TRANSPORTATION LAW 2013-2014 *405* TLD-HYC

CAVEAT: Ang orals na part, idk if sakto or dili ang mga answer, amo lang TRANSPORTATION LAW
gipakita para basin mubalik iya mga questions so you have an idea unsa ang
mga questions... ktnxbye CHAPTER ONE – GENERAL CONSIDERATIONS

 LONG AWAITED POINTERS JUD AMONG I.UNA, print at your own ORALS:
risk napud ta ani ha? I WARNED YOU!!!
 FIRST TIMERS: SCAN first before PRINTING.... SCAN, SCAN, AND  WHAT IS A CONTRACT OF TRANSPORTATION?
EDIT OR WHATEVER. Yay, this is a very kalas-ink transcript... ohh
ug maka.delete rapud mo sa orals if you like.... There is a contract of transportation when a person obligates
himself to transport persons or property from one place to another
Pointers in Transportation Law:
for a consideration (AH)
1. Contract of Carriage:
 WHO IS THAT PERSON WHO OBLIGES TRANSPORTING?
 Consignee as party
 Who is a passenger?
Asoque: Passenger
2. Common Carrier (CC):
 WHO IS THAT PERSON WHO OBLIGED HIMSELF TO
 Characteristics of CC TRANSPORT ANOTHER?
 Materiality of ownership of vessel vis-à-vis liability
 Travel agent, pipeline operator
Asoque: Common Carrier
 Registered owner rule and kabit system
 Obligations of CC (i.e., natural disaster and force
majeure as defenses, delay in transportation,  WHO ARE PARTIES TO A CONTRACT OF
presumption of negligence and how to rebut it, TRANSPORTATION?
Art. 1759 and 1763, NCC, contributory negligence,
hand carried baggage)
Asoque: Passenger and Common Carrier
 Diligence required of CC and of passenger
 Governing laws
 WITH RESPECT TO?
3. Extraordinary Diligence
Asoque: Transportation of Persons
 Why CC is obligated to observe?
 Inspection of carrier
 Surrender of bill (Art. 353, CC)  WHAT ABOUT WITH RESPECT TO GOODS?

4. Bill of Lading (BL): Asoque: Shipper, Common Carrier and Consignee

 Character of BL  WHY IS CONSIGNEE PARTY TO A CONTRACT?

 Clean bill and foul bill
 Notice of claim (Art. 366, CC)
 COGSA (misdelivery, limitation of liability, notice of
claim) Ambot if naa ba tanan sa discussion niya
ang g.butang niya diri, g.dungag nlng pud nako
ang sa libro kevs...
 Paramount clause IDK this animal...
 Validity of stipulations (i.e., Arts. 1744, 1745, 1749
and 1750, NCC)
5. Actions and Damages
 Culpa contractual v. culpa aquiliana
 Solidary liability
 Death indemnity, loss of earning capacity
 Concepts and application of MENTAL
Asoque: Consignee is the one who receives the goods from the
shipper through the common carrier
 GIVE AN EXAMPLE OF A CONSIGNEE AS PARTY TO A
CONTRACT
Asoque: (Everett Steamship vs. CA)  There was a contract of
carriage between a common carrier (Everett) and a shipper
(Maruman Trading). The consignee (Hernandez Trading) wants to
get supplies from Maruman. The evidence of the contract was a bill
of lading signed by Maruman and Everett? Everett wanted
Hernandez to pay for the loss of the train... Hernandez pretended
that he was not part of the contract between Maruman and Everett
wherein Everett’s liability would only be 100,000 because Hernandez
did not sign the contract. There was a demand upon Hernandez.
Everett would only pay up to 100,000 and not the entire shipment.
Hernandez then filed a case against Everett.

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Supreme Court said that even though Hernandez did not sign or was
not part of the contract, he is deemed to be part of it because he
demanded payment since he accepted the goods.
SC: The consignee may be deemed to be bound by the terms and
conditions of the bill of lading where it was established that he
accepted the same and is trying to enforce the agreement (Everett
Shipping).
 WHICH IS IT, THE DELIVERY OF THE GOODS OR THE
DEMAND FOR PAYMENT?
Asoque: Demand for delivery of the goods
 WHAT ABOUT DEMAND FOR PAYMENT? WHAT IS THE
SIGNIFICANCE OF THE DEMAND AND THE ACCEPTANCE?
Asoque: If he demands, he is abiding by the contract. If he accepts,
he also submits to the contract
Licup: There are two possibilities where the consignee may be bound
by the contract. First: if there is an agency relation between the
shipper and the consignee. Second is when the consignee demands
the fulfilment of the stipulations in the bill of lading. If you do not
want to pay, we can raise a defense by saying that you did not ask
for the importation of the goods, denying any agency relation with
the shipper and second is that, you refuse to accept the bill of lading.
 ILLUSTRATE “DEMAND FOR FULFILLMENT OF THE
CONTRACT”
Licup: For instance, there is a stipulation in the bill of lading saying
that the carrier only has limited liability. If the consignee will sue the
carrier for the actual value of the goods, the consignee is actually
demanding for fulfilment of the contract.
 DOES THE PHRASE “DEMAND FOR FULFILLMENT OF THE
CONTRACT” ACTUALLY REQUIRE THE FILING OF A CASE IN
COURT?
Licup: I don’t think so. Probably only a demand to the carrier to
deliver the goods. If the consignee already knows that the goods are
missing, demand for damages.
 WHO IS A CARRIER?
(Spouses Pereña vs. Spouses Zarate)
 TWO CLASSIFICATIONS OF A CARRIER
Alo: Common and Private
 DISTINCTION BETWEEN COMMON AND PRIVATE
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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 a general
business or occupation, although involving the carriage of the goods
for a fee, the person or corporation offering such service is a private
carrier. (Planters Products from AH)
 EXAMPLE OF A SINGLE TRANSACTION THAT WOULD FALL
IN A PRIVATE CARRIER
Alo: Mr. Gocuan asks me to take him to the airport for a one-time
transaction. One-time transaction is an isolated transaction.
Happens only ONCE.
 IF YOUR SERVICE TO MR. GOCUAN HAPPENS NOT ONCE
BUT TWICE, ARE YOU A PRIVATE CARRIER?
Alo: Yes. Even though it happened more than once, as long as it’s not
a part of my general course of business.
 BUT IS IT YOUR “OCCASIONAL” COURSE OF BUSINESS?
Alo: Perhaps.
 ARE YOU AWARE THAT IN DE GUZMAN, THERE IS NO
DISTINCTION? ....
 EXAMPLE, YOU ARE ALL LIVING IN THE SAME SUBDIVISION,
IN GOING TO YOUR WORK, YOU PASS THE WORKPLACE OF
YOUR NEIGHBORS. THEY RIDE WITH YOU AND PAY LESS
THAN THE AMOUNT REQUIRED IN OTHER MODES OF
TRANSPORTATION. YOU HAVE TWO CLIENTS (ASOQUE
AND GOCUAN) AND YOU’RE DOING THIS IN A DAILY BASIS.
ARE YOU A PRIVATE OR COMMON CARRIER?
Alo: You are already a Common Carrier.
 IS IT NOT THAT YOUR TRANSACTION WITH ASOQUE IS A
SINGLE TRANSACTION AND ANOTHER SINGLE
TRANSACTION WITH GOCUAN?
Alo: Special carrier should be for a particular instance only.
(na.confused nako unsaon pag incorporate sa ila oral battle, sorry)
 WHO IS A COMMON CARRIER?
Article 1732 (NCC): Common carriers are persons, corporations, firms
or associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public.
 WHAT IF IT IS BY MEANS OF A “PIPELINE”? (First Philippine
Industrial Case)
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Burdeos: A pipeline operator is considered a common carrier. Means
of transportation does not matter provided that the goods or
persons are transported from one place to another.
 ARE YOU SAYING THAT THE “TRANSPORTING FROM ONE
PLACE TO ANOTHER” IS A REQUISITE FOR THE COMMON
OR PRIVATE CARRIER?
