Definition of Contract of Carriage: (Elements) Common Carriers Are

REVIEWER ON TRANSPORTATION LAW – Submitted to Atty.
Rojane Puruel
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D
1. DEFINITION OF CONTRACT OF CARRIAGE
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.
[Elements] Common carriers are:

a. persons' corporations, firms or associations
b. engaged in the business of carrying or transporting passengers, goods or both
c. means of carriage is by land, water or air
d. the carrying of passengers, goods or both is for compensation
e. the service is offered to the public without distinction.
2. PERFECTION OF CONTRACT OF CARRIAGE
A contract of carriage or of common carriage itself is considered as a real contract for not until the facilities
of the carrier are actually used can the carrier be said to have already assumed the obligation of the carrier.
Even if no tickets were issued, a verbal contract to carry is already a binding consensual contract. (British
Airways v. CA, G.R. No. 92288)
When the goods are unconditionally placed in the possession and control of the carrier, and upon their receipt
by the carrier for transportation, the contract of carriage is perfected. (Mauro Ganzon v. CA, G.R. No. L-
48757)
3. WHAT ARE THE FORMALITIES REQUIRED FOR A CONTRACT OF CARRIAGE?
Written contract not essential, it is consensual.

The presence of a ticket or a bill of lading or any written contract is not necessary for the perfection of a
contract of carriage. The Supreme Court held, that the bill of lading is not essential to the contract, although
it may become obligatory by reason of the regulations of railroad companies, or as a condition imposed in
the contract by the agreement of the parties themselves.
4. TRUE TEST OF CONTRACT OF CARRIER
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 general 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. The question must be determined by the character of the business actually carried on
by the carrier, not by any secret intention or mental reservation it may entertain or assert when charged
with the duties and obligations that the law imposes.
1
REVIEWER ON TRANSPORTATION LAW – Submitted to Atty. Rojane Puruel
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D
Sps. Perena v. Sps. Nicholas, G.R. No. 157917, August 29, 2012
Applying the true test for a common carrier to this case, there is no question that the Pereñas as the
operators of a school bus service were: (a) engaged in transporting passengers generally as a business,
not just a casual employment; (b) undertaking to carry passengers over established roads by the method
by which the business was conducted; and (c) transporting students for a fee. Despite catering to a
limited clientèle, the Pereñas 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
they operated the service and for a fee.
FACTS: Spouses Perena were engaged in the business of transporting students from their residences in
Parañaque City to Don Bosco Makati City. The Pereñas used a KIA Ceres Van, which had the capacity to
transport 14 students at a time. They employed Clemente Alfaro as driver of the van. Aaron, the son of the
Spouses Zarate, was among the students being transported by the school bus, which was driven by Clemente
Alfaro.
One day, Alfaro took the van to an alternate route at about 6:45 a.m. by traversing the narrow path underneath
the Magallanes Interchange. At the time, the narrow path was marked by piles of construction materials and
parked passenger jeepneys, and the railroad crossing in the narrow path had no railroad warning signs or
other responsible persons manning the crossing. He engaged in a race with a passenger bus near the
railway. While the bus was able to fully pass through the railway, the Kia Ceres Van’s rear end was left along
the railway. Though the train driver was honking, it could not be heard by Alfaro because of the loud music
that was playing in the van. Alano, driver of the train, applied the ordinary brakes of the train. He applied the
emergency brakes only when he saw that a collision was imminent. The passenger bus successfully crossed
the railroad tracks, but the van driven by Alfaro did not. The train hit the rear end of the van, and the impact
threw nine of the 12 students in the rear, including Aaron, out of the van. Aaron landed in the path of the
train, which dragged his body and severed his head, instantaneously killing him. Alano fled the scene on
board the train, and did not wait for the police investigator to arrive. The Zarates commenced this action for
damages against Alfaro, the Pereñas, PNR and Alano.
ISSUE: Is a School Bus considered a private carrier?
HELD: No. Pereñas operated as a common carrier; and that their standard of care was extraordinary
diligence, not the ordinary diligence of a good father of a family. Although in this jurisdiction the operator of a
school bus service has been usually regarded as a private carrier, primarily because he only caters to some
specific or privileged individuals, and his operation is neither open to the indefinite public nor for public use,
the exact nature of the operation of a school bus service has not been finally settled.
The carrier is classified either as a private/special carrier or as a common/public carrier. A private carrier is
one who, without making the activity a vocation, or without holding himself or itself out to the public as ready
to act for all who may desire his or its services, undertakes, by special agreement in a particular instance
only, to transport goods or persons from one place to another either gratuitously or for hire. The provisions
on ordinary contracts of the Civil Code govern the contract of private carriage. The diligence required of a
2
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

private carrier is only ordinary, that is, the diligence of a good father of the family. In contrast, a common
carrier is a person, corporation, firm or association engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for compensation, offering such services to the public.
Contracts of common carriage are governed by the provisions on common carriers of the Civil Code, the
Public Service Act, and other special laws relating to transportation. A common carrier is required to observe
extraordinary diligence, and is presumed to be at fault or to have acted negligently in case of the loss of the
effects of passengers, or the death or injuries to passengers.
Applying these considerations to the case before us, there is no question that the Pereñas as the operators
of a school bus service were: (a) engaged in transporting passengers generally as a business, not just as 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. Despite catering to a limited clientèle, the
Pereñas 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 they operated the service
and for a fee.
5. 9 CHARACTERISTICS OF A CONTRACT OF CARRIAGE (COMMON CARRIER)
1. Article 1732 makes no distinction between one whose principal business activity is the carrying of
person or goods or both, and one who does such carrying only as an ancillary activity;
2. 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.
3. Article 1732 does not 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 its business only from a
narrow segment of the general population.
4. A person or entity is a common carrier and has the obligations of the common carrier under the civil
code even if he did not secure a Certificate of Public Convenience.
5. The Civil Code makes no distinction as to the means of transporting, as long as it is by land, water
or air.
6. The Civil Code does not provide that the transportation should be by motor vehicle.
7. A person or entity may be a common carrier even if he has no fixed and publicly known route,
maintains no terminals, and issues no tickets.
8. A person or entity need not be engaged in the business of public transportation for the provisions of
the Civil Code on common carriers to apply to them.
9. The carrier can also be a common carrier even if the operator does not own the vehicle or vessel
that he or she operates.
3
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D
6. DE GUZMAN PRINCIPLE
CASE: PEDRO DE GUZMAN v CA, GR No. L-47822, December 22, 1988
Facts: Ernesto Cendana was a junk dealer. He buys scrap materials and brings those that he gathered to
Manila for resale using 2 six-wheeler trucks. On the return trip to Pangasinan, respondent would load his
vehicle with cargo which various merchants wanted delivered, charging fee lower than the commercial rates.
Sometime in November 1970, petitioner Pedro de Guzman contracted with respondent for the delivery of 750
cartons of Liberty Milk. On December 1, 1970, respondent loaded the cargo. Only 150 boxes were delivered
to petitioner because the truck carrying the boxes was hijacked along the way. Petitioner commenced an
action claiming the value of the lost merchandise. Petitioner argues that respondent, being a common carrier,
is bound to exercise extraordinary diligence, which it failed to do. Private respondent denied that he was a
common carrier, and so he could not be held liable for force majeure.
Principle/s:
 Article 1732 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. 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.
 Article 1734 establishes the general rule that common carriers are responsible for the loss,
destruction or deterioration of the goods which they carry, "unless the same is due to any of the
following causes only:
a. Flood, storm, earthquake, lightning, or other natural disaster or calamity;
b. Act of the public enemy in war, whether international or civil;
c. Act or omission of the shipper or owner of the goods;
d. The character of the goods or defects in the packing or in the containers; and
e. Order or act of competent public authority."
The hijacking of the carrier's truck - does not fall within any of the five (5) categories of exempting
causes listed in Article 1734. Private respondent as common carrier is presumed to have been at
fault or to have acted negligently.
 A common carrier is held responsible and will not be allowed to divest or to diminish such
responsibility even for acts of strangers like thieves or robbers EXCEPT where such thieves or
robbers in fact acted with grave or irresistible threat, violence or force. The limits of the duty of
extraordinary diligence in the vigilance over the goods carried are reached where the goods are lost
as a result of a robbery which is attended by grave or irresistible threat, violence or force. 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.
4
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

7. FIRST PHILIPPINE INDUSTRIAL CORPORATION, VS. COURT OF APPEALS, HONORABLE
PATERNO V. TAC-AN, BATANGAS CITY AND ADORACION C. ARELLANO
FACTS: First Philippine Industry Corporation (FPIC) is a grantee of a pipeline concession to contract, install,
and operate oil pipelines. In 1995, they applied for a mayor’s permit with the Office of the Mayor of Batangas
City. However, the City Treasurer required them to first pay a local tax based on its gross receipts for fiscal
year 1993 pursuant to the Local Govt. Code, before a mayor’s permit may be issued. FPIC then paid under
protest its corresponding tax for the first quarter of 1993. FPIC thereafter sent a letter of protest to the City
Treasurer, contending that it is a pipeline operator with a government concession granted under the
Petroleum Act; consequently, it is engaged in the business of transporting petroleum products from the
Batangas refineries, VIA PIPELINE, to Sucat and JTF Pandacan Terminals. As such, they should be tax
exempt.
The City of Batangas argued that such exemption applies only to “transportation contractors and persons
engaged in the transportation by hire and COMMON CARRIERS BY AIR, LAND, and WATER.” They further
contended that pipelines are not included in the term “common carrier” which pertains to the MODE or
MANNER by which a product is delivered to its destination.
The trial court ruled in favor of the City of Batangas saying that FPIC is not a common carrier which was
supposedly tax exempt, but instead, a special carrier extending its services and facilities to a single specific
or special customer under a special contract. The Court of Appeals affirmed said decision.
ISSUE: Whether a pipeline business is included in the term “common carrier” so as to entitle the FPIC to the
exemption.
RULING: Yes. FPIC is a common carrier.
A “common carrier” may be defined, broadly, as one who holds himself out to the public as engaged in the
business of transporting persons or property from place to place, for compensation, offering his services to
the public generally.
Article 1732 of the Civil Code defines a “common carrier” as “any person, corporation, firm or association
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.”
The tests for determining whether a party is a common carrier of goods are:
(1) He must be engaged in the business of carrying goods for others as a public employment, and must
hold himself out as ready to engage in the transportation of goods for person generally as a business
and not as a casual occupation;
(2) He must undertake to carry goods of the kind to which his business is confined;
(3) He must undertake to carry by the method by which his business is conducted and over his
established roads; and
(4) The transportation must be for hire.
Based on the above definitions and requirements, there is no doubt that FPIC is a common carrier.
FPIC is engaged in the business of transporting or carrying goods i.e, petroleum products, for hire as a public
employment. It undertakes to carry for all persons indifferently, that is, to all persons who choose to employ
5
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

its services, and transports the goods by land and for compensation. The fact that FPIC has a limited clientele
does not exclude it from the definition of a common carrier.
Article 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 United States, oil pipeline operators are considered common carriers.
Moreover, under the Petroleum Act of the Philippines (Republic Act 387), petitioner FPIC is considered a
“common carrier.”
BAR Q:
Requisites for an entity to be classified as a common carrier (1996, 1997, 2000, 2002 Bar)
(PBL-FP)
1. Must be a Person, corporation, firm or association;
2. Engaged in the Business of carrying or transporting passengers or goods or both;
3. The carriage or transport must either be by Land, water or air;
4. The service is for a Fee; and
5. The service is offered to the Public (Art. 1732, NCC)
NOTE: A pipeline operator who carries oil and other petroleum products through pipes/pipelines is a common
carrier. The law does not distinguish as to the means by which transportation is carried out, as long as it is
by land, water, or air. Neither does the law require that transportation be through a motor vehicle (First Phil.
Industrial Corp. v. CA, G.R. No. 125948, December 29, 1998).
8. CHARTER PARTY (DEMISE/BAREBACK VS. VOYAGE/TIME CHARTER) VS. SLOT CHARTER
CHARTER PARTY
 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 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 the 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.
6
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

