, deputies, or
assistants as he may, with the approval
of the Secretary of Public Works and
Communications, appoint or designate
in writing for the purpose contemplated
by this Act.
(l) "Parking or parked", for the purposes
of this Act, shall mean that a motor
vehicle is "parked" or "parking" if it has
been brought to a stop on the shoulder
or proper edge of a highway, and
remains inactive in that place or close
thereto for an appreciable period of
time. A motor vehicle which properly
stops merely to discharge a passenger or
to take in a waiting passenger, or to load
or unload a small quantity of freight with
reasonable dispatch shall not be
considered as "parked", if the motor
vehicle again moves away without delay.
 Section 5. All motor vehicles and other
vehicles must be registered.
(a) No motor vehicle shall be used or
operated on or upon any public highway
of the Philippines unless the same is
properly registered for the current year
in accordance with the provisions of this
Act.
(b) Any registration of motor vehicles
not renewed on or before the date fixed
for different classifications, as provided
hereunder shall become delinquent and
invalid:
1. For hire motor vehicles - on or
before the last working day of
February.
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2. Privately-owned motor
vehicles - from March one to the
last working day of May.
3. All other motor vehicles -
from June one to the last
working day of June; except
when the plates of such motor
vehicles are returned to the
Commission in Quezon City or to
the Office of the Motor Vehicles
Registrar in the provincial or city
agency of the Commission on or
before the last working day of
December of the year of issue.
(c) Dealer's reports - The Commissioner
of Land Transportation shall require
dealers to furnish him with such
information and reports concerning the
sale, importation, manufacture, number
of stocks, transfer or other transactions
affecting motor vehicles as may be
necessary for the effective enforcement
of the provisions of this Act.
(d) Change of motor number prohibited.
- No repair or change in the motor
vehicle involving the exchange,
elimination, effacing, or replacing of the
original or registered serial or motor
number as stamped or imprinted, shall
be allowed, and any motor vehicle with
a trace of having its motor number
altered or tampered with shall be
refused registration or re-registration,
unless such is satisfactorily explained
and approved by the Commissioner.
(e) Encumbrances of motor vehicles. -
Mortgages, attachments, and other
encumbrances of motor vehicles, in
order to be valid, must be recorded in
the Land Transportation Commission
and must be properly recorded on the
 face of all outstanding copies of the (b) For hire – motor vehicles registered
certificates of registration of the vehicle under this classification are those
concerned. covered by certificates of public
convenience or special permits issued by
Cancellation or foreclosure of such the Board of Transportation and shall be
mortgages, attachments, and other subject to the provisions of the Public
encumbrances shall likewise be Service Act and the rules and regulations
recorded, and in the absence of such issued thereunder as well as the
cancellation, no certificate of provisions of this Act
registration shall be issued without the
corresponding notation of mortgage, (c) Government – motor vehicles owned
attachment and/or other by the government of the Philippines or
encumbrances. any of its political subdivisions shall be
registered under this classification
- Encumbrances and mortgages are
registered at Registry of Deeds. If (d) Diplomatic – motor vehicles owned
maritime, go to MARINA (Maritime by foreign governments or by their duly
Industry Authority). accredited diplomatic officers of the
Philippines and used in the discharge of
 Section 7 – Registration Classification – their official duties
The classification of vehicles shall be:
Tourists bringing their own motor
1. Private vehicles to the Philippines may, however
without registering such motor vehicles,
use the same during but not after 90
2. For Hire
days of their sojourn. Provided, that the
motor vehicle displays the number
3. Government
plates for the current year of some other
country or state, and said number plates
4. Diplomatic
as well as the name and address
(permanent and temporary) of the
Within 90 days from the approval of this
thereof are registered in the Bureau of
Act, appropriate sub-classifications shall
Land Transportation prior to the
be determined by the Director of Land
operation of the motor vehicle.
Transportation with the approval of the
Minister of Transportation and
If such tourists remain in the Philippines
Communications taking into
longer than 90 days, the motor vehicle
consideration on the body
shall not be operated unless registered
configuration, weight, cubic
in accordance with this Act and the
displacement and/or number of
corresponding registration fees are paid.
cylinders of the motor vehicle.
 Section 14. Issuance of certificates of
(a) Private – motor vehicles registered
registration. - A properly numbered
under this classification shall not be used
certificate of registration shall be issued
for hire under any circumstance
for each separate motor vehicle after