Burdeos: Not necessarily. There are instances where, for example, in
a bus or jeepney, even though the purpose is for transportation, as
long as the person is inside the vehicle, the obligation already arises.
For a jeepney, the moment the passenger catches the driver’s
attention like the “para action”.
 IS IT ALWAYS NECESSARY THAT THE PASSENGER MUST
MAKE SUCH SIGNAL TO THE DRIVER?
Burdeos: Not necessary. There are also instances where the jeepneys
have their own stopovers.
 GIVE AN EXAMPLE WHERE THE PASSENGER DID NOT MAKE
A SIGNAL AND YET THERE WAS A PERFECTED CONTRACT
OF CARRIAGE BETWEEN THE CARRIER AND THE
PASSENGER.
Burdeos: The moment the passenger already has his ticket for the
train and the moment he is already in the premises where the train
passes waiting for the train to come. For example there was an
accident due to the negligence of the driver, the train agency or the
driver will be held liable for the negligence.
 WHAT IS THAT “PREMISES” YOU SPEAK OF?
Burdeos: The premises covered by the contract. The stopovers of the
train.
 FOR A PERFECTED CONTRACT OF CARRIAGE, WHAT ARE
THE REQUIREMENTS INSOFAR AS TRAIN IS CONCERNED?
A person who wants to board a train in a railway station must
purchase a ticket and must present himself at the proper place and
in a proper manner for transportation. Such person must have a
bona fide intention to use the facilities of the carrier, possess
sufficient fare with which to pay for his passage, and present himself
to the carrier for transportation in the place and manner provided.
(AH)
 EXAMPLE, IF THE PERSON, RIGHT AFTER PURCHASING THE
TOKEN, WENT TO THE COMFORT ROOM AND WHILE
INSIDE, HE WAS SHOT TO DEATH, IS THE CARRIER LIABLE
FOR THE DEATH OF THAT PERSON?
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Burdeos: No. In order for the train agency to be liable, it must be in
relation to the job of the carrier that is to transport the passenger.
 DO YOU KNOW WHAT IS THE PURPOSE OF THAT PERSON
IN GOING TO THE COMFORT ROOM?
Burdeos: No.
 IS THE PURPOSE OR INTENTION RELEVANT?
Burdeos: I believe so. The passenger must have the intention to use
the facilities for the carrier to be held liable.
 IF THE PURPOSE IS TO HIDE SOMETHING ILLEGAL?
Burdeos: The carrier is no longer liable.
-o- DISCUSSION -o-
STOWAWAY - a person who secretly boarded a mode of conveyance
(carrier is not aware that there is this person who is a stowaway)
The key there is AWARENESS. If the carrier is aware and allowed that
person to ride even without any fare being paid (probably out of
pity), then the carrier is still liable/responsible as a common carrier.
CONTRACT OF TRANSPORTATION
Definition is one-sided since it talks/focuses on the person who
undertakes or obligates to transport persons or goods from one
place to another for a consideration or remuneration.
Who are these persons who obligates? CARRIER – Either Common or
Private
TYPES of CONTRACT:
*CONTRACT TO CARRY – perfected by mere consent
 British Airways vs. CA: an action for damages may be
sustained for breach of contract to carry
*CONTRACT OF CARRIAGE – actual use
 Ganzon vs. CA: The vessel that would carry the goods to
the place of destination was docked meters away from the
port. So that the goods can be placed into the vessel, they
have to use a lighter (smaller boats). So they have to put
the goods to that lighter or barge before they are placed
into that vessel that would bring the goods to the place of
destination. It so happened, the employees/crew in that
lighter/barge were the same employees of the owner of
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the vessel. So when the goods were placed on that
barge/lighter, the lighter sank and the goods perished.
 ISSUE: WON there was perfected contract of carriage
 SC: YES. The employees the manning the lighter/barge
were employees of the owner of that vessel. (SAME)
 BUT: if you have to revise the facts, assuming that there is
nothing to connect those that manned the lighter of the
barge and the owner of that vessel  SIR: IMO, there is
NO perfected contract of carriage. Therefore, the vessel
can always say that we have no responsibility.
 Why was there the “actual use” component (not mere
consent) of the contract? BECAUSE the goods were already
unconditionally placed/loaded on the barge/lighter taking
cue of the actual use of the carrier that makes it a real
contract.
WHY are we so concerned about common carrier and private?
BECAUSE of the THREE (3) FACTORS.
1. LAW APPLICABLE
 Common Carrier – CIVIL CODE
 Private Carrier – CONTRACT
2. STANDARD OF DILIGENCE REQUIRED
 Common – Extraordinary
 Private – Ordinary
3. BURDEN OF PROOF
 Common – no burden of proof; burden of proof
is on the carrier to dispute presumption of
negligence
 Private – burden of proof lies on the one suing
the case (based on quasi-delict)
HOW is this perfected Contract of Carriage MANIFESTED?
 You have the 3 cases: DANGWA, KOREAN AIRLINES (with
respect to airplane), LRTA vs. NAVIDAD (trains)
DANGWA vs. CA (still the applicable case when it comes to
perfection)
*CAUTION: while we know the prevailing doctrine, it is possible that
the circumstances maybe different.
- E.G. If we take the cue on the case of DANGWA, does it mean that
every time a bus or jeepney stops, it is considered to be inviting
passengers? NOT NECESSARILY, because there may be a reason for
stopping.
 Assuming at the time a person tries to board or boarded a
jeepney or bus was not with the knowledge or consent of
*405* TLD-HYC
the driver or conductor, then there can be no perfected
contract.
SIR: I believe the reason why the SC has held on the case of DANGWA
that it was a perfected contract of carriage was because Cudiamat
was already standing on the platform and the conductor was
already aware that he was there standing on the platform.
 If the situation was that he was still trying to catch up and
the driver or conductor does not know that he was trying
to catch up, I would think there can be no perfected
contract of carriage. But take note, it is a question of
testimonial evidence.
AIRPLANE (KOREAN AIRLINES)
Several circumstances considered by the Court:
 The name of the passenger was already placed on the
manifest, checked in, clearance from immigration and
customs, boarded the shuttle, proceeded to the ramp and
the baggage was already loaded.
WHAT IF: a person is still walking along the chute leading to the
aircraft, can that person be considered as already a passenger?
What if there was a bomb in the chute, it exploded and caused
injuries to those persons walking along the chute, is the carrier
responsible?
 DEFENSE OF CARRIER: While there was a contract to carry,
there was no perfected contract of carriage here. It was
still outside of our premises, outside of the aircraft.
 TAKE NOTE: the chute is not owned by the carrier, it is part
of the facility of the airport terminal. To be safe, sue both
the carrier and the operator of the terminal for negligence.
WHAT IF: you are about to cross that portion connecting the chute
and the aircraft, ni.uyog ang aircraft kay ni.hangin, nya natangtang
ang chute, then you fell on the ground, is there a perfected contract
of carriage?
 You can use KOREAN AIRLINES but the defense is still non-
perfection of the contract aside from fortuitous event,
natural calamity or force majeure.
TRAIN (LRTA VS. NAVIDAD)
IMPORTANT: The person should be at the PROPER PLACE.
IF you go to the C.R., depends on what you are doing:
 Peeing  part of the proper place because otherwise they
would not put the C.R. there if it is not to be used.
 Committing a crime  SIR: you are not a passenger
because that facility is not for an act contrary to law.
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CONSIGNEE BEING A PARTY
Two cases: Everett vs. CA and MOF vs. Shin Yang
Consignee is originally not a party to the contract, normally
evidenced by a bill of lading, but it becomes a party when he
demands fulfilment of that stipulation.
EVERETT CASE: there was a demand and the filing of a case.
 It is not necessary that there should be “filing of a case” in
order to show “demanding fulfilment” although that is
what happened in the case of Everett. WHY? The case of
Everett cited several cases where there was only a demand
made.