 Contract by virtue of which the owner or agent binds himself to transport merchandise or
persons of a fixed price. It may either be contract of affreightment (time and Voyage
Charter) and bareboat or demise charter.
a. Contract of Affreightment (voyage or time charter)- the owner of the vessel leases a part or
all of the space of the vessel to carry goods but retains the possession, command and
navigation of the vessel. The charter merely has the use of the space in the vessel in
return for the payment of the charter hire.
b. Bareboat/ Demise Charter—involve the transfer of full possession and control of the vessel
to the charterer. The entire control and management of the vessel is given up to the
charterer. The charterer mans the vessel with his own people. (2003 Bar exams)
BAREBOAT OR DEMISE CHARTER PARTY VS. CONTRACT OF AFFREIGHTMENT
BAREBOAT/DEMISE CONTRACT OF
CHARTER CONTRACT AFFREIGHTMENT
Negligence of the charterer gives Ship owner remains liable and
rise to its liability to others. carrier must answer for any
breach of duty.
Charterer is regarded as owner Charterer is not regarded as
pro hac vice. Ship owner owner. Ship owner retains
temporarily relinquishes ownership over the vessel
possession and ownership of the (Coastwise Lighterage vs. CA,
vessel G.R. No. 114167, July 12, 1995).
SLOT CHARTER OR SPACE CHARTER AGREEMENT

 A slot or space charter agreement is in the nature of a contract of affreightment.
9. DOMINGO ANG V. AMERICAN STEAMSHIP AGENCIES, G.R. No. L-25047, March 18, 1967
FACTS: A commercial bank, Yau Yue, agreed to sell separate a boat to Davao Merchandising and cases of
hiranos automatic cop change for cotton loom to Teves. Both of them were not able to pay, thus the bill of
ladings of both transactions were indorsed to Ang. The American Steamship, carrier’s agent, however,
misdelivered the goods to Davao Merchandising and Teves. This prompted Ang to file separate complaints
against American Steamship for the alleged misdelivery of goods belonging to him. American Steamship filed
a motion to dismiss on the ground of prescription invoking the Carriage of Goods by Sea Act.
ISSUE: Whether the provision of the Carriage of Goods by Sea Act as to prescription is applicable in this
case.
HELD: No, it is not applicable.
7
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

The one-year prescriptive period under Section 3(6), paragraph 4 of the Carriage of Goods by Sea Act does
not apply in cases of misdelivery or conversion.
The provision of law involved in this case speaks of "loss or damage". What is to be resolved — in order to
determine the applicability of the prescriptive period of one year to the case at bar — is whether or not there
was 'loss' of the goods subject matter of the complaint. As defined in the Civil Code and as applied to Section
3(6), paragraph 4 of the Carriage of Goods by Sea Act, 'loss' contemplates merely a situation where no
delivery at all was made by the shipper of the goods because the same had perished, gone out of commerce,
or disappeared in much a way that their existence is unknown or they cannot be recovered. It does not include
a situation where there was indeed delivery — but delivery to the wrong person, or a misdelivery, as alleged
fir the complaint in this case.
NOTE: The point that matters here is that the situation is either delivery or misdelivery, but not non-delivery.
Thus, the goods were either rightly delivered or misdelivered, but they were not lost. There being no loss or
damage to the goods, the quoted provision of the Carriage of Goods by Sea Act stating that "In any event,
the carrier and the ship shall be discharged from all liability in respect of loss or damage unless it is brought
within one year after delivery of the goods or the date of when the goods should have been delivered," does
not apply. The reason is not difficult to see. Said one-year period of limitation is designed to meet the
exigencies of maritime hazards. In a case where the goods shipped were neither lost nor damaged in transit
but were, on the contrary, delivered in port to someone who claimed to be entitled thereto, the situation is
different, and the special need for the short period of limitation in case of loss or damage caused by maritime
perils does not obtain.
It follows that for suits predicated not upon loss or damage but on alleged misdelivery (or conversion) of the
goods, the applicable rule on prescription is that found in the Civil Code, namely, either ten years for breach
of a written contract or four years for quasi-delict (Arts. 1144[1], 1146, Civil Code)
10. PLANTERS PRODUCTS v. CA G.R. No. 101503 September 15, 1993
FACTS: Planters Products, Inc. purchased from Mitsubishi International Corporation 9,329.7069 metric tons
of Urea 46% fertilizer, which the latter shipped aboard the cargo vessel M/V Sun Plum on June 16, 1974.
Prior to its voyage, a time-charter party was entered into between Mitsubishi as shipper, and Kyosei Kisen
Kabushiki Kaisha as shipowner. Before loading the fertilizer aboard the vessel, four of her holds were
presumably inspected by the charterer’s representative and found it fit to take the load. After loading the
cargo, the steel hatches were closed with heavy iron lids, covered with 3 layers of tarpaulin then tied with
steel bonds. It remained sealed throughout the entire voyage.
Upon arrival of the vessel, petitioner unloaded the cargo, which took 11 days. A private marine and cargo
surveyor, Cargo Superintendents Company, Inc. (CSCI) was hired by petitioner to determine the outturn of
the cargo shipped. CSCI reported shortage of 106.726 metric tons, and contamination of 18 metric tons due
to dirt. PPI sent a claim letter against Soriamont Steamship Agencies, the resident agent of KKKK. The
request was denied, hence, PPI filed an action for damages before the CFI Manila. The lower court sustained
the petitioner’s claim, but such decision was reversed by the appellate court, which absolved the carrier from
8
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

liability. The appellate court ruled that the vessel was a private carrier and not a common carrier by reason
of the charter party.
ISSUE: Whether a common carrier becomes a private carrier by reason of a charter-party.
RULING: 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 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" 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.
Article 1733 of the New Civil Code mandates that common carriers should observe extraordinary diligence
in the vigilance over the goods they carry. In the case of private carriers, however, the exercise of ordinary
diligence in the carriage of goods will suffice. Moreover, in the case of loss, destruction or deterioration of the
goods, common carriers are presumed to have been at fault or to have acted negligently, and the burden of
proving otherwise rests on them.
On the contrary, no such presumption applies to private carriers, for whosoever alleges damage to or
deterioration of the goods carried has the onus of proving that the cause was the negligence of the carrier.
9
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

It is not disputed that respondent carrier, in the ordinary course of business, operates as a common carrier,
transporting goods indiscriminately for all persons. When petitioner chartered the vessel M/V “Sun Plum”, the
ship captain, its officers and compliment were under the employ of the ship owner and therefore continued
to be under its direct supervision and control.
It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter of the whole
or portion of a vessel by one or more persons, provided the charter is limited to the ship only, as in the case
of a time-charter or voyage-charter.
It is only when the charter includes both the vessel and its crew, as in a bareboat or demise that a
common carrier becomes private, at least insofar as the particular voyage covering the charter-party
is concerned.
In lea Mer Industries, Inc., v. Malayan Insurance (GR no. 161745), 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.
11. COMMON CARRIER DISTINGUISHED FROM TOWAGE.
1. In towage, one vessel is hired to bring another vessel to another place. Thus, a tugboat may be hired by
a common carrier to bring a barge to a port. In this case, the operator of the tugboat cannot be considered
a common carrier. In maritime law, it refers to a service rendered to a vessel by towing for the mere
purpose of expediting her voyage without reference to any circumstances of danger.
2. The party that provides the service in a contract of towage is required to observe the due diligence of a
good father of the family while in a common carrier, it is required to exercise extraordinary diligence in
transporting goods or passengers. Fault or negligence of the obligor consists in his failure to exercise
due care and prudence in the performance of the obligation as the nature of the obligation so demands.
3. It does not follow, however, that a corporation that operates its business using tugboats that pulls barges
is engaged in mere towage. The circumstances may indicate that the corporation is engaged in business
as a common carrier. Though it is engaged in a limited contract of carriage in the sense that it chooses
its customers and is not open to the public, nevertheless, the continuity of its operation in this kind of
business has earned for it the level of a public utility.
COMMON CARRIER DISTINGUISHED FROM ARRASTRE.
1. Arrastre refers to hauling of cargo, comprehends the handling of cargo on the wharf or between the
establishment of the consignee or shipper and the ship’s tackle. The responsibility of the arrastre operator
lasts until the delivery of the cargo to the consignee.
2. The functions of an arrastre operator have nothing to do with the trade and business of navigation, nor
to the use or operation of vessels. They are, in fact, no different from those of a depositary or
warehouseman.
3. The common carrier may be held solidarily liable with the arrastre operator depending on the
circumstances. It should be noted that both the arrastre operator and the carrier may be charged with
and obligated to deliver the goods in good condition to the consignee. However, the liability of the carrier
10
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

usually remains until delivery of the goods to the consignee; thus, the custody of the carrier remains while
the goods are being unloaded.
COMMON CARRIER DISTINGUISHED FROM STEVEDORING.
1. Common carrier invloves the transporting of goods or passenger to the port of destination. Whereas in
stevedoring, stevedores involves the loading and unloading of coastwise vessels calling at the port.
Stevedoring refers to the handling of the cargo in the holds of the vessel or between the ship‟s tackle
and the holds of the vessel.
2.
3. Common carrier is required to exercise extraordinary diligence in transporting goods or passengers.
Whereas in stevedoring, the diligence required of a stevedore is the diligence of a good father of a family.
4. A stevedore is not a common carrier for it does not transport goods or passengers; it is not akin to a
warehouseman for it does not store goods for profit. The loading and stowing of cargoes would not have
a far-reaching public ramification as that of a common carrier and a warehouseman; our laws on contract
and on quasi-delict adequately protect the public. The public policy considerations in legally imposing
upon a common carrier or a warehouseman a higher degree of diligence is not present in a stevedoring
outfit which mainly provides labor in loading and stowing of cargoes for its clients
COMMON CARRIER DISTINGUISHED FROM TRAVEL AGENCY
1. A travel agency is not a common carrier. In many cases, the object of contractual relation of a
person who purchases a ticket through a travel agency is only the agency‟s service of arranging
and facilitating the booking, ticketing and accommodation in a package tour. In contrast, the object
of the contract with a common carrier is transportation. The contract between the travel agency and
a passenger is a contract of service and not a contract of carriage.
2. The diligence required of a travel agency is not extraordinary diligence but that of a good father of
a family under Article 1173 of the New Civil Code.”
12. TRAMP SERVICE AND LINE SERVICE
Cargo operation may be classified into two types

1. Line service; and
2. Tramp service.
Line service - the operation of a common carrier which publicly offers services without discrimination to any
user, has regular ports of call/destination, fixed sailing schedules and frequencies and published freight rates
and attendant charges and usually carries multiple consignments. Liners carry “general cargoes,” meaning
whatever is offered is accepted for shipment. An entity engaged in line service is referred to as a common
carrier.
11
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

Tramp service - the operation of a contract 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, or chartered by
any one or few shippers under mutually agreed terms and usually carries bulk or break bulk cargoes. Tramps
offer their capacity for the carriage of bulk cargoes as desired by the shipper, who ordinarily engages the
whole of the ship; each voyage is thus a matter of special arrangement between the shipowner and shipper.
The tramp seeks and usually gets a full cargo loaded by a single shipper and such cargoes are most often
in bulk or in standard packages and typically consist of raw materials, fuels and unprocessed foods so vital
to the world economy.
An entity that provides tramp service is only referred to as a contract carrier.