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 due inspection and payment of
corresponding registration fees.
 Section 15. Use and authority of
certificate of registration.
(a) The said certificate shall be preserved
and carried in the car by the owner as
evidence of the registration of the motor
vehicle described therein, and shall be
presented with subsequent applications
for re-registration, transfer of
ownership, or recording of
encumbrances: Provided, that in lieu of
the certificate of registration a true copy
or photostat thereof may be carried in
the motor vehicle.
(b) The certificate of registration issued
under the provisions of this Act for any
motor vehicle shall, while the same is
valid and effective and has not been
suspended or revoked, be the authority
for the operation of such motor vehicle.
(c) No motor vehicle shall be operated
on the public highways in a manner
which would place it under a
classification requiring the payment of a
larger registration fee than that stated in
the certificate of registration.
- Should you always carry original
certificate of registration? Actual
practice is photocopy.
 Section 18. Use of number plates. - At all
times, every motor vehicle shall display
in conspicuous places, one in front and
one in the rear thereof, the said number
plates.
The number plates shall be kept clean
and cared for, and shall be firmly affixed
to the motor vehicle in such a manner as
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will make it entirely visible and always
legible.
Except in the case of dealer's number
plates which may be used successively
on various motor vehicles in stock, no
person shall transfer number plates
from motor vehicle to another.
No dealer's number plate shall be used
on any motor vehicle after said vehicle
has been sold and delivered to a
purchaser, and no dealer shall allow
such dealer's number plates to be used
on any motor vehicle after its sale and
delivery to a purchaser.
 Section 19. Duty to procure license. -
Except as otherwise specifically provided
in this Act, no person shall operate any
motor vehicle without first procuring a
license to drive a motor vehicle for the
current year, nor while such license is
delinquent, invalid, suspended or
revoked.
The license shall be carried by the driver
at all times when operating a motor
vehicle, and shall be shown and/or
surrendered for cause and upon demand
to any person with authority under this
Act to confiscate the same.
- Always bring the original driver’s
license.
Speed Limit and Keeping to the Right
 Section 35. Restriction as to speed. -
(a) Any person driving a motor vehicle
on a highway shall drive the same at a
careful and prudent speed, not greater
nor less than is reasonable and proper,
having due regard for the traffic, the
width of the highway, and of any other
condition then and there existing; and
no person shall drive any motor vehicle
 upon a highway at such a speed as to approaching
endanger the life, limb and property of intersections
any person, nor at a speed greater than at "blind
will permit him to bring the vehicle to a corners,"
stop within the assured clear distance passing school
ahead. - FAMILIARIZE! zones, passing
other vehicles
(b) Subject to the provisions of the which are
preceding paragraph, the rate of speed stationery, or
of any motor vehicle shall not exceed the for similar
following: dangerous
circumstances.
Motor
MAXIMUM Passengers
trucks (c) The rates of speed hereinabove
ALLOWABLE Cars and
and prescribed shall not apply to the
SPEEDS Motorcycle
buses following:
1. On open 80 km. per 50 km.
country roads, hour per hour (1) A physician or his driver
with no "blinds when the former responds to
corners" not emergency calls;
closely
bordered by (2) The driver of a hospital
habitations. ambulance on the way to and
from the place of accident or
2. On "through 40 km. per 30 km. other emergency;
streets" or hour per hour
boulevards, (3) Any driver bringing a
clear of traffic, wounded or sick person for
with no " blind emergency treatment to a
corners," hospital, clinic, or any other
when so similar place;
designated.
(4) The driver of a motor vehicle
3. On city and 30 km. per 30 km.
belonging to the Armed Forces
municipal hour per hour
while in use for official purposes
streets, with
in times of riot, insurrection or
light traffic,
invasion;
when not
designated
(5) The driver of a vehicle, when
"through
he or his passengers are in
streets".
pursuit of a criminal;
4. Through 20 km. per 20 km.
crowded hour per hour
streets,

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 (6) A law-enforcement officer
who is trying to overtake a
violator of traffic laws; and

(7) The driver officially operating

a motor vehicle of any fire
department, provided that
exemption shall not be
construed to allow unless or
unnecessary fast driving of
drivers aforementioned.

 Section 36. Speed limits uniform

throughout the Philippines. - No
provincial, city or municipal authority
shall enact or enforce any ordinance or
resolution specifying maximum
allowable speeds other than those
provided in this Act.

 Section 37. Driving on right side of

highway. - Unless a different course of
action is required in the interest of the
safety and the security of life, person or
property, or because of unreasonable
difficulty of operation in compliance
herewith, every person operating a
motor vehicle or an animal-drawn
vehicle on a highway shall pass to the
right when meeting persons or vehicles
coming toward him, and to the left when
overtaking persons or vehicles going the
same direction, and when turning to the
left in going from one highway to
another, every vehicle shall be
conducted to the right of the center of
the intersection of the highway.

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