 SIR: personally, I don’t think that the filing of a case is a
requisite of the phrase “demanding fulfilment in the
stipulation in a bill of lading”.
SHIN YANG CASE: Shin Yang contended that it did not cause the
importation and that the bill of lading was prepared without its
consent. (Because the expenses, ang pabayron kay si Shin Yang)
 Would it matter if dili si Shin Yang ang pabayron?
PROBABLY, he could have accepted it and of course upon
accepting it, he would have been considered as a party to
the contract.
Shin Yang consistently denied in all of its pleadings that it authorized
Halla Trading to ship the goods or that it got hold of the Bill of Lading
covering the shipment or that it demanded the release of the cargo.
 It is not necessary that you should be sending a demand
letter. If you demand for the delivery of the cargo, then
you are making yourself a party to the contract.
 There can be several manifestations of demanding for the
performance of that stipulation.
CARRIER
DEFINITION OF A CARRIER: SPS. PEREÑA VS. SPS. ZARATE
 A carrier is a person or corporation who undertakes to
transport or convey goods or persons from one place to
another, gratuitously or for hire.
 Similar to the definition of a Contract of Transpo but
instead of referring it to contract, this time, the Court said
a Carrier is a PERSON or CORPORATION.
 “GRATUITOUSLY OR FOR HIRE”  even if the passenger
forgot to pay, that is not an excuse for the carrier not to
perform its obligation under the law. (It is different if “nag-
limot2x ka” because you do not have the bona fide
intention to ride since you did not bring something)
 SIR: the word “gratuitously” depends on the circumstances
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WHAT IF: pana.ugon ka? That is a VIOLATION.
 It is the carrier’s responsibility to make sure that a person
who it invited for transportation should be checked first if
he has the money to pay.
 Buses that use the “puncher2x method”, that is the
carrier’s risk.
Q&A:
*In stowaway, that is not a question in consideration. It is a question
of the carrier’s awareness that you were there. So how can it be
found to comply with its obligation when the carrier is not aware
that you were there because of the secrecy in boarding the
conveyance.
*Kanang ampao vendors mukalit lang ug sakay? That should not
have been allowed. Assuming that happens, the carrier is aware that
they are there. What the driver should do is stop and make them go
down because there was no contract.
- if they are allowed to board and sell in the bus, then they are
considered as passengers.
*What if sa dagat? That is one of the risks that the carrier would
have to shoulder because normally, the ticket would have to be
inspected.
- CARRIER’s DEFENSE: advise the person that there was no contract
of carriage or that I am not responsible for whatever might happen
to him (then ilabay sa dagat :p)
-o- ADDITIONAL MOOLAH -o-
Kay wa na apil sa discussion ni sir pero apil sa iya pointers (ALL
FROM THE BOOK –AH)
WHO IS A PASSENGER?
A passenger is defined as one who travels in a public conveyance by
virtue of contract, express or implied, with the carrier as to the
payment of fare or that which is accepted as an equivalent thereof.
-o- Well, carry on ta sa discussion -o-
CONCERNS ON THE CONTRACT OF CARRIAGE:
*IS IT THE SAME AS TOWAGE? NO (AH p. 21)
*STEVEDORING? It is also different.
- Stevedoring is actually the transportation of goods in the holds of
the vessel or from the ship’s tackle (the literal edge of the vessel) to
the cargo hold.
- Arrastre  within the ship’s tackle going to the warehouse
*WHAT ABOUT RENT-A-CAR?
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 Rent-a-car is a contract of lease. Concept of chartered
party may apply (affreightment, bareboat or demise)
 Affreightment  there is a driver placed by the owner of
the car rental
 Bareboat or demise  no driver placed
 The moment that you are the one leasing, the charterer or
the lessee and you used it (e.g. namasahero ka), then you
are a common carrier.
*WHAT ABOUT FUN RIDE OR AMUSEMENT RIDE?
- bump cars, Ferris wheel, etc.
- In Article 1732, the word used there is “transportation”.
ISSUE: is there transportation if you start at one point and you end
at the same point (e.g. roller coaster)?
 If your client is the one injured, argue that the owner-
operator is a common carrier
 If your client is the operator, argue that it is a private
carrier
 Since our law is Anglo-American, in the US, there was
already a decision involving Disney Land. The Court held
that Disney Land is a Common Carrier.
 DISNEY LAND CASE (L.A.): It was a rollercoaster ride, one of
the honeymooners had an internal bleeding in the head
resulting from the ride.
WHAT IS THE DISTINGUISHING FACTORS BETWEEN COMMON AND
PRIVATE?
1. PUBLIC EMPLOYMENT
 Common – Services are offered to the public
such that the carrier cannot refuse
 Private – If the carrier can refuse
2. REGULATION – Different colored plate numbers
 Common – Yellow plates
 Private – Green plates
 Airport taxis  combination of tourism, yellow
with a tinge of green
 School buses are common carriers  advised to
have their vehicles registered with LTFRB and
have their plates issued
 Vehicles from Chonghua to Fuente  subject to
regulation
 Vehicles ferrying free rides by mall owners,
Carpools  Common
SIR: IMO, it doesn’t matter if you publish, what matters is that you
act (word used by the Court in the De Guzman Case) undertaking to
transport persons or goods, it qualifies as a common carrier.
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Q&A: If you bring your friend to the airport for a fee, are you a
common carrier? Not necessarily, because if you are only obligated
to that person and no one else, you are a private carrier because it is
exclusive.
 SIR: IMO, one person is not considered “public”. Probably
two, I will concede.
 Frequency is not an issue. It can be occasional, scheduled,
etc.
 If for several classmates for a fee, even if only once, you
are a common carrier. Even if it is free, under 1758, you
are still a common carrier.
DOES the case of Home Insurance on Private Carriers still apply?
 YES. But in the case of Planters, growing concern for
protection, safety of the public, then we cannot anymore
apply Home Insurance.
 However, Home Insurance case was decided by the Court
en banc, Planters was by division.
 FGU VS. G.P. SARMIENTO: SC held that G.P. Sarmiento was
a private carrier because of the exclusivity of the contract
(only one client).
 No case yet where two or three clients were catered. SIR:
IMO, I would say you are common carrier.
 VALENCIA: From Davao to Cagayan de Oro, he let him ride
at the back (outside) of the vehicle instead of inside.
Injured. SC: Private Carrier, only happened once and only
for that person.
FUNERAL PARLOR? Goods mana or both  Common
 Sps. Cruz: can be considered as a package already
AMBULANCE OPERATOR? Common carrier, though no one saw them
fit to be regulated maybe because it may hamper the services of the
hospital. But under 1732, it offers to the public.
 Ambulances are considered as emergency vehicles insofar
as traffic regulations are concerned but not under 1732.
What is the effect of a WAIVER?
 It is VOID but assuming that there will be people who will
be injured and assuming that they all signed a waiver, will
all of them file a case? Probably not.
 And assuming that they will all file a case and my defense
is that they all signed a waiver, are you 100% sure that the
judge will rule in their favour? Not necessarily, so the
waiver can help.
Whether the owner of a TOWING company is a common carrier?
 Issue is whether they are offering their services to the
public.
 One side: we are only forced to pull out this vehicle
because of the violation
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 Other side: You are offering your services to the public CHAPTER TWO – OBLIGATIONS OF THE PARTIES
because if there are those who will contract with you for
the towing of their vehicle, then that is offering your Discussion (continuation for Chapter 1)
services to the public.
If there is no consideration then the carrier is not common
pursuant to art. 1732?
SKYDIVE? Prior to skydive, you are being transported there  there
is a contract of transpo
SPS. PEREÑA VS. SPS. ZARATE case –
 If the contract is only to transport you up there before you
will dive, then that is the extent of the contract. The “gratuitously or for consideration” – still considered as
moment you dive, no more liability. But the concern there common carrier. I don’t know how the Supreme Court will
is the safety of the persons who will participate but the explain why a carrier can be considered a common carrier even
counterargument is that it is not the general public which if it is gratuitous carrier. Although you can also say that since
is involved since, pila raman ang mu.skydive? that the definition of carrier in this case was so broad that it
includes common as well as private.