Those engaged in tramp service may also be considered common carriers depending on the circumstances.
REGISTRATION OF SHIP FOR DOMESTIC TRADE
Trampers -at the Central Office (CO) or the nearest MARINA Regional Office (MRO) where the company’s
principal or branch office is located
Liners -at the Central Office (CO) or the nearest MARINA Regional Office (MRO) where the company’s
principal office is located, or any of the ports of call of the ship, provided the company has a branch office in
that port of call.
13. GOVERNING LAWS & HIERARCHY OF APPLICABLE LAWS
The rules with respect to applicable laws were summarized, thus:
“ a) Coastwise Shipping.
(1) New Civil Code (Arts. 1732-1766) — primary law.
(2) Code of Commerce — governs suppletorily in absence of Civil Code provisions.
b) Carriage from Foreign Ports to Philippine Ports

(1) New Civil Code — primary law
(2) (2) Code of Commerce — all matters not regulated by the Civil Code. (National Development Co. v.
CA, 164 SCRA 593)
(3) (3) Carriage of Goods by Sea Act — suppletorily to the Civil Code. (Ibid.)
c) Carriage from Philippine Ports to Foreign Ports

(1) The laws of the country to which the goods are to be transported. (Art. 1753, Civil Code; National
Development Co. v. CA, 164 SCRA 593)
d) Overland Transportation.
(1) Civil Code — primary law.
(2) Code of Commerce — suppletorily.
12
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

e) Air Transportation.
(1) Civil Code
(2) (2) Code of Commerce
(3) (3) For International Carriage — Convention for the Unification of Certain Rules Relating to the
International Carriage by Air or “Warsaw Convention” with its amendments. (Alitalia v. Intermediate
Appellate Court, 192 SCRA 9) xx x”
14. REGISTERED OWNERS RULE
REGISTERED OWNER RULE AND KABIT SYSTEM.
In certain cases, it is not only the operator of the vehicle who may be held liable even if the cause of
actions is culpa contractual. Ordinarily, the person who can be sued for breach of contract is the contracting
party. However, in certain cases, by reason of public policy, the law allows victims of accidents to sue those
who, strictly speaking, are third parties. This obtains in the cases covered by the registered owner rule.
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 although the same was already sold or conveyed
to another person at the time of the accident. This rule is a matter of public interest. The registered owner is
liable to the injured party subject to his right of recourse against the transferee or the buyer.
The Court has invariably held in several decisions that the registered owner of a public service vehicle is
responsible for damages that may arise from consequences incident to its operation or that may be caused
to any of the passengers therein.
- Gelisan v Alday (1987)
The prevailing doctrine on common carriers makes the registered owner liable for consequences flowing from
the operations of the carrier, even though the specific vehicle involved may already have been transferred to
another person. This doctrine rests upon the principle that in dealing with vehicles registered under the Public
Service Law, the public has the right to assume that the registered owner is the actual or lawful owner thereof
It would be very difficult and often impossible as a practical matter, for members of the general public to
enforce the rights of action that they may have for injuries inflicted by the vehicles being negligently operated
if they should be required to prove who the actual owner is.
- Benedicto v IAC (1990)
The liability of the registered owner of a public service vehicle for damages arising from the tortious acts of
the driver is primary, direct, and joint and several or solidary with the driver.
- Philtranco v CA (1997)
THE REGISTERED OWNER IS NOT LIABLE IF THE VEHICLE WAS TAKEN FROM HIS GARAGE
WITHOUT HIS KNOWLEDGE AND CONSENT.
To hold the registered owner liable would be absurd as it would be like holding liable the owner of a
stolen vehicle for an accident caused by the person who stole such vehicle.
13
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

UNAUTHORIZED USE AND/OR THEFT OF THE VEHICLE MAY BE INVOKED IN PROPER CASES.
However, absent the cannot escape liability resulting from the use of the registered owner’s vehicle.
THE REGISTERED OWNER RULE APPLIES EVEN IF THE REGISTERED OWNER LEASED THE
VEHICLE TO ANOTHER WHO IS THE ACTUAL OPERATOR.
The registered owner is directly liable. In order to be free from liability, the lessor-owner should register the
lease contract with the Land Transportation Office. In other words, the lease should be annotated in the
certificate of registration in order that there will be notice to third parties that it is the lessee and not the
registered owner who is in possession and operating the vehicle.
THE REGISTERED OWNER RULE APPLIES IN A FINANCIAL LEASE.
A financial lease is a “mode of extending credit through a non-cancellable lease contract under which the
lessor purchases or acquires, at the instance of the lessee, machinery, equipment, motor vehicles,
appliances, business and office machines, and other movable or immovable property in consideration of the
periodic payment by the lessee of a fixed amount of money sufficient to amortize at least 70% of the purchase
price or acquisition cost, including any incidental expenses and a margin of profit over an obligatory period
of not less than two years lessor at the end of the lease contract.”
THE 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
by law, the kabit system is invariably recognized as being contrary to public policy and therefore void and
inexistent under Article 1409 of the Civil Code.
It would seem then 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.
14
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

15) PARI DELICTO RULE
Persons who are parties to the “kabit” system cannot invoke the same as against each other either to enforce
their illegal agreement or to invoke the same to escape liability. This is consistent with the time honored
maxim “ex pacto illicit non oritur action” - No action arises out of an illicit bargain. Having entered into an
illegal contract, neither can seek relief from the courts, and each must bear the consequences of his acts.
16) 3 CONDITIONS FOR THE ISSUANCE OF CERTIFICATE OF PUBLIC CONVENIENCE, BASIC

REQUIREMENTS
1. The applicant must be a citizen of the Philippines, or a corporation or co-partnership, association or

joint stock company constituted and organized under the laws of the Philippines, 60 per centum at
least of the stock or paid-up capital of which belong entirely to citizens of the Philippines.
2. The applicant must be financially capable of undertaking the proposed service and meeting the
responsibilities incident to its operations
3. The applicant must prove that the operation of the public service proposed and the authorization to
do business will promote the public interest in a proper and suitable manner.
17) BOUNDARY SYSTEM
In land transportation where the boundary system may be implemented by the common carrier, the carrier
cannot escape liability by claiming that the driver is a lessee. The carrier cannot exempt himself on the ground
that he is a lessor because to tolerate such position would not only abet flagrant violations of the Public
Service Law but also to place the rising 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 in which they drive; and irresponsible because most if not all of them are in no position to pay the
damages they might cause.
The relationship between jeepney owners/operators on one hand and jeepney drivers on the other under
boundary system is that of employer-employee and not of lessor and lessee.
18) BASIC OBLIGATIONS OF THE COMMON CARRIER
1. To accept passengers and goods without discrimination.
General Rule: A common carrier cannot ordinarily refuse to carry a particular class of goods.
Exception: For some sufficient reason the discrimination against the traffic in such goods is reasonable
and necessary.
The present law forbids failures or refusal to receive persons or property for carriage that have the effect of
giving an unreasonable or unnecessary preference or advantage to any person, locality, or particular kind of
traffic, of subjecting any person, locality or particular kind of traffic to any undue or unreasonable prejudice
or discrimination.
15
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

A common carrier is bound to receive and carry all the goods offered for transportation, subject to the entire
responsibilities incident to his employment; and is liable to an action in case of refusal. But he is entitled to
his pay; he may demand it, and if it be refused, he may refuse to carry the goods.
Common Carriers cannot lawfully decline to accept a particular class of goods unless it appears that for some
sufficient reason the discrimination against the traffic in such goods is reasonable and necessary.
In case of carriage by railway, the carrier is exempted from liability if carriage is insisted upon by the shipper,
provided its objections are stated in the bill of lading.
However, when a common carrier accepts cargo for shipment for valuable consideration, it takes the risk of
delivering it in good condition as when it was loaded.
2. To seasonably deliver the goods or bring the passenger to the destination.
The goods must be delivered within the stipulated time. Where a carrier made an express contract to transport
and deliver property within a specified time, he is bound to fulfil the contract and is liable for any delay, no
matter from what cause it may have arisen.
In the absence of a special contract a carrier is not an insurer against delay in the transportation of goods.
3. To deliver the goods or bring the passenger to the proper place or destination
The goods should be delivered to the consignee in the place agreed upon by the parties. If the specific place
or warehouse is designated in the bill of lading, the goods must be delivered in such place even if it is not the
usual place of delivery in the place of destination.
4. To deliver the goods to the proper person
Delivery must generally be made to the owner or consignee or to someone lawfully authorized by him to
receive the goods for his account.
5. To exercise extraordinary diligence in the performance of its duties
Compliance with this obligation must be with the element of integrity in the sense that the goods should be
delivered in the same condition that they were received and to transport passengers without encountering
any harm or loss. Failure to exercise extraordinary diligence will result in breach of the obligation of the carrier
through negligence.
Exercise of proper diligence requires the following: A man must use common sense, and exercise due
reflection in all his acts; It is his duty to be cautious, careful and prudent, if not from instinct, then through fear
of recurring punishment. He is responsible for such results as anyone might foresee and for acts which no
one would have performed except though culpable abandon. Otherwise, his own person, rights and property,
and those of his fellow beings would ever be exposed to all manner of danger and injury.
16
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

19) GROUNDS FOR NON-ACCEPTANCE
a) When the goods sought to be transported are dangerous objects, or substances including dynamites
and other explosives
b) The goods are unfit for transportation
c) Acceptance would result in overloading
d) The goods are considered contrabands or illegal goods
e) Goods are injurious to health
f) Goods will be exposed to untoward danger like flood, capture by enemies and the like
g) Goods like livestock will be exposed to diseases
h) Strike
i) Failure to tender goods on time
20) TRANSPORTATION OF ANIMALS
Republic Act No. 8485 or the Animal Welfare Act of 1998 provides:
Section 1. It is the purpose of this Act to protect and promote the welfare of all animals in the Philippines by
supervising and regulating the establishment and operations of all facilities utilized for breeding, maintaining,
keeping, treating or training of all animals either as objects of trade or as household pets. For purposes of
this Act, pet animal shall include birds.
What are the obligations of carrier of animals?
It shall be the duty of any owner or operator of any land, air, water public utility transporting pet, wildlife and
all other animals to provide in all cases adequate, clean and sanitary facilities for the safe conveyance and
delivery thereof to their consignee at the place of consignment.
They shall provide sufficient food and water for such animals while in transit for more than twelve 12
hours or whenever necessary. (Sec. 4, R.A. 8485)
What are the requirements under the law before a carrier may transport animals?
No public utility shall transport any such animal without a written permit from the Director of the Bureau of
Animal Industry or his/her authorized representative.
What are the Prohibited acts punishable under the law on transportation of animals?
No cruel confinement or restraint shall be made on such animals while being transported. Any form of
cruelty shall be penalized even if the transporter has obtained a permit from the Bureau of Animal Industry.
Cruelty in transporting includes overcrowding, placing of animals on the trunks or under the hood
trunks of the vehicles.
21) DUTIES TO SPECIAL CLASSES OF PASSENGERS- PWD, SENIOR CITIZES AND STUDENT
17
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

There are special laws that give specific statutory rights to certain passengers because of the care that is
given to them by the State. These include specific rules on persons with disability (PWD) and senior
citizens; carriers are mandated to ensure that PWDs and senior citizens shall have equal access to air
transportation services in accordance with the mandate of B.P Blg. 344 and the Expanded Senior Act of
2010.
a. Persons with Disability. With respect to persons with disability, R.A. 7277 as amended provides:
Section 26. Mobility. – The State shall promote the mobility of disabled persons. Disabled persons
shall be allowed to drive motor vehicles, subject to the rules and regulations issued by the Land
Transportation Office pertinent to the nature of their disability and the appropriate adaptations or
modifications made on such vehicles.
Section 27. Access to Public Transport Facilities - The Department of Social Welfare and
Development shall develop a program to assist marginalized disabled persons gain access in the
use of public transport facilities. Such assistance may be in the form of subsidized transportation
fare.
The said department shall also allocate such funds as may be necessary for the effective
implementation of the public transport program for the disabled persons.
The “Accessibility Law,” as amended, shall be made suppletory to this Act.
Section 34. Public Transportation. – It shall be considered discrimination for the franchises or
operations and personnel of sea, land, and air transportation facilities to charge higher farer or to
refuse to convey a passenger, his orthopaedic devices, personal effects, and merchandises by
reason of his disability.
b. Senior Citizens Act. Senior Citizens are also given a 20% discount relative to utilization of
transportation services. In addition, Section 5(f) of the Expanded Senior Citizens Act of 2003 requires
Department of Transportation and Communication (DOTC) to develop a program to assist senior
citizens to fully gain access in the use of public transport facilities.
c. Republic Act No. 11314 or The Student Fare Discount Act. – All Filipino students – from elementary
to college, including technical-vocational school students – will get a 20% discount on all forms of land,
air, and sea transportation, for the entire time they are enrolled, including weekends and holidays. For
air and sea travel, the discount will only apply to domestic travel.
22) RULES ON TIMELY DELIVERY OF GOODS
Stipulated in Contract/Bill of Lading No stipulation
18
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

1. Carrier is bound to fulfill the contract and is 1. Within a reasonable time.
liable for any delay; no matter from what cause it 2. Carrier is bound to forward them in the 1st
may have arisen. shipment of the same or similar goods which he
may make to the point of delivery. (ART. 358
Code of Commerce)
ARTICLE 358. If there is no period fixed for the delivery of the goods the carrier shall be bound to forward
them in the first shipment of the same or similar goods which he may make point where he must deliver them;
and should he not do so, the damages caused by the delay should be for his account.
23) CONSEQUENCES OF DELAY

Excusable delays in carriage suspend, but do not generally terminate, the contract of carriage, and when the
cause is removed, the master must proceed with the voyage and make delivery.
If the delay is legally excusable, the following consequences results:

 The carrier is still liable even if the natural disaster caused the damage
 The stipulation limiting the liability of the carrier is inoperative
 The carrier is liable for the damages caused by the delay
 The consignee may exercise his right to abandon under Art 371 of the Code of Commerce
24) ABANDONMENT – ARTICLES 370 – 374 CODE OF COMMERCE
ARTICLE 370. If a period has been fixed for the delivery of the goods, it must be made within such time,
and, for failure to do so, the carrier shall pay the indemnity stipulated in the bill of lading, neither the shipper
nor the consignee being entitled to anything else.
If no indemnity has been stipulated and the delay exceeds the time fixed in the bill of lading, the carrier
shall be liable for the damages which the delay may have caused.
ARTICLE 371. In case of delay through the fault of the carrier, referred to in the preceding articles, the
consignee may leave the goods transported in the hands of the former, advising him thereof in writing before
their arrival at the point of destination.
When this abandonment takes place, the carrier shall pay the full value of the goods as if they had been lost
or mislaid.
If the abandonment is not made, the indemnification for losses and damages by reason of the delay cannot
exceed the current price which the goods transported would have had on the day and at the place in which
they should have been delivered; this same rule is to be observed in all other cases in which this indemnity
may be due.
ARTICLE 372. The value of the goods which the carrier must pay in cases if loss or misplacement shall
be determined in accordance with that declared in the bill of lading, the shipper not being allowed to
present proof that among the goods declared therein there were articles of greater value and money.
Horses, vehicles, vessels, equipment and all other principal and accessory means of transportation shall be
especially bound in favor of the shipper, although with respect to railroads said liability shall be subordinated
19
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

to the provisions of the laws of concession with respect to the property, and to what this Code established as
to the manner and form of effecting seizures and attachments against said companies.
ARTICLE 373. The carrier who makes the delivery of the merchandise to the consignee by virtue of
combined agreements or services with other carriers shall assume the obligations of those who preceded
him in the conveyance, reserving his right to proceed against the latter if he was not the party directly
responsible for the fault which gave rise to the claim of the shipper or consignee.
The carrier who makes the delivery shall likewise acquire all the actions and rights of those who preceded
him in the conveyance. The shipper and the consignee shall have an immediate right of action against the
carrier who executed the transportation contract, or against the other carriers who may have received the
goods transported without reservation.
However, the reservation made by the latter shall not relieve them from the responsibilities which they may
have incurred by their own acts.
ARTICLE 374. The consignees to whom the shipment was made may not defer the payment of the
expenses and transportation charges of the goods they receive after the lapse of twenty-four hours
following their delivery; and in case of delay in this payment, the carrier may demand the judicial sale of the
goods transported in an amount necessary to cover the cost of transportation and the expenses incurred.
25) CONFLICTS BETWEEN CONSIGNEE AND SHIPPER
In case of a conflict between the order of the shipper on the one hand and the order of the consignee on the
other, as when the shipper orders the shipping company to return or retain the goods shipped while the
consignee demands their delivery, an authority on Commercial law, said that the right of the shipper to
countermand the shipment terminates when the consignee or legitimate holder if the bill of lading appears
with such bill of lading before the carrier and makes himself a party to the contract. Prior to that time, he is
stranger to the contract.
26) DELAY TO TRANSPORT PASSENGERS
The basic rule that applies to carriage of goods shall also apply to carriage of passengers, that is, the carrier
must commence its trip within a reasonable time. A carrier is duty bound to transport the passenger with
reasonable dispatch. The carrier shall be made liable when the vessel or vehicle is unreasonably delayed.
In Trans-Asia Shipping Lines v. Court of Appeals, et al. that “as to the rights and duties of the parties arising
out of such delay, the Civil Code is silent.”
However, Article 698 which applies suppletorily to Article 1766 of the Civil Code provides for such situation
which reads:
“In case a voyage already begun should be interrupted, the passengers shall be obliged to pay
the fare in proportion to the distance covered, without right to recover for losses and damages if the
interruption is due to fortuitous event or force majeure, but with a right to indemnity if the interruption
should have been caused by the captain exclusively. If the interruption should be caused by the disability
20
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

of the vessel and a passenger should agree to await the repairs, he may not be required to pay any
increased price of passage, but his living expenses during the stay shall be for his own account.
27) ARTICLE 1755 CIVIL CODE – MEMORIZE!
ART 1755 A common carrier is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with due regard for all circumstance.
28) ARTICLES 363 TO 365 OF THE CODE OF COMMERCE
ARTICLE 363. Outside of the cases mentioned in the second paragraph of Article 361, the carrier shall be
obliged to deliver the goods shipped in the same condition in which, according to the bill of lading, they were
found at the time they were received, without any damage or impairment, and failing to do so, to pay the
value which those not delivered may have at the point and at the time at which their delivery should have
been made.
If those not delivered form part of the goods transported, the consignee may refuse to receive the latter, when
he proves that he cannot make use of them independently of the others.
ARTICLE 364. If the effect of the damage referred to in Article 361 is merely a diminution in the value of
the goods, the obligation of the carrier shall be reduced to the payment of the amount which, in the judgment
of experts, constitutes such difference in value.
ARTICLE 365. If, in consequence of the damage, the goods are rendered useless for sale and consumption
for the purposes for which they are properly destined, the consignee shall not be bound to receive them, and
he may have them in the hands of the carrier, demanding of the latter their value at the current price on that
day.
If among the damaged goods there should be some pieces in good condition and without any defect, the
foregoing provision shall be applicable with respect to those damaged and the consignee shall receive those
which are sound, this segregation to be made by distinct and separate pieces and without dividing a single
object, unless the consignee proves the impossibility of conveniently making use of them in this form.
The same rule shall be applied to merchandise in bales or packages, separating those parcels which appear
sound.
21
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