NOTE: LACKING ITEMS AND CASES
- Governing Laws In Carpooling, there is a consideration. But it is a minimal
- Registered Owner Rule and Kabit System amount. Like in a subdivision for example, if you want your kid
CASES to be fetched by a person who is into such what we call
- No details on HOME INSURANCE and PLANTERS (mag.tigi ni
carpooling, like in going to school and they charge an amount,
sila)
- De Guzman vs. CA probably a month or per trip places then that person is to be
- Bascos vs. CA considered common carrier.
- Fabre vs. CA
- First Phil Industrial vs. CA
The trend now is basically, for the court to consider a carrier to
- Loadstar Shipping vs. CA
- Calvo vs. UCPB be common because there are only a few cases where the court
- Asia Lighterage vs. Shipping held that the carrier is private.
- AF Brokerage vs. CA
- Schmitz Transport vs. Transport Venture 1. American Home case (Home Insurance Co. vs. American
- Phil Charter vs. MV National Honor
- Lea Mer Industries Steamship Agencies Inc.): Can you still invoke American
- Loadstar Shipping vs. Pioneer Asia Home case? The problem with American Home is the
- Cebu Salvage vs. Phil Home Assurance failure of American Home to raise the issue of whether
- Unsworth vs. CA
- National Steel vs. CA
the carrier is private or common. Because it is very clear
- Valenzuela vs. CA in the petition before the Supreme Court there was only
- Crisostomo vs. CA one legal issue in the case of American Home, the validity
- Lim vs. CA
of the stipulation in the bill of lading. That means there
- FEB Leasing vs. Sps. Baylon
- Filcar vs. Espinas was never an issue in the case of American Home whether
the carrier is common or private. If that have been an
issue raised in the case of American Home then the
Supreme Court in the of Planter’s Products would not have
pronounced the inapplicability or the misapplication of the
case of American Homes. So that is why in the case of
Planter’s Products the Supreme Court said that the
invocation of whether the common carrier is common or
private is inapplicable, meaning the invocation of
American Home is misplaced because the issue in the
American Home is the validity of the stipulation. Number
two, the court also justified in the case of Planter’s
Products that because of the need to protect the safety of
passengers, the Supreme court did not apply the American
Homes Insurance case

2. National Steel vs. CA. What were the issues raised in the
National Steel? The issues raised in the National Steel were

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 TRANSPORTATION LAW 2013-2014
about seaworthiness, demorage and etc. there was never
an issue whether the carrier is private or common. So in
the same manner you cannot raise cannot invoke National
Steel in support of your issue before a court to determine
the character of the carrier.
3. Valenzuela Hardwood and Industrial Supply Inc. vs. CA.
There was an admission of the party filling the case
against the carrier that the carrier is private.
4. FGU Insurance Corp. vs. G.P. Sermiento Trucking Corp.
The key there is the exclusivity of the contract. So you can
invoke FGU if the circumstances are the same as in the
problem.
FACTS: G.P. Sarmiento Trucking Corporation (GPS)
undertook to deliver on 18 June 1994 thirty (30) units of
Condura S.D. refrigerators aboard one of its Isuzu truck,
driven by Lambert Eroles, from the plant site of
Concepcion Industries, Inc. While the truck was traversing
the north diversion road along the highway, it collided
with an unidentified truck, causing it to fall into a deep
canal, resulting in damage to the cargoes.
FGU Insurance Corporation (FGU), an insurer of the
shipment, paid to Concepcion Industries, Inc., the value of
the covered cargoes in the sum of P204,450.00. FGU, in
turn, being the subrogee of the rights and interests of
Concepcion Industries, Inc., sought reimbursement of the
amount it had paid to the latter from GPS. Since the
trucking company failed to heed the claim, FGU filed a
complaint for damages and breach of contract of carriage
against GPS and its driver Lambert Erolesn. In its answer,
respondents asserted that GPS was the exclusive hauler
only of Concepcion Industries, Inc., since 1988, and it was
not so engaged in business as a common carrier.
So what do we have: we have several cases:
1. De Guzman, about the absence of a distinction;
2. Cases involving operators of school buses;
3. Fabre, Jr. v. CA 259 SCRA 426. where the Supreme Court
held that Fabre was a common carrier even with the
absence of CBC. But it was already clarified in the case of
Perena, owners and operators of school buses are
common carriers.. You cannot anymore invoke that you
have only a limited clientele, no CPC and etc. because all of
these are settled.
4. Beach resorts, you have that case of Sps. Cruz vs. Sun
Holidays Inc. The key there is the undertaking to
transport. Just like in the case of Customs Brokers. You
take away that undertaking to transport and what will
*405* TLD-HYC
remain will only be the role of the customs broker
originally then, the carrier is not common
Is it safe to say that if the carrier is common it is private?
Not necessarily, because a person may not be a carrier in
the first place. Just like a travel agent, you never heard the
Supreme Court saying that hey Crisostomo, you are not
common therefore, you are private. The Supreme Court
did not say that because there was never any
transportation. It is only when there is transportation that
you make a distinction whether it is common or whether it
is private.
CHARTER PARTY
My advice is for you to cite the case of Planters Products
case.
VOLUNTEER – Obligations of the Parties
What are the obligations of the common carriers?
N: The common carrier is bound to accept any particular goods
or any passengers without discrimination for carriage. It is also
bound once it has accepted to fulfil its duties in the contract
which is to deliver the person or good in a particular place.
What do you mean by “bound to accept without discrimination”?
N: In what is discussed in the book: a common carrier is
supposed to offer its services to the public. There is a
comparison to public office where being for the public interest
you are not allowed to discriminate based on the carrier’s
personal or _(26:36)purposes as to which kind of passengers to
accept so for example jeepney drivers cannot deny you
transportation because you are Korean or will charge you
double fare because you’re a foreigner. So, because it is for the
public convenience to treat everyone equal.
Can pregnant women be accepted in transport in airlines?
What about if you are bringing a plant or plants? Can you bring
those plants to the vessel?
N:… the plants are subject to the regulatory powers of the
Government. For example especially like plants, you have to
secure clearance from a department of the government.
Technically while all goods must be accepted there are some
good which the government has declared that needs clearance
before it can be transported like firearms.
What about explosives?
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 TRANSPORTATION LAW 2013-2014
N: Explosives: it depends if the common carrier is required to
(28:00) to transport explosive. So I think right now the rule is
you have to have a permit as a common carrier (28:10)
What is the second obligation that is mentioned?
N: The duty to transport.
To transport? Where?
N: If it’s in the case of passengers, to transport to the place
designated as destination and for goods to the consignee.
What about the time to transport? What are the rules?
N: It must within the reasonable period of time or … if not
stipulated within reasonable period of time
What do you mean with “if not stipulated”?
N: Like for example like the airplanes leave: 7:30, arrive: 8:30,
manila. So if it’s 8:30 you will then consider you should arrive
there at least 8:30 or at least before 9. If it is not stipulated
then generally you can consider how similar voyage will take.
In case of airplane for example, if the airplane does not fly on the
time stipulated then the carrier can be sued?
N: In the case of airplanes, I think it would depend on cause. If
the cause is not due to the fault of the carrier like storm then
the carrier is exempt from liability. However if it is due to
mechanical defects or (30:06)then the carrier should provide
like meals, overnight, allowance and … there are certain rights
that are (30:25). Like for example like for passenger if you
missed something because of the delayed arrival of the aircraft
you can sue.
So as to the time of transportation you said it depends of whether
it is stipulated and if it is not stipulated. And in the example when
there is a stipulation you mentioned about the airplane. Did I did it
right?
N: Yes sir. It is generally whether it is stipulated or it is not
stipulated. If it is not stipulated then you apply reasonable
amount of time.
Let’s say an airplane there is a ticket right? Can you conceive of a
stipulation that says “so and so” as to the time of transportation,
how is it worded in the ticket?
N: Generally what is stipulated is departure time and estimated
time of arrival. So I think the airline knows this that it is not a
contract per se where they stipulate the time of arrival, it’s just
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an expected time of arrival so they are not technically bound if
they are delayed in 10 to 15 minutes.
So if they are not bound, where does that fall? It is under the first,
where there is stipulation or second, where there is absence of
stipulation?
N: Second category, reasonable time, because there is really no
time or guaranteed by the airline on what time you will arrive
on your destination. There is only an indication of the specified
time of departure and an estimated time of arrival. So, they
would specify that you have to be here before the boarding
time (32.38) estimated time of arrival.
What would be your example of the first?
N: First would be example like, the boat usually have their
schedule made and post it on their bulletin board(33:01) For
example the boat will arrive on May 9, 2014…
So you have a specific date on your arrival?
N: Yes you have a specific date of the arrival.
If the boat doesn’t arrive on May 9, 2014?
N: You should sue for whatever damages caused you by the
delay.
What if the delay is cause by a Fortuitous event as you have said?
 N: (33:30) is temporarily suspended to the effect that as soon as
the mission become possible for the carrier to make the delivery
then to do in a reasonable period of time.
Assuming there was a storm and the vessel arrived May 10, 2014?
Is the storm an excuse? N: Yes sir.
Going to the second, reasonable time. How did the Supreme Court
interpret this reasonable time?
N: So if there is no categorical time specified so it should
depend on: the type of transportation, the (34:40)
What about fortuitous event is it an excuse that the vessel did not
arrive at the reasonable time?
N: It will be excused that the vessel did not arrive because of
the fortuitous event.
There is no distinction between the two? When it is stipulated or
when it is not stipulated. Meaning the fortuitous event can be an
excuse.
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N: Technically there should be a difference because even if you
could say that in the first case it is a strict contract (35:45)
If you’re the owner would you commit yourself that the good
would arrive on May 9, 2014?
N: Of course not. I would say that it is subject to the weather
conditions.
Ikaw, mu.recite ka?
Lenie: Ako? Are you calling me?
What is it that you want to discuss? Chapter two.
L: I think I’ll be more comfortable reciting Extraordinary
Diligence.
Go, go.. What about extraordinary diligence?
L: Well it is stated here in the book that (36:55) by the nature of
the business is bound to exercise extraordinary diligence in the
transportation of goods and in the transportation of
passengers.
Is it one of the defences of a common carrier? Whether
extraordinary diligence is a defense of a common carrier?
L: No sir because by the contract of carriage. Because from the
cases, the Supreme Court held that it has to be distinguished,
the contract of courage has to be distinguished from culpa
acquiliana or a mere tort. In a contract of carriage you cannot
interpose the defense of exercising extraordinary diligence
because you are prescribed by law, specifically by the civil code
to precisely by the nature of the business to exercise such
extraordinary diligence.
When should a common carrier exercise?
L: You ask sir when the duty to exercise extraordinary diligence
commences. If it is for the transportation of good the duty to
exercise extraordinary diligence commences from the time that
the good are put in the unconditional control and possession of
the common carrier. If it is with the transport of passengers, it
is different. The Supreme Court has emphasize that just by the
mere purchase of ticket does not necessarily bound the carrier
to exercise the…
So aside from the purchase what is the _(39:15)?
L: You have to present yourself to the place of/to the premises
of the carrier as a passenger with a bona fide intention to use
the facilities provided.
*405* TLD-HYC
And when does it end?
L: It ends. You have to pay into account the various factual
circumstances but generally by the fact you alighted from the
vessel or from the carrier it doesn’t mean that the duty ends
right there. I think there has to be a reasonable time from when
you left the premises of the common carrier.
What is reasonable time?
L: It depends again upon the circumstances of the case.
Can you give me an example of reasonable time?
L: The case I found in the book where there is a family bound to
a certain place in Pampanga. There is the parents and the three
children. When they alighted the bus, of course they are a
family travelling, there is bound to be a lot of baggage. The
father, when they alighted the bus, just (40:33) the family 5
meters away from the bus. And then the father went back to
the bus not knowing that his three year old child was following
him. And so when the father is getting the baggage in the
platform, the bus moved forward not knowing that that the 3-
year old child was there, causing the death of that 3-year old
child. The Supreme Court say in that case that even if the family
has already alighted the bus, the carrier is still liable because
the family is still within the premises. By the fact that they
alighted does not mean that you are exculpated from the
obligation to exercise due diligence in the transportation of
your passengers does not terminate from the fact that
passengers have alighted.
But isn’t it not that they were not anymore in the premises? Except
for the father, the mother and the children were already at a
distance from the bus?
L: In that case the Supreme Court give relevance to the fact that
there was still luggage left in the bus. And so by that fact,
technically, the family is still passengers of the bus. There is still
an intention to go back.
What about goods, when does it ends?
L: Goods, upon delivery to the consignee sir.
Consignee alone?
L: Consignee and to the person who has the right to receive it.
Who is the person who has the right to receive it?
L: The notified party like in a case, a very complicated case.
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What is that case? What did the Supreme Court say?
What made the Supreme Court say that there was delivery?
L: Again they give relevance to the fact that there was this
telefax that was given. Although it was conceded that in the
contract it was only stated that GPC was only be notified partly
and not be as expressly stated as the consignee of the goods.
The carrier gave due course to the telefax that was given by the
shipper.
Aside from that.. L: And there was the perishable nature of the
goods
Aside from that. In the previous transactions, to whom was the
goods delivered?
L: It was also delivered to GPC. GPC, the notified party.
What about delivery of fuel? When does it end?
L: It depends. Generally if we apply the general rule to the
consignee, to the gas station… (44:45)
If part of the fuel was already in the tank but the rest spilled on the
sea cause it backflow, was there delivery?
L: No sir. There was not delivery
Why? L: Because what is generally agreed upon by the parties is that
all of the fuel must be delivered to the consignee.
Discussed about Art. 1734
C: Article 1734 talks about common carriers are responsible for
loss and destruction of goods on shipment unless the same will
be due to either of the exclusive enumerations found in 1734.
If a vessel was sank because of the big waves of the sea and on
that vessel were cargos, ca the owner invoke Art. 1734?
C: It depends. There are requisites in order to availed of the
exclusion of the right.
What would be your ground? What ground do you invoke? If you
are the lawyer of the common carrier.
C: I will invoke sir that it was due to fortuitous event.
Why? Why was there a fortuitous event?
C: I would argue that there was storm sir and it was
unpredictable. And even if it was predictable, under the
requisite of fortuitous event, it was under number 2. Even if it is
*405* TLD-HYC
predictable it is outside of man to control then it is considered
as fortuitous event sir.
What about if you consulted PAGASA and there was no storm from
that time, it was only a monsoon which we normally experience
nowadays.
C: I would say sir that the carrier is free from negligence from
his part, that its ship was cleared for shipping, it was only a
monsoon and it did all the precautionary measures. The carrier
exercise such diligence to prevent such loss of cargo
DISCUSSION: 11/29/13
In the 2004 book, the same authors, you can find on page 68 to 69
the required clearances which are not incorporated in the 2011. I
am not sure what are the reasons by the authors here but actually
by the time it was published in the 2004 several years after under
3.6 the 2004 book it says about motor vehicles and parts because
before you need to get clearance from the traffic management
group before you can be allowed to transport your vehicle from one
port to another but that clearance was removed by the PNP because
of the allegations of corruption. But the other clearances are still
required.
3 Cbligations of a Common Carrier:
1. Obligation to accept
2. Obligation to deliver
3. Obligation to exercise Extraordinary Diligence
While probably after you have studied the first part of chapter two
you may have that knowledge already that a jeepney driver, a taxi
driver, a bus driver is obligated to accept you for transportation
hinay-hinay lang when you assert that right because I am not sure if
you can use your knowledge in defending against illegal assault or
whatever crime that may be committed against you. Although if
there is a crime committed then you still have a right under
transportation law.