29. RATIONALE OF EXTRAORDINARY DILIGENCE
The common carrier is not the insurer of the lives and properties of the passenger and shipper. Nevertheless,
the highest degree of care is required. Commenting on the provisions of the New Civil Code, Justice J.B.L.
Reyes observed that the extraordinary diligence imposed by the Code “may result in smothering common
carriers with limited resources, and generally favors the larger entities. Whether it is advisable to place the
business in the hands of a few virtual monopolists is a question of policy, but it does not seem warranted by
present conditions.” It is clear that the danger sought to be avoided by the good Justice is no longer the
primary concern. Clearly, the business of the transportation of small companies — particularly in land
transportation — was not smothered. In the balancing of interests, the law still tilts the balance in favor of
safety of the public.
a. The Code Commission explained why extraordinary diligence must be complied with in the
performance of the functions of a common carrier:
“A common carrier is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with due regard for all circumstances.
This extraordinary diligence required of common carriers is calculated to protect the passengers from
the tragic mishaps that frequently occur in connection with rapid modern transportation. This high
standard of care is imperatively demanded by the preciousness of human life and by the
consideration that every person must in every way be safeguarded against all injury.”
b. In cases involving this duty, the Supreme Court takes judicial notice of the gross negligence and the
appalling disregard of the physical safety of passengers and property of others so commonly
exhibited today by the drivers of passenger buses and similar vehicles on our highways. In requiring
the highest possible degree of diligence from common carriers and creating a presumption of
negligence against them, the law compels them to curb the recklessness of their drivers.
30. MEANING OF EXTRAORDINARY DILIGENCE
To prove the exercise of extraordinary diligence, the carrier must do more than merely show the possibility
that some other party could be responsible for the damage. It must prove that it used all reasonable means
to ascertain the nature and characteristics of the goods tendered for transport and it exercised due care in
handling them.
a. Exercise of proper diligence requires the following: “A man must use common sense, and exercise due
reflection in all his acts; it is his duty to be cautious, careful and prudent, if not from instinct, then through fear
of recurring punishment. He is responsible for such results as anyone might foresee and for acts which no
one would have performed except through culpable abandon. Otherwise, his own person, rights and property,
and those of his fellow beings, would ever be exposed to all manner of danger and injury.”
b. The Supreme Court explained in Compania Maritima v. Court of Appeals™ that extraordinary diligence in
the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the
22
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

required precaution for avoiding damage to, or destruction of the goods entrusted to it for safe carriage and
delivery. It requires common carriers to render service with the greatest skill and foresight and to use all the
reasonable means to ascertain the nature and characteristics of goods tendered for shipment, and to exercise
due care in the handling and stowage, including such methods as their nature requires.
31. 2 REQUISITES BEFORE LIABILITY CAN BE IMPOSED
(1) There exist a contract between the passenger or the shipper and the common carrier; and
(2) That the loss, deterioration, injury or death took place during the existence of the contract.
32. GROSS NEGLIGENCE, BAD FAITH vs. PRESUMPTION OF NEGLIGENCE
In case of loss of effects or cargo or passengers or death or injuries to passengers, the common carrier is
presumed to be at fault or have acted negligently unless he had observed extraordinary diligence in the
vigilance thereof. The court need not make an express finding of fault or negligence of common carriers. The
presumption is operative even if both parties cannot establish the cause of the damage to the goods or injury
to the passenger.
There is no presumption of bad faith even if there is presumption of negligence. Bad faith should be
established by clear and convincing evidence. The law always presumes good faith such that any person
who seeks to be awarded damages due to the acts of another has the burden of proving that the latter acted
in bad faith or with ill motive. It should be noted that the finding of bad faith is necessary if the court is to
award moral and exemplary damages in breach of contract of carriage cases.
There is also no presumption that the negligence that was committed by the carrier is gross negligence.
Gross negligence amounts to bad faith and may entitle the victim or his or her heirs to an award of moral or
exemplary damages. While negligence is presumed, there must be evidence that the same negligence is so
gross that it amounts to bad faith.
33. DURATION OF THE DUTY IN CARRIAGE OF GOODS - ART. 1736 - 1738
Art. 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by the carrier for transportation until the same are
delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive
them, without prejudice to the provisions of Article 1738.
When the goods are deemed delivered to the carrier. The goods are deemed delivered to the carrier when
the goods are ready for and have been placed in the exclusive possession, custody and control of the carrier
for the purpose of their immediate transportation and the carrier has accepted them. When the carrier has
thus accepted such delivery, the liability of the carrier commences eo instanti.
(1) In Ganzon v. Court of Appeals the petitioner insisted that the scrap iron had not been unconditionally
placed under his custody and control to make him liable. The Court disagreed pointing out that the goods
23
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

were delivered for loading in the lighter. The fact that part of the shipment had not been loaded on board
the lighter did not impair the said contract of transportation as the goods remained in the custody and
control of the carrier, albeit still unloaded.
(2) In Republic of the Philippines v. Lorenzo Shipping Corp.,the representatives of the consignee signed
the delivery receipt but did not surrender the bill of lading covering the goods. It was ruled that the
obligation of the carrier could also be considered terminated despite the non-surrender of the bill of lading.
The surrender of the bill of lading is not necessary for the discharge of the obligations of the carrier.67
Article 353 of the Code of Commerce provides that after the contract has been complied with, the bill of
lading, which the carrier has issued, shall be returned to him but the bill of lading cannot be returned, the
consignee must give a receipt for the goods delivered.
Art. 1737. The common carrier's duty to observe extraordinary diligence over the goods remains in full force
and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner has
made use of the right of stoppage in transitu.
Temporary Unloading or Storage. This means that the goods have not yet been delivered to the consignee
and that the voyage of the carrier will resume.
Exception: The right of stoppage in transitu is exercised. The right of an unpaid seller to resume
possession of the goods at any time while the goods are in transit, and he will then become entitled to the
same rights in regard to the goods as he would have had if he had never parted with the possession.
The right is available if:

(1) The buyer of goods is or becomes insolvent;
(2) The unpaid seller has parted with the possession of the goods; and
(3) The goods are still in transit — from the time when they are delivered to a carrier by land, water, or air,
or other bailee for the purpose of transmission to the buyer, until the buyer, or his agent in that behalf, takes
delivery of them from such carrier or other bailee or if the goods are rejected by the buyer, and the carrier or
other bailee continues in possession of them, even if the seller has refused to receive them back.
The duty to exercise due diligence ends if the seller has made use of his right of stoppage in transitu because
in legal effect, the contract of carriage terminates when the right is exercised. Thereafter, the carrier becomes
an ordinary bailee.
Art. 1738. The extraordinary liability of the common carrier continues to be operative even during the time
the goods are stored in a warehouse of the carrier at the place of destination, until the consignee has been
advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or
otherwise dispose of them.
Cargoes generally remain under the custody of the carrier while being unloaded
24
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

34. LU DO CASE
Delivery to Customs Authorities. The implication in the case of Lu Do & Lu Ym Corporation v. I.V. Binamira,
is that, generally, the goods remain to be the responsibility of the carrier if they are still in the hands of customs
officials. There is no delivery of the cargo to the consignee, or to the person who has a right to receive them,
contemplated in Article 1736 because in such case the goods are still in the hands of the Government and
the owner cannot exercise dominion over them.
35. COMMENCEMENT OF DUTY IN CARRIAGE OF PASSENGERS - TRAINS, SEA & LAND
a. Trains. With respect to carriage of passengers by trains, the extraordinary responsibility of common
carriers commences the moment the person who purchases the ticket (or a “token” or“card”) from the carrier
presents himself at the proper place and in a proper manner to be transported with a bona fide intent to ride
the coach.
The duty of the common carrier “to provide safety to it's passengers so obligates it not only during the course
of the trip but for so long as the passenger are within its premises and where they ought to be in pursuance
to the contract of carriage.”
Definition of a passenger: A passenger is defined as 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 (10 Am. Jur. 26). The relation of carrier and passenger
commences when one puts himself in the care of the carrier, or directly under its control, with the
bona fide intention of becoming a passenger, and is accepted as such by the carrier (13 C.J.S. 1060)
— as where he makes a contract for transportation and presents himself at the proper place and in
a proper manner to be transported
b. Carriage by Sea. Similarly, with respect to carriage of passengers by sea, the duty of the carrier
commences as soon as a person with bona fide intention of taking passage places himself in the care of the
carrier or its employees and is accepted as passenger.
c. Land Transportation. On the other hand, motor vehicles like passenger jeepneys and buses are duty
bound to stop their conveyances for a reasonable length of time in order to afford passengers an opportunity
to board and enter, and they are liable for injuries suffered by boarding passengers resulting from the sudden
starting up or jerking of their conveyances while they do so.
The rule is that once a public utility bus or jeepney stops, it is making a continuous offer to bus riders.
The duty to exercise utmost diligence with respect to passengers will not ordinarily terminate until the
passenger has, after reaching his destination, safely alighted from the carrier’s conveyance or had a
reasonable opportunity to leave the carrier’s premises. All persons who remain on the premises within a
reasonable time after leaving the conveyance are to be deemed passengers, and what is a reasonable time
25
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

or a reasonable delay within this rule is to be determined from all the circumstances, and includes reasonable
time to see after his baggage and prepare for his departure.
36. ARTS. 1759 – 1763
Art. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or
wilful acts of the former's employees, although such employees may have acted beyond the scope of their
authority or in violation of the orders of the common carriers.
This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good
father of a family in the selection and supervision of their employees.
Art. 1760. The common carrier's responsibility prescribed in the preceding article cannot be eliminated or
limited by stipulation, by the posting of notices, by statements on the tickets or otherwise.
Art. 1761. The passenger must observe the diligence of a good father of a family to avoid injury to himself.
Art. 1762. The contributory negligence of the passenger does not bar recovery of damages for his death or
injuries, if the proximate cause thereof is the negligence of the common carrier, but the amount of damages
shall be equitably reduced.
Art. 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts
or negligence of other passengers or of strangers, if the common carrier's employees through the exercise
of the diligence of a good father of a family could have prevented or stopped the act or omission.
37. DUTY TO THIRD PERSONS
The duty to exercise extraordinary diligence is primarily owed to the passengers and the goods that are being
transported. However, it was ruled in one case that the duty even extends to the members of the crew or
complement operating the carrier. In an earlier case, the rule was applied to a clerk of a railroad company
who was riding the train on his way home from work. Additionally, there is authority for the view that
extraordinary diligence is owed not only to passengers or shippers but also to third persons as well.
38. STIPULATIONS ON DEGREE OF DILIGENCE & LIABILITY: GOODS VS PASSENGER
The parties may voluntarily modify the duty of the carrier by express provision of their contract. However, in
certain instances, the stipulation may be considered invalid.
In terms of 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, while in passengers there can be no stipulation lessening the utmost diligence that is owed to
passengers. Article 1757 provides that the responsibility to observe extraordinary or utmost diligence
26
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

provided for in Articles 1733 and 1755 cannot be dispensed with or lessened through stipulation or posting
of notices.
39. CONDITIONS ON DISCOUNTED FARE – RULE
In Gratuitous or reduced fare, it should be noted in this connection, however, that a passenger is still
considered as such (passenger) even if he is being carried gratuitously or under a reduced fare. This is
subject to the rule in Article 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.
In Gratuitous Passenger it is implied from Article 1758 that the extraordinary 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.
40. DEFINITION OF SEA WORTHINESS; 3 ELEMENTS (PAGE 112)
There is no provision in the Civil Code or the Code of Commerce that deals squarely on the meaning of
seaworthiness. Nevertheless, the Supreme Court explained the concept of seaworthiness in the wise:
Generally, seaworthiness is that strength, durability and engineering skill made a part of the ship’s
construction and continued maintenance, together with a competent and sufficient crew, which would
withstand the vicissitudes and dangers of the elements which might reasonably be expected or encountered
during her voyage without loss or damage to her particular cargo.
A. Insurance Code. The provisions of the Insurance Code of the Philippines as amended regarding
seaworthiness are also instructive:
SEC. 116. A ship is seaworthy when reasonably fit to perform the service and to encounter the ordinary
perils of the voyage contemplated by the parties to the policy.
SEC. 118. A warranty of seaworthiness extends not only to the condition of the structure of the ship
itself, but requires that it be properly laden, and provided with a competent master, a sufficient
number of competent officers and seamen, and the requisite appurtenances and equipment, such as
ballasts, cables and anchors, cordage and sails, food, water, fuel and lights, and other necessary or
proper stores and implements for the voyage.
SEC. 121. A ship which is seaworthy for the purpose of an insurance upon the ship may, nevertheless,
by reason of being unfitted to receive the cargo, be unseaworthy for the purpose of insurance upon the
cargo.
B. COGSA. Moreover, Section 3, paragraphs [1] and [2] of the Carriage of Goods by Sea Act provides:
SEC. 3. (1) The carrier shall be bound before and at the beginning of the voyage to exercise due
diligence to---
(a) Make the ship seaworthy;
(b) Properly man, equip, and supply the ship;
27
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

(c) Make the holds, refrigerating and cooling chambers, and all other parts of the ship in which goods
are carried, fit and safe for their reception, carriage, and preservation.
(2) The carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the
goods carried.
From the above quoted statutory rules and jurisprudence, it can be inferred that to be seaworthy, a vessel
must have such degree of fitness which an owner who is exercising extraordinary diligence would require his
vessel to have at the commencement of her voyage, having regard to all the probable circumstances of it.
Seaworthiness includes fitness of the vessel itself to withstand the rigors of the voyage, fitness of the vessel
to store the cargoes and accommodate passengers to be transported and that it is adequately equipped and
properly manned.
3 Elements:
1. Construction- the strength, durability and engineering skill of a ship’s construction. The vessel must be
fit and be expected to meet the normal hazards of the journey.
2. Maintenance- continued maintenance because it is necessary that the vessel can withstand the rigors of
the voyage.
3. Crew- competent and sufficient to withstand the vicissitudes and dangers of the elements which might
reasonably be expected or encountered during the voyage.
41. IMPLIED WARRANTY
No duty to inquire. There is an implied warranty of seaworthiness. Shippers of goods, when transacting with
common carriers, are not expected to inquire into the vessel’s seaworthiness, genuineness of its licenses
and compliance with all maritime laws. To demand more from shippers and hold them liable in case of failure,
exhibits nothing but the futility of our maritime laws insofar as the protection of the public in general is
concerned.
By the same token, passengers cannot be expected to inquire every time they board a common carrier,
whether the carrier posses the necessary papers or that all the carrier’s employees are qualified.
Such a practice would be an absurdity in a business where time is always of the essence. Considering the
nature of transportation business, passengers, and shippers alike customarily presume that common carriers
possesses all the legal requisites in its operation.
42. CARGOWORTHINESS
It means that the vessel must be sufficiently strong and equipped to carry the particular kind of cargo that
she has contracted to carry and her cargo must be so loaded that it is safe for her to proceed on her voyage.
It is important that the ship itself must not only be seaworthy to undertake the voyage but it must also be
“cargoworthy”. Even if the vessel was properly maintained and is free from defect, the carrier must not accept
28
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

goods that cannot properly be transported in the ship. The ship must be fit to carry the contemplated cargo
as a carrying receptacle.
Examples:
1. A vessel is not cargoworthy if frozen perishable goods like meat are carried even if it has defective
refrigeration equipment.
2. A vessel is not cargoworthy if iron plates which have been loaded broke loose in rough weather and went
through the ship’s side.
3. A ship may be unfit to carry the contemplated cargo because she has no sufficient means of ventilation
and yet be quite fit to make the contemplated voyage as a ship.
29
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

43. Notation on Bill of Lading - Obligation of Common Carrier
Effect of Notation of Damage in the Bill of Lading
A notation in the bill of lading at the time of loading is NOT sufficient to show pre-shipment damage
and to exempt a common carrier from liability.
Even if the fact of improper packing was known to the carrier or its crew or was apparent upon
ordinary observation, it is not relieved of liability for loss or injury resulting therefrom, once it accepts
the goods notwithstanding such condition.
In Belgian Overseas Chartering & Shipping N. V. v. Philippine First Insurance Company, Inc, steel
sheets were shipped through the petitioner carrier.
There was proof that they were received in good condition except that there was a notation in the
Bill of Lading “metal envelopes rust stained and slightly dented.” When the metal sheets were
delivered, it was discovered that the steel bands were broken, and the metal envelopes rust-stained
and heavily buckled and the contents thereof exposed and rusty. The Supreme Court still concluded
that the petitioner failed to prove that due diligence was observed. The Court explained:
“Further, petitioners failed to prove that they observed the extraordinary diligence and precaution
which the law requires a common carrier to know and to follow to avoid damage to or destruction of
the goods entrusted to it for safe carriage and delivery.
True, the words “metal envelopes rust stained and slightly dented” were noted on the Bill of Lading;
however, there is no showing that petitioners exercised due diligence to forestall or lessen the loss.
Having been in the service for several years, the master of the vessel should have known at the
outset that metal envelopes in the said state would eventually deteriorate when not properly stored
while in transit. Equipped with the proper knowledge of the nature of steel sheets in coils and of the
proper way of transporting them, the master of the vessel and his crew should have undertaken
precautionary measures to avoid possible deterioration of the cargo. But none of these measures
was taken. Having failed to discharge the burden of proving that they have exercised the
extraordinary diligence required by law, petitioners cannot escape liability for the damage to the four
coils.”
44. Negligence vs. Incompetence of the captain & crew
The common carrier must exercise due diligence in the supervision of the functions of its captain
and crew are performing their functions. If the negligence of the captain or crew can be traced
to the fact that they are really incompetent, the Limited Liability Rule cannot be invoked
because the shipowner may be deemed negligent.
Negligence on the part of the captain and crew includes failure to comply with the regulations
issued by the Maritime Industry Authority (MARINA) on the safety of the passengers.
30
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D
45. Rule on passenger safety
 Negligence on the part of the captain and crew as well as the operator includes failure to comply
with the regulations issued by the Maritime Industry Authority (MARINA) on the safety of the
passengers.
 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 a good father of
a family, but must render service with the greatest skill and utmost foresight.
 Passengers do not merely contract for transportation because they have the right to be treated by
the carrier and its employees with kindness, respect, courtesy and due consideration. They are
entitled to be protected against personal conduct, injurious language, indignities and abuses from
the said carrier and its employees.
46. Duty to take proper route
The carrier is obligated to follow the usual reasonable commercial or customary route. If there is no
evidence of the usual route, the route is presumed to be the direct geographical route. However, this
may be modified in many cases for navigational or other reasons.
a. Improper Deviation. The Code of Commerce provides for the following rules on the change of
route in overland transportation:
ARTICLE 359. If there is an agreement between the shipper and the

carrier as to the road over which the conveyance is to be made, the
carrier may not change the route, unless it be by reason of force
majeure; and should he do so without this cause, he shall be liable for
all the losses which the goods he transports may suffer from any other
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.
31
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

b. There was negligence on the part of the carrier when the vessel took a short-cut route instead of the
usual route that exposed the voyage to unexpected hazard. This constrained the captain to force the
vessel to run aground.
c. It should be noted, however, that the routes of common carriers are now approved by the
appropriate government agencies.
Thus, with respect to carriers by sea, the routes are subject to approval by the Maritime Industry
Authority and the same cannot generally be changed without the authorization from said
administrative agency.
d. In addition, improper deviation may also be a valid ground to deny a marine insurance claim under
the Insurance Code.
e. However, it was explained in one case involving transportation by air that the stipulation in the airway
bill that the carrier assumes no obligation to carry the goods in a particular route or routes is binding.
Nevertheless, the Supreme Court gave the following admonition:
f. There will be no improper deviation if the voyage is customarily in stages to replenish the ship‟s
fuel. It may be reasonable that a voyage may be in stages to enable a shipowner to start with fuel
sufficient for a stage and necessarily involves calling at a port for refueling to keep the ship
seaworthy.
47. Transshipment
DEFINITIONS OF TRANSSHIPMENT (in maritime law):
- “the act of taking cargo out of one ship and loading it in another,”
- “the transfer of goods from the vessel stipulated in the contract of affreightment to
another vessel before the place of destination named in the contract has been reached”
- “the transfer for further transportation from one ship or conveyance to another.”
Either in its ordinary or its strictly legal acceptation, there is transshipment whether or not the
same person, firm or entity owns the vessels. In other words, the fact of transshipment is not
dependent upon the ownership of the transporting ships or conveyances or in the change of
camera, but rather on the fact of actual physical transfer of cargo from one vessel to another.
It is a well-known commercial usage that transshipment of freight without legal excuse, however
competent and safe the vessel into which the transfer is made, is a violation of the contract and an
infringement of the right of the shipper, and subjects the carrier to liability if the freight is lost even
by a cause otherwise excepted.
32
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

48. Roadworthiness
o Common carriers that offer transportation by land are required to make sure that the vehicles that
they are using are in good order and condition.
o Tire blowout due to fortuitous event, and passengers were injured- common carrier LIABLE
CASE:
While the bus was running, a rear tire exploded, blasting a hole in the very place where a child was
standing with her mother. As a result, the child fell through the hole, and died that same morning
from injuries sustained in the fall.
It should be pointed out that explosion of tires are not considered fortuitous event.
RULE ON MECHANICAL DEFECTS
o In replacing certain parts of the motor vehicle, common carriers are duty bound to make sure that
the parts that they are purchasing are not defective.
o Accident resulted because of a defective brake or tire and due to a fortuitous event- common
carrier LIABLE
o Tire that was subject of a blowout is brand new- common carrier LIABLE, the duty to exercise
extraordinary diligence requires the carrier to purchase and use vehicle parts that are not
defective.
49. Traffic rules (5) + (5) = 10

The carrier fails to exercise extraordinary diligence if it will not comply with basic traffic rules. It should
be recalled that Article 2185 of the Civil Code (Art. 2185 provides that “unless there is proof to the
contrary, it is presumed that a person driving a motor vehicle has been negligent, if at the time
of mishap, he was violating any traffic regulation.") even provides for a presumption of negligence
in case the accident occurs while the operator of the motor vehicle is violating traffic rules. However, the
application of the presumption under Article 2185 of the Civil Code is not even necessary with respect
to common carriers. For the presumption under Article 2185 to operate, there must be proof of violation
of traffic rules. On the other hand, for the presumption of negligence under Article 1756 to operate (Art.
1756 provides that “in case of death of or injuries to passengers, common carriers are presumed
to have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in articles 1733 and 1755.”), all that is required is proof of
death or injury to a passenger.
Nevertheless, in cases involving breach of contract of carriage, proof of violation of traffic rules confirms
33
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