The duty or the obligation to accept
is the very reason why if there is a driver who will ask where
you are getting, where you are going to or where is your
destination that is a violation. And there is even a violation for
refusal to convey. The moment that you will be ask where you
are going to and you will answer and the driver will not accept
you for carriage or transportation that is a violation because as
stated, the carrier has that first obligation to accept.
But you will have to note, there can be discrimination but it
has to be reasonable discrimination. That is why the
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 TRANSPORTATION LAW 2013-2014
requirement of clearances that is in relation or a manifestation
of a reasonable discrimination
. I am not sure if there is a standard with respect to pregnant
women because as far as I know it depends on the carrier
involved and it depends on whether there is a medical
certificate issued by a medical practitioner.
IMPROPER TANK OR DEFECTIVE CONTAINERS
Improper tank or defective containers delivered to the carrier
and the question would be whether the carrier is mandated to
accept?
The carrier may refuse to accept.
Now assuming, that the carrier will accept or will choose to
accept? The carrier may limit liability.
Limitation of liability in Obligation to Accept
Article 1747. If the common carrier, without just cause,
delays the transportation of the goods or changes the
stipulated or usual route, the contract limiting the
common carrier's liability cannot be availed of in case of
the loss, destruction, or deterioration of the goods.
Article 1749. A stipulation that the common carrier's
liability is limited to the value of the goods appearing in
the bill of lading, unless the shipper or owner declares a
greater value, is binding.
Take Note: Do not conclude that well there is a limitation of liability
then the carrier is free of all liability or is free to do anything that it
may want in relation to that improperly packed goods or goods
packed in defective containersbecause you have Article 1742 of the
New Civil code that when it comes to defective containers or when
there is defect in the character of the goods the carrier is still
expected to exercise due diligence
Art. 1742. Even if the loss, destruction, or deterioration of the
goods should be caused by the character of the goods, or the
faulty nature of the packing or the containers, the common
carrier must exercise due diligence to forestall or lessen the
loss.
Diligence to what? To forestall or lessen the loss. So you have to
reconcile all these concepts: from acceptance, from the character of
the goods, limitation of liability and then with respect to the duty to
exercise due diligence to lessen the loss.
The duty or the obligation to deliver
Now as to time, we have to distinguish if:
*405* TLD-HYC
 There is stipulation
 .There is no stipulation, then must be within reasonable
time (should be based on the circumstances of the case)
The case of Maerksline vs CA citing Saludo, the court said, “The oft-
repeated rule regarding a carrier's liability for delay is that in the
absence of a special contract, a carrier is not an insurer against
delay in transportation of goods…” “But where a carrier has made
an express contract to transport within a specified time, it is bound
to fulfil its contract and is liable for any delay; no matter from what
cause it may have arisen.”
Be careful in looking at the time, place in the contract of carriage.
Because even if you don’t see the word estimated and you would
see the words around and about, those are indications that the time
is not specific. Now another thing is this, in practice involving
transpo, you have the ticket as your best evidence, stipulations
there.
What about if there are publications, announcements at the
premises of the common carrier which are not found in the ticket,
are you bound whatever announcements published in the premises?
No, unless there is a phrase there in the ticket that whatever
may be published by the common carrier around or within or in
the premises then the passenger or the shipper is bound by the
terms of that.
Why should we be concerned of the time of delivery?
Because if the common carrier cannot deliver based on the
time specified, there can be delay but do not think that all
delays will lead to liability. There can be delays which will not
lead to liability like if the cause of delay is beyond the control
of the common carrier. If there is delay:
1. Article 1740 (NCC). If common carrier negligently delays
in transporting the goods, a natural disaster shall not free
it from responsibility.
2. Article 1747 (NCC). If common carrier delays, without
just cause, in transporting the goods or changes the
stipulated or usual route, the contract limiting its liability
cannot be availed of in case of the loss, destruction, or
deterioration of the goods.
What are the effects of delay involving contract of transportation?
1. Natural disaster cannot free a common carrier under
Article 1740 and;
2. Article 1747, that the carrier cannot avail of limitation of
liability.
For Consignee: If there is delay can abandon. Meaning the
consignee may not accept the good that will be delivered.
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What about the place of delivery? It depends upon the agreement
and of course normally it is indicated in the bill of lading.
To whom delivery must be made?
1. To the Consignee
2. To the person who is authorized to accept the goods.
Note: that the case of Macam vs CA is very exceptional. It does not
happen at all times, there are peculiar circumstances. Like the
export invoices clearly show or named GPC as the buyer-importer
and also in the demand letter GPC was named s buyer-importer. And
the court said that delivery to the buyer-importer has the effect of
delivery. .
What should be done if the consignee refuses to receive? You have
Article 369 of the Code of Commerce. You need to file a case before
the Municipal judge to provide the deposit of goods. And what is the
problem now is we don’t have rules under maritime law
promulgated by the Supreme Court.
Obligation to exercise Extraordinary Diligence
 Goods.
 Compania Maritima vs. Insurance Co. of North
America.
When goods are unconditionally placed in possession
and received by the carrier then the duty to exercise
starts. Now please be cautious also of the case of
Compania Meritima. Why? Because based on the
facts, the goods were not yet placed in the vessel
that would take the goods to the place of destination.
They were unloaded in the barge before they be
loaded into the vessel. But before loading the good
into the vessel, the barge sank. So note ang mga
gipanggamit sa cases na gitawag ug ligther. So it’s
actually referring to a small craft. And then also uses
the word “patron”, captain of small craft.
What constrained the SC to conclude that the acceptance of
the goods by the barge that there was already complete
delivery and therefore the duty to exercise also started? There
is the same owner of the lighter and the ship, and the receipt.
There was that receipt signed by the patron of the lighter. The
receipt signed says “receiving the cargo in behalf of (30:31)”.
 The exercise of the diligence you have Article 1737, the law
says the duty remains even if there is temporary unloading or
storage in transit unless the owner or the shipper made use of
his right of stoppage in transit.
ARTICLE 1737. The common carrier’s duty to observe extraordinary
diligence over the goods remains in full force and effect even when
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they are temporarily unloaded or stored in transit, unless the
shipper or owner has made use of the right of stoppage in transit.
 Another Article 1738,
ARTICLE 1738. The extraordinary liability of the common carrier
continues to be operative even during the time the goods are stored
in a warehouse of the carrier at the place if 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
Note: the case of Servando vs. Phil. Steam Navigation Co.
While the goods were placed in the customs warehouse, it was
not placed in the carrier’s warehouse, but of course the
Supreme Court has to apply 1738. The issue there was delivery
to the consignee and therefore if there is delivery then the
common carrier has no more duty to exercise the required
diligence.
What were the important facts in Servando? Servando has
already withdrawn part of the goods that were placed. So the
court conclude, if the consignee has already withdrawn part of
the goods then it has already been advised of the arrival and
had reasonable opportunity, in fact, it has already even
exercise its right to remove those goods. So 1738 has been
complied.
 When does this duty to exercise ends?
Delsan Transport Lines Inc. vs. American Home Assurance
Corp.
a very peculiar case (I believe). Because it was diesel oil
discharged from the vessel which backed flowed and
spilled into the ocean. So the contention of petitioner, the
diesel was already completely delivered to CALEBS. SC
said, “the discharging of oil products has not yet been
finished, Delsan still has the duty to guard and to preserve
the cargo”.
The good were in the customs warehouse although the
law says the storage of the goods in the warehouse of the
common carrier or the place of destination, the carrier still
has the responsibility. So it would depend on whether the
consignee has been properly advised and etc. It does not
matter who owns the warehouse? Yes, it will not matter.