that the carrier failed to exercise extraordinary diligence. The carrier will be usually made liable and will
not overcome the presumption of negligence if there is violation of traffic rules because
extraordinary diligence on the part of the common carrier requires compliance with traffic rules and
regulations.
The basic traffic rules that must be complied with include those provided for under the Land
Transportation and Traffic Code, R.A. 4136. Other traffic rules are embodied in the ordinances issued by
the local government units and the Metro Manila Development Authority. These rules are violated if the
carrier did not comply with the rules on overtaking on a curve under Section 41 of the Code, when
there was improper parking under Section 54, when the carrier is overloaded in violation of Section
32(a), or when there was overtaking in a junction without extreme caution.
The following cases are instances when the Court found that traffic rules and regulations were violated:
(1) Violation of Section 37 thereof requiring motorist to drive on the right side of the road
and providing rules on overtaking;
(2) Speeding in violation of law providing for restriction on speed;
(3) Speeding in an intersection;
(4) A vehicle’s failure to signal while making the U- turn;
(5) The driver escaped and abandoned the victims and his truck;
(6) Driving without the license or driving alone with only a
student’s license;
(7) A motorcycle driver was not wearing a protective
headgear at the time of the accident;
(8) Overtaking in a “no-overtaking zone” particularly the place where there are two
continuous yellow lines at the center of the highway which is part of internationally recognized
pavement regulation known as the “double yellow center lines” regulation;
(9) Overtaking in an intersection; and
(10) Violating of the Metro Manila Development Authority ordinance prohibiting a
vehicle coming from a particular street from crossing another specified street or avenue.
50. Art. 2176 in relation to Art. 2180
Article 2176
Whoever by act or omission causes damage to another, there being fault or negligence, is obliged
to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
34
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D
Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is responsible.
Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged in any business or
industry.
 Under Article 2176 of NCC, where the cause of action of a passenger/shipper or a third
person who is stranger to the contract of carriage is based on act or omission ( quasi-
delict) of the employee/driver that caused the loss, injury, death or damage, the operator
is only subsidiary liable with respect to the employee/driver’s civil liability.
 However, under Article 2180, where the cause of action of a passenger/shipper is not
based on an obligation arising from the act or omission complained of as felony, the
driver and operator shall be solidarily liable with respect to damages because there is
a pre-existing contract of carriage between the passenger/shipper and the operator and
driver .
 As for a third person who is stranger to the contract of carriage where there cause of
action is based on quasi-delict or the acts or omission of its employee, the operator as
employer shall be solidarily liable for damages caused by their employees acting within
the scope of their assigned task.
51. 5 Conditions for the issuance of Certificate of Public Convenience by LTFRB
A certificate of public convenience (CPC) is an authorization granted by the LTFRB for the
operation of land transportation services for public use as required by law. Pursuant to Section
16(a) of the Public Service Act, as amended, the following requirements must be met before a CPC
may be granted, to wit:
(1) the applicant must be a citizen of the Philippines, or a corporation or co-partnership,

association or joint stock company constituted and organized under the laws of the Philippines,
60 per centum at least of the stock or paid-up capital of which belong entirely to citizens of the
Philippines;
(2) the applicant must be financially capable of undertaking the proposed service and meeting
the responsibilities incident to its operations;
(3) the applicant must prove that the operation of the public service proposed and the
authorization to do business will promote the public interest in a proper and suitable manner;
(4) the applicant must prove public necessity; and
35
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D
(5) the applicant must, at all times, be required to prove his capacity and capability to furnish the
service which he has undertaken to render. (Kilusang Mayo Uno Labor Center v. LTFRB,
G.R. No. 115381, December 23, 1984)
52. Nocum vs LBTC case

Nocum v LTBC
GR No. L-23733
Situation: Another passenger was injured because of the firecrackers and explosive materials
brought by another passenger. The passenger declared that said baggage contains clothes.
Liability: The operator cannot be said to be liable for damages sustained. In overland
transportation, the common carrier is not bound nor empowered to make an examination
on the contents of packages or bags. He cannot be subjected to any unusual search,
when he protests the innocuousness of his baggage and nothing appears to indicate
the contrary.
A carrier is ordinarily not liable for injuries to passengers from fires or explosions caused by
articles brought into its conveyances by other passengers, in the absence of any evidence that
the carrier, through its employees, was aware of the nature of the article or had any reason to
anticipate danger therefrom. Inquiry may be verbally made as to the nature of a
passenger's baggage when such is not outwardly perceptible, but beyond this,
constitutional boundaries are already in danger of being transgressed.
53. Carriage by trains - 8 rules
OBLIGATION AS TO CARRIAGE BY TRAIN
In exercising due diligence in the performance of functions, the carrier, that operates the train, must
keep and sustain competency of employees, safe condition of the platform, maintenance of train and
tracks, embarkment and disembarkment of passengers, avoidance of negligence in the operation of
the train, observation of due care in favor of passengers, precautions or warning signs, and
prevention of damage to the properties near the tracks. Otherwise, non-compliance of any of these
obligations would hold the carrier liable.
1. Competency of Employees
In the first paragraph of article 1759 of the NCC, it provides that, “common carriers are liable
for the death of or injuries to passengers through the negligence or willful acts of the former’s
employees, although such employees may have acted beyond the scope of their authority or in
violation of the orders of the common carriers”.
36
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

In which case, the carrier has the obligation to hire competent employees who have
undergone trainings, attended seminars, and experienced knowledge about the operation of trains
and facilities. Otherwise, the carrier might be liable if these employees acted within delegated
authority such as misconduct undertaken or acts causing damage to a passenger.
For example, X, as a carrier, hired Y, who is a fresh graduate engineer without license, and
no attended seminars or trainings. Subsequently, X let Y to monitor the fragile parts such as engine
of the train. As such, Y on duty did not actually know how to monitor such engine, so Y negligently
experimented the monitoring of the engine. Eventually, some passengers suffered injury and
damage. Hence, X, as a carrier, is liable for the negligence of Y, as an employee.
Also, the operator of a taxicab is liable when a taxicab passenger was deliberately killed by
the driver. (1975 Bar Question: Article 1759, NCC)
2. The Safe Condition of the Platform
This obligation is still present even at the time when the passenger is at the platform.
Otherwise, for instance, the train operator would still be liable even though the death of the victim
was sustained while such victim was still waiting for a coach on the platform of, like, LRT station.
(LRTA, et al. v. Majorie Navidad, et al., GR No. 145804)
Likewise, in another case, since the sacks of melon placed in the platform obstruct
passengers passing to and from the cars, and caused the passenger to fall as he alighted from the
train, and subsequently sustained injuries, then the negligence of the employees, in piling such
sacks, held the carrier liable. (Cangco v. Manila Railroad Company, GR No. 12191)
3. Maintenance of Train and Tracks
This obligation is to make sure that the vehicle or the means of transportation is in good and
safe working condition. Coupled with this obligation are those of which is: to keep the train fully in
the proper use and function of the ride such as controls and procedures for normal and emergency
operation; to inspect the trains before operating the same; to always test run the trains before
operating them; and, to install or set emergency procedures related to the operation of the trains.
Otherwise, the operator is liable if the train was derailed because of the defective railroad tracks
causing injury to its passengers.
For example, the brakemen or train crew member who inspects the train, and the conductor,
did not properly submitted the report about the condition of the train, in which condition, it has train
defects causing injury to some passengers. As such, the carrier contended that since there is no
proper report from its employee, then they are not liable. Unfortunately, contention regarding
absence of report to any defect in the condition of the railways is not tenable, according to the
Supreme Court, because what is more important is that the company should act on these reports
and not merely receive and file them to maintain the good condition of the train and tracks. As such,
the company is still liable. (Ma-ao Sugar Central Co., Inc. v. CA, GR No. 83491)
4. Embarkment and Disembarkment of Passengers
37
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

This obligation involves the reasonable opportunity given by the carrier or its employees to
passengers who would enter or disembark from the train. Otherwise, the carrier is liable when, for
instance, injury is sustained because of the negligence of a conductor when such conductor
prematurely announced the next flag. (Clemente vs People, GR No. L-30309)
Likewise, for example, while the passenger was alighting from the train coach, and as he
was stepping off, his feet came in contact with a sack of watermelons causing his feet to slip from,
under him, and fell violently on the platform. As such, because of the negligence of the employees
of the railroad company in piling sacks of melon in the platform, such company would be liable to
that passenger. (Cangco v. Manila Railroad Company, GR No. 12191)
Furthermore, in another case, when the child was about to exit and move out from the train,
the bag, that he was carrying, was caught by the train door as it closed. The strap of the bag was
over his shoulder, and his arm was wrenched as the train pulled away. As such, the train operator
was made liable when the passenger received injuries when the shuttle train doors closed on him in
the doorway as he attempted to exit the train and to stop the doors from closing on a child. (Saltis
v. Damler Benz, 243 Ga. App. 603)
5. Avoidance of Negligence in the Operation of the Train
This obligation, if not complied, may hold the carrier liable, such as when, the accident
occurred because the train was running at an excessive speed.
For example, X, as a passenger, embarked into the train owned by a company. The train
eventually began to move, but behind time schedule than usual, so the train hit a hard object for the
first time which caused the derailment and subsequently caused an injury on the part of X. The
company insisted that they are not negligent in the operation of the train because the derailment was
due to the presence of a stone which accidentally lodged between rails. However, the Supreme Court
ruled that even though the incident was due to that stone, the injury suffered was due to the behind
time schedule of the train, and the trip was set after leaving the switch, at a higher rate than would
ordinarily be indicated by the control at point four. (Manuel De Guia v. The Manila Electric Railroad
& Light Company, GR No. L-14335)
6. Observation of Due Care in favor of Passengers
This obligation is to observe passengers not to fall from the train. As such, non-observance
would presume negligence on the part of the carrier. For example, X, as a paying passenger, was
killed when he fell from the train because X had to sit near a door of a coach. Therein, the train was
overloaded with passengers and baggage in view of the proximity of a holiday. With no observance
given to passengers specifically to X, as a paying passenger, it is believed that negligence on the
part of the carrier is presumed (Malong v. Philippine National Railways, GR No. L-49930), even
though such incident involves the negligence of the engine driver, conductor, assistant conductor, or
any other employees. (Brinas v. People, GR No. L-30309)
7. Precautions or Warning Signs
38
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

This obligation is to avoid persons and properties from being ran or hit over by trains, and to
adopt every measure to avoid infliction of injury to these persons and properties who/which,
respectively, may happen to be on the track in front of the train engine, and to slow down, or stop
altogether if that be necessary, should the employee, such as the engine driver, have the reason to
believe that only by doing so can an accident be averted. However, it is not always the obligation of
the engine driver to stop, or even to slow down his engine, when he sees an adult pedestrian standing
or walking on or near the track, unless there is something in the appearance or conduct of the person
on foot, which would cause a prudent man to anticipate possibility that such person could not, or
would not avoid the possibility of danger by stepping aside. As such, there should be a warning by
blowing his whistle or ringing his bell to warn those persons that there is an incoming train. (The
United States v. Bonifacio, GR No. L-10563)
For example, a carabao that strayed on the track was killed when ran over by the train
because the owner of such carabao did not tie it. In here, the railroad company is not liable because
the railroad has been constructed or operated with reasonable precautions for the safety of others
and their property (Nate v. The Manila Railroad Company, GR No. L-11730).
Likewise, the carrier is not liable when an employee is trying to board the rear platform of a
car knowing that such car is moving backwards, though employee succeeded in getting a foothold,
but failed to obtain a hold of a car, then eventually fell on the ground, and was run over by the train.
(Jahara, et al. v. The Mindanao Lumber Company, GR No. 36830)
8. Prevention of Damage to the Properties near the Tracks
This obligation, if not complied, may hold the carrier liable if, for instance, its negligence
caused the destruction of neighboring properties through fire. For example, a pressurized railroad
tank car, which was loaded with butadiene, was parked on the interchange tracks in a residential
area. Eventually, the chemical leaked and ignited, in which it had spread out along ground of the
residential areas. As such, the neighborhood around the fire was evacuated. Thus, the carrier is
liable for failure to observe this obligation. (Court of Appeal of Louisiana, Fourth Circuit. IN RE:
NEW ORLEANS TRAIN CAR LEAKAGE FIRE LITIGATION. No. 2000-CA-0479)
54. Obligations of 3rd persons approaching crossing

When crossing a railroad track, either at a regular crossing or elsewhere, a person must use ordinary
care and prudence. Before he attempts to cross the track, he is bound:
(1) to use his senses

(2) to stop, look, and to listen, and
(3) to do everything that a reasonably prudent man would do.
Otherwise, he is negligent and others who have acted legally should not be punished for his lack of
care.
General Principles:
(1) A railroad track is in itself a notice of warning of danger. (US v. Mananquil)
39
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

(2) Railroad trains rarely pass over tracks without noise and generally, their presence is easily detected
using ordinary precautions. (Yamada v. The Manila Railroad Company)
(3) Rights and obligations between the public and a railroad company at a public crossing are mutual
and reciprocal. As to 3rd persons approaching crossing, reasonable or ordinary care must be
commensurate with the risk and danger involved. (Junio v. The Manila Road Company)
GR: A person in control of an automobile who crosses a railroad and desires to cross it is bound to take
precaution and control over the car as to be able to stop it immediately at a moment’s notice.
Otherwise, he is guilty of criminal negligence, provided a collision occurs and injury results.
XPN: The railroad track is abandoned and is being actually dismantled.(Aguilar v. People)
Rules from cases:
(1) Solidary Liability
An operator is solidarily liable when its negligent driver crossed a railroad where it was not permitted
to do so, even if it was used as a shortcut. Before crossing a railroad, one must slow down or go to
a full stop in observance of the right of way as defined by traffic laws and regulations. (Sps. Perena
v. Sps. Nicolas)
(2) Through Street
One must bring to a full stop moving vehicles in public highways before traversing any “through
street.” However, this obligation only arises from the time the “through street” or crossing is so
designated and sign-posted. (PNR Corporation and Borja v. CA)
(3) Test for Negligence
Guide question: Would the accident be avoided if only the driver took the simplest means of giving
his senses an opportunity to protect him or his passengers before crossing the track? (Yamada v.
The Manila Railroad Company)
There is no uniform, absolute, hard, and fast rule. Each case of negligence must be decided in
accordance with the peculiar circumstances that present themselves. There must be that observance of
that degree of care, precaution, and vigilance which the specific situation demands. (Corliss v. The
Manila Railroad Company)
What constitute ordinary care and diligence depends on the circumstances of each particular case. The
degree of care differs in different cases. Greater care is necessary in crossing a road where the cars are
running at high speed and close together than where they are running at less speed and remote from
one another. Greater care is necessary when the view of the tracks is obstructed than when it is not.
(Yamada v. The Manila Railroad Company)
(4) No Negligence
40
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

There is no negligence when damages sustained were due to a freak accident so unusual and so
unique as to defy expectations. In this case, the accident was attended by several circumstances:
the right front wheel of the car got stuck into a rut, the railroad was preceded by a curve, and despite
the driver getting out to signal the oncoming train, stopping would have been too late because the
train was running at a high speed. (Faraon v. Priela)
55. Self-imposed flagman

 Rule when the use of flagman was self-imposed
- The abandonment thereof may constitute negligence. In the case of (Philippine National
Railways vs. Intermediate Appellate Court) the court concluded that the abandonment by the PNR
of the use of crossing bar at the intersection constitute negligence, as its installation has become
imperative, because of the prevailing circumstances in the place.
56. Rules on passenger baggage (Art. 1754) - Checked-in v. Hand-carried
ARTICLE 1754. The provisions of Articles 1733 to 1753 shall apply to the passenger‟s baggage
which is not in his personal custody or in that of his employee. As to other baggage, the rules in
Articles 1998 and 2000 to 2003 concerning the responsibility of hotel-keepers shall be applicable.
LTFRB RULES.
In land transportation, the conditions for the issuance of a Certificate of Public Convenience for Public Utility
Vehicles imposed by the Land Transportation Franchising Regulatory Board (LTFRB) include the following
rules:
(1) Every passenger is entitled to a free carriage of ten kilograms of baggage and shall pay the
corresponding freightage for excess weight;
(2) When the PUV operator‟s unit/s carry both passengers and freight, the freight shall be placed
in a separate compartment, except packages or bundles the size of which will allow placement
under the seats without causing inconvenience to, and compromising the safety of, the other
passengers;
(3) In case freight is carried on top of Public Utility Buses, it shall not exceed 20 kilos per square
meter of roof area, distributed so that it will not endanger the lives of passengers or stability of
the bus unit;
(4) The PUV operator shall not load animals of any kind, except fowls. In the carriage of such
fowls and other animals, the convenience, comfort and safety of the passengers shall not in any
way be sacrificed. Any cargo that emit foul odor shall be covered with canvass or any other
suitable material so that it will not be offensive to passengers.
CHECKED-IN BAGGAGE
Baggage that are “checked- in” or delivered to the carrier are governed by the rules discussed above
regarding carriage of goods. In other words, the 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.
41
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D
Thus, in Sarkies Tours Philippines, Inc. v. Honorable Court of Appeals, et al., the three pieces of
luggage of a passenger who was on her way to Legaspi City were kept in the baggage compartment
of the bus. During the stopover at Daet, it was discovered that only one bag remained in the
compartment that was already open. The cause of the loss was the negligence of the carrier in not
ensuring that the doors of the baggage compartment of the bus were securely fastened. Articles
1733, 1734, and 1736 of the Civil Code were applied to hold the carrier liable.
HAND CARRIED LUGGAGE
If the passenger had hand carried luggage, the rules under Articles 1998, 2000 to 2003 of the Civil
Code apply. The said Articles provide:
Art. 1998. The deposit of effects made by the travellers in hotels or inns shall also be regarded as
necessary.
The keepers of hotels or inns shall be responsible for them as depositaries, provided that notice was
given to them, or to their employees, of the effects brought by the guests and that, on the part of the
latter, they take the precautions which said hotel-keepers or their substitutes advised relative to the
care and vigilance of their effects.
Art. 2000. The responsibility referred to in the two preceding articles shall include the loss of, or
injury to the personal property of the guests caused by the servants or employees of the keepers of
hotels or inns as well as strangers; but not that which may proceed from any force majeure. The fact
that travellers are constrained to rely on the vigilance of the keeper of the hotels or inns shall be
considered in determining the degree of care required of him.
Art. 2001. The act of a thief or robber, who has entered the hotel is not deemed force majeure,
unless it is done with the use of arms or through an irresistible force.
Art. 2002. The hotel-keeper is not liable for compensation if the loss is due to the acts of the guest,
his family, servants or visitors, or if the loss arises from the character of the things brought into the
hotel.
Art. 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect
that he is not liable for the articles brought by the guest.
Any stipulation between the hotelkeeper and the guest whereby the responsibility of the former as
set forth in Articles 1998 to 2001 is suppressed or diminished shall be Void.
a. The above-quoted provisions on necessary deposit apply to thecontract of carriage with

respect to hand-carried baggage. Thus, the passenger are duty bound to:
(1) To give notice to the common carrier or the carriers employees, of the effects brought by
the passenger; and
(2) To take the precautions which the common carrier or their substitutes advised relative
to the care and vigilance of their effects.
42
1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D
e.g. If the passenger may be required to place his or her hand-carried baggage in the designated
baggage compartment near his seat. If the passenger does not comply, the carrier may claim
that it is not responsible for the damage that may be caused to the baggage that could have
been avoided had the passenger complied with the rule.
b. It is believed, however, the duty to exercise extraordinary diligence and the presumption of
negligence applies even for hand- carried luggage. The fact that rules on necessary deposit
apply with respect to hand-carried baggage does not mean that the carrier is relieved from its
duties. As applied to common carriers, Articles 1998, 2000 to 2003 of the New Civil Code merely
impose additional duties and obligations on the part of the parties and identify when certain
defenses are available to the carrier.
43

Definition of Contract of Carriage: (Elements) Common Carriers Are

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Definition of Contract of Carriage: (Elements) Common Carriers Are

Uploaded by

Copyright:

Available Formats

REVIEWER ON TRANSPORTATION LAW – Submitted to Atty.

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

1. DEFINITION OF CONTRACT OF CARRIAGE

[Elements] Common carriers are:

2. PERFECTION OF CONTRACT OF CARRIAGE

3. WHAT ARE THE FORMALITIES REQUIRED FOR A CONTRACT OF CARRIAGE?

Written contract not essential, it is consensual.

4. TRUE TEST OF CONTRACT OF CARRIER

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

ISSUE: Is a School Bus considered a private carrier?

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

5. 9 CHARACTERISTICS OF A CONTRACT OF CARRIAGE (COMMON CARRIER)

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

CASE: PEDRO DE GUZMAN v CA, GR No. L-47822, December 22, 1988

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

RULING: Yes. FPIC is a common carrier.

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

8. CHARTER PARTY (DEMISE/BAREBACK VS. VOYAGE/TIME CHARTER) VS. SLOT CHARTER

 A ‘charter-party’ is defined as a contract by which an entire ship, or some principal part

Charter parties are of two types:

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

BAREBOAT OR DEMISE CHARTER PARTY VS. CONTRACT OF AFFREIGHTMENT

SLOT CHARTER OR SPACE CHARTER AGREEMENT

HELD: No, it is not applicable.

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

10. PLANTERS PRODUCTS v. CA G.R. No. 101503 September 15, 1993

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

ISSUE: Whether a common carrier becomes a private carrier by reason of a charter-party.

Charter parties are of two types:

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

11. COMMON CARRIER DISTINGUISHED FROM TOWAGE.

COMMON CARRIER DISTINGUISHED FROM ARRASTRE.

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

COMMON CARRIER DISTINGUISHED FROM STEVEDORING.

COMMON CARRIER DISTINGUISHED FROM TRAVEL AGENCY

12. TRAMP SERVICE AND LINE SERVICE

Cargo operation may be classified into two types

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

An entity that provides tramp service is only referred to as a contract carrier.

REGISTRATION OF SHIP FOR DOMESTIC TRADE

13. GOVERNING LAWS & HIERARCHY OF APPLICABLE LAWS

The rules with respect to applicable laws were summarized, thus:

b) Carriage from Foreign Ports to Philippine Ports

c) Carriage from Philippine Ports to Foreign Ports

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

14. REGISTERED OWNERS RULE

REGISTERED OWNER RULE AND KABIT SYSTEM.

REGISTERED OWNER RULE.

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

THE REGISTERED OWNER RULE APPLIES IN A FINANCIAL LEASE.

THE KABIT SYSTEM

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

16) 3 CONDITIONS FOR THE ISSUANCE OF CERTIFICATE OF PUBLIC CONVENIENCE, BASIC

1. The applicant must be a citizen of the Philippines, or a corporation or co-partnership, association or

17) BOUNDARY SYSTEM

18) BASIC OBLIGATIONS OF THE COMMON CARRIER

1. To accept passengers and goods without discrimination.

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

2. To seasonably deliver the goods or bring the passenger to the destination.

4. To deliver the goods to the proper person

5. To exercise extraordinary diligence in the performance of its duties

1-14: JD-3A; 15-28 JD 3-B; 29-42 JD-3C; 43-54 JD-3D

20) TRANSPORTATION OF ANIMALS