Although the carrier also can contend it is already beyond
our responsibility and 1738 says common carrier’s
warehouse not customs’ warehouse. So we’re already off
that. So what you’re saying sir, if the carrier informed the
consignee that it’s with customs already sir, it removes
their liability, does it? No, because there is “and
reasonable opportunity to remove them”.
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 Passengers ORALS:
 LRTA vs. Navidad
The start of duty is when a person 1. purchases a Give one defense of a common carrier.
ticket, and 2. present himself in the proper place and
C: Fortuitous event sir, natural calamity sir
in a proper manner.
 Dangwa Transportation vs. Del Prado
Are they the same? Why are they the same?

In the case of Dangwa Transportation. Kudiamat, he C: Unforeseeable, even foreseen, inevitable

was already standing on the platform, unya
pag.accelerate, pag.move sa vehicle nahulog siya. The Can you foresee an earthquake?
court said there was perfected contract of carriage
and the moment the bus stops, it is making a C:I cannot sir.
continuing offer.
So is an earthquake a fortuitous event? C: Yes sir.

In Del Prado vs. Manila Electric the court said, there Is it a natural calamity? C: It is.
was already a perfected contract of carriage. In the
case, Del Prado was trying to catch up a slowly So there is not difference?
moving vehicle. He was trying to catch up the hand
post, which he failed. And the court said, there was C: There is sir. Natural calamity, act of God vs Fortuitous event,
negligence on the part of that person but this may or may not be an act of God.
negligence does not absolve the carrier from liability.
The court said, negligence may be mitigated the What made you say that Natural calamity is an act of God?
damages.
C: Because it is beyond human control sir. In a case, Supreme
court has held hijacking as a fortuitous event.
The issue in Dangwa is the findings of facts that
supports the ruling, wala mani sa issue of negligence When is hijacking a fortuitous event? De guzman vs ca case
in Dangwa. In Del Prado, one of the issues is
negligence of that passenger. Take note of this, it’s a What do mean by the hijacking was so grave?
matter of evidence.
What made you say that there were hijackers?
This is in the case of Dangwa, “this is now the pronouncement
of the court of appeals which the Supreme Court has held was Definition in the case on who are hijackers.
correct… from the testimony of appeallee’s own witness in the
person of Italiano Safarita it is evident that the subject bus was C: There reason why the Supreme Court considered those
hijackers as fortuitous event is because it was beyond the
at full stop when the victim Pedro Kudyamat boarded it…
contrary to the assertion of the appeallees, the victim did control of the common carrier, it was unforeseeable.
indicate his intention to board the bus.” Is it material? Yes.
What made it beyond the control? C: Something unforeseeable.
“Indicate his intention to board the bus as can be seen from the
testimony of the said witness where he declared that Pedrito Why was it unforeseeable?
Kudyamat was no longer walking”. So there was an indication
of Kudyamat to board the bus. That is factual. What about in C: The carrier do not control to know that by that time there
Del Prado? There was also an indication. In Del Prado, “raised will be hijackers. As long as the carrier exercise the necessary
his hand as an indication to the motorman of his desire in diligence the Supreme Court held that the hijacker is considered
response to which the motorman eases up a little without as Fortuitous event as contemplated in 1734.
stopping”. My point is, in these two cases, there was meeting of
minds. So, it’s just my own opinion. It may be hard to say when What made the Supreme Court say that there were hijackers?
bus stops it makes a continuing offer. That is very risky. What if
Since you cite de guzman case and you said it is a fortuitous event,
there is no meeting of minds? But probably the Supreme Court
why was it a fortuitous event?
made that pronouncement on the basis of that factual ruling by
the court of appeals.

December 12, 2014

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C: According to the Supreme Court that it was fortuitous event
because it was beyond the control of the common carrier. The
book
Why was it beyond the control?
C: Because the act of the hijackers was so grave that the
common carrier cannot anymore .. the duty of the common
carrier…
Did the Supreme Court use the term hijackers?
C: Term used: robbers
And what were the robbers are bring during the time of the
incident?
C: They were armed.
Is it material that they were armed at that time?
C: Yes. It lessen the chances.
So you are saying that the defense of fortuitous events in so far as
armed men is concern is dependent on the exercise of diligence of
a common carrier?
C: Not necessarily sir. Even if the carrier has made
precautionary measure still being the act of hijackers so grace it
is inevitable.
How is that due diligence manifested?
C: In the case, they hired security personnel.
If they hire security personnel, why will they hire security
personnel? Was there information that the truck of the company
will be robbed by armed men?
C: There was none.
None, so, what intend them to hire security personnel? Or is it just
part of their standard operating procedure that all trucks shall be
secured?
Do you know what was one of the issues raised in the De guzman?
C: There were two issues in the case of De guzman. The one was
whether the operator of the truck is a common carrier.
Remember as we have discussed in chapter 1, the court said,
1932 does not make any distinction as to the main business or
the business is side-line. And the other issue is whether or not
hijacking is considered force majure.
*405* TLD-HYC
If fortuitous event as you say is a defense, what is your legal basis?
Is it Aricle 1734?
C: That is 1734 paragraph 1, mentions about the word
fortuitous event.
Are you sure that the words caso fortuito are mentioned there?
C: It did not.
If you said that fortuitous event falls under 1734 parragraph 1,
then why did you said earlier that fortuitous even tis different from
natural disaster?
What is the catch all word there in paragraph 1 under 1734?
C: Natural disaster or calamity
Is a fortuitous event a natural disaster? C: Yes sir
It is? Are all fortuitous event a natural disaster? C: Not all
So why did you based it under 1734? When not all fortuitous
events is are natural disaster?
C: In paragraph 1 natural qualifies calamity and disaster.
So why did you based it under 1734, s your legal basis in saying
fortuitous events a defense?
What is the primary governing law in transpo law?
C: The civil code sir.
Fortuitous events, any other defense of a common carrier?
M: Acts of the public enemy in war, whether international or
civil.
And what about the act of the public enemy?
M: The act of the public enemy presupposes the existence of
state of war. Example: the Philippines is at war with another
country and that fact will be considered as defense.
You know what happen to Tacloban because of the storm? And
have you seen that vessel that was brought in the middle of the
city of Tacloban? You heard it. Assuming that there were sacks of
rice in that vessel and the residence there of Tacloban because
there was nothing to eat, they have to take all those sacks of rice
from the vessel and consume it. If the owner of the vessel is sued
by the owner or the consignee of the sacks of rice, can the owner
invoke the act of public enemy?
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M: No, the owner of the vessel cannot invoke the defense of act
of public enemy because it is stated therein that the act of
robbers, thieves or rioters, though against social order, are not
in the legal sense classed as legal enemies but are merely
considered as (26:55)contributors.
What makes them different with pirates?
M: Pirates are different because they are considered as a crime
against humanity, against civilized (27:10). So piracy is
generally considered as an act of public enemy.
Any other defense?
M: We have the act or omission of the shipper or the owner of
the goods. Example: A contracted with D to deliver kind of
goods to the consignee C. when the goods arrive at the port,
the consignee was informed of the arrival of the goods. For the
period of 2 months the consignee did not claimed the goods. If
the goods is lost or deteriorated then the carrier or the owner of
the vessel can invoke the defense 3rd defense under 1734.
Why would you blame the consignee?
M: For discarding the notice for unreasonable length of time,
the consignee did not get the goods. And by reason of such
facts, the owner of the vessel can invoke such defense.
Any other defense?
B: One is the character of the goods or defects in the packing or
in the containers
What about the character of the goods?
B: If the goods are vulnerable and the carrier was not inform, in
case something happens, the carrier is not liable.
Vulnerable to what?
B: Seawater for example the carrier must observe due diligence.
How did the common carrier prove that it observe due diligence?
B: For example: taking of precautionary measures.
What precautionary measures?
B: For example: sacks of fertilizer were covered by tarpaulin. At
what point covered? To the point that it is impossible for the
seawater to sink in. I am asking about time? The time is the
moment it is under the custody of the common carrier until it is
delivered to the consignee.
*405* TLD-HYC
So, that is the point in time the common carrier has to observe?
What about if the goods would require a refrigerator for the good
are required to be in a certain temperature in order not to get
damage?
B: The common carrier should provide as a necessary
precaution to keep the goods in good shape.
What necessary precautions? There is a certain point of
temperature that is required on such goods so the common carrier
should know that.
B: What about if the common carrier would present a witness
that the freezer got damage at the point when the good are not
already in the hands of the common carrier but was delivered in
the hands of the common carrier, would that be sufficient
evidence that the common carrier observed diligence? Not
sufficient. Point where the goods get damaged.
What if the shipper/consignee will not accept because the goods
were already damaged? B: Reimbursement
Do you know what is this “shore pass”? What is the responsibility
of a common carrier in an issue of shore pass?
B: Not covered by the contract.
If it is not the responsibility of the common carrier then whose
responsibility is that? B: The passenger
What about this fire? Is the occurrence of a fire is a defense on the
part of the common carrier? B: In case the cause for the damage of
the goods is the fire itself.
Baggage:
Article 1734: complete defenses of a commom carrier:
Are those only the defenses of a common carrier? B: No, the
defenses available are not limited on the enumerations under 1734.
What are the other defenses?
B: Fire- as long as it is the only or proximate cause of the event
then it will be considered a defense.
Why? Does fire fall under 1734? B: No, there are other causes
What are those causes? B: Fortuitous event sir.
So if you have defenses unde 1734 and you have fortuitous events,
are those all the defenses that the common carrier can invoke? No
Why not? What other defenses are available?
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 TRANSPORTATION LAW 2013-2014
J: The exercise of extraordinary diligence.
Article 1734, fortuitous, 17something and extraordinary diligence.
Is that all?
What about carrier of passengers?
J: Exercise of due diligence/ utmost diligence applies only.
Can you not invoke fortuitous event? J: Yes you can also invoke.
Can you not invoke 1734? J: No sir, you cannot, it is only applicable
to the carriage of the goods.
What about the 17something that you said?
J: (44:50)1745: based on the act of strangers like thieves and
robbers. The presence of grave or irresistible threat violence or
force would be considered as casio fortuito but not based on
article 1734.
Example of a breach of transportation of passengers and there is a
valid that can be invoke.
J: There is death or injury yet there is a valid defense that can
be invoked. (Transportation of passengers)
LLD- loss, damage or deterioration – transportation of goods only
There are incidents to today that taxi drivers are using prohibited
drugs, shabu.
J: There will be an exercise of utmost diligence with regards to
its employees. Facts: Manila to Cebu ship defense: sufficient
selection and supervision. Injury: typhoon, struck the said
vessel. Passengers died because the boat sank. S.O: significant
others.
Example of Tui case: if you were the lawyer, what is your defense?
Doctrine of last clear chance not applicable in contract of carriage.
Why?
Can the common carrier invoke the negligence of the owner of the
truck? Not. Why not? J: Contract of carriage – presumption of
negligence.
That presumption, was that not overcome by the invocation that it
was the negligence of the truck that was the proximate cause? No.
Why? Unavoidable.
The carrier is required to exercise extraordinary diligence in so far
as the negligence of the owner of the truck?
DISCUSSION:
*405* TLD-HYC
DEFENSES
Remember the sample problem I presented before;
One: Alleged all defense you can think of or as you will have, do not
be contended by only one defense. And note: Omnibus Motion rule
in remedial law. Third party-judge, has his or her own way of
appreciating the evidences, you cannot impose your on will on him
or her.
Two: Observe form the cases decided by the court, make an issue;
 Contributory negligence: Isaac vs A.L. Ammen
Contributory negligence on the part of the passenger who display his
arm outside of the window of the conveyance so isn’t that a
manifestation that should mitigate. But if you have observed in the
case, there was no issue regarding Contributory Negligence.
Take note in so far as defenses are concren: you should make an
issue on a particular allegation or fact which you want the court to
resolve. Do not assume that the court will probably resolve this one
because this one because this has been raised by the other party.
Anything that you didn’t raise as an issue the court cannot be
compelled to resolve that.
Defenses:
A. Defenses of common carrier is under Article 1734
B. Exercise of Extraordinary Diligence
C. Fortuitous Event
ARTICLE 1734 (No other defense may be raised: exclusive or closed
list)
1. Flood, storm, earthquake, lightning, or other natural disaster or
calamity
2. Act of the public enemy in war, whether international or civil
3. Act or omission of the shipper or owner of the goods
4. The character of the goods or defects in the packing or in the
containers
5. Order or act of competent public authority
Exercise of extraordinary diligence
Article Paragraph 1 of Article 1734 :Natural Calamity or Disaster,
very specific. Natural disaster may be included under Fortuitous
Event but not all Fortuitous Events are Natural disasters.
Note: Although there is one defense that was not mentioned by the
authors and I am talking about the Limited Liability Rule under
Maritime Law. But I think I have showed this in the answer that was
filed in court. Assuming it was so stated there: assuming the
common carrier was liable, the liability is extinguished pursuant to
the principle of the (8:19) nature in the Maritime Law. So that
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 TRANSPORTATION LAW 2013-2014
defense is also available to a common carrier but your basis there is
the Maritime Law, not the first part under the new civil code.
NATURAL DISASTER
 Proximate and Only Cause
Supreme Court said, “Even if fire were to be considered a
natural disaster within the purview of Article 1734, it is
required under Article 173910 of the same Code that the
natural disaster must have been the proximate and only
cause of the loss, and that the carrier has exercised due
diligence to prevent or minimize the loss before, during or
after the occurrence of the disaster” (DSR-Senator Lines
case)
 Exercise of Due Diligence
in time of natural disaster the common carrier is not expected
to exercise extraordinary diligence but only due
diligence( before, during or after the occurrence
Lea Mer Industries Inc. vs. Malayan Insurance Co. Inc.
What was the defense there of the common carrier?
Natural Disaster. There was evidence that Lea Mer was
informed of the incoming typhoon and the coastguard
cleared the sail. Now, if it is a Natural disaster, you take up
the second requisite and that requisite is the requisite of
due diligence. And this case the Supreme Court said that
there was no evidence presented on whether there was
due diligence exercise by the common carrier. And it was
the witness, (factual evidence) a certain Joey Draper,
testified he could no longer remember whether anything
had been done to minimize loss when the water started
entering the barge. So note, if the is no evidence, the
presumption cannot be overcome. Because presumption
can be overcome by the exercise of extraordinary
diligence or it can be overcome also by proof that it was
the natural disaster that caused the loss. So if there is no
evidence then one requisite will be lacking. If one requisite
is lacking then it is not a natural disaster. Now what about
the fact that there was a certification of inspection issued
by the coastguard? The certification does not conclusively
prove that the barge was seaworthy. Now note that even
if the court said that the certificate of inspection does not
conclusively prove that the vessel was seaworthy; that
does not mean that you should not raise it as your
defense. All defenses must be raised.
Defenses of Extraordinary Diligence which will constitute:
1. Seaworthiness of the vessel 2. Proper manning 3. Proper
storage of goods inside the vessel 4. Within the capacity of the
*405* TLD-HYC
number of passengers 5. Clearance from coastguard 6.
Fortuitous event.
Centrl Shipping Co. Inc. vs. Insurance Co. of North American,
This is about the shifting of the logs. What was the reason
why the logs were shifted? Because they were not tied
properly. Not here that petitioners main defense is that
the proximate and only cause was the natural disaster, a
tropical storm. According to PAG-ASA there was not storm.
So how can the carrier now invoke storm when there was
no storm in the first place? And who is that agency that
will establish that there was a storm? It was PAG-ASA.
Now if you will allege that there were big waves, there was
strong wind, that is not necessarily the case, because as
you will note here in the case, in maritime law, there is a
certain degree of storminess of the wind which can
constitute storm. So below that standard, that is not a
storm. Of you will say strong waves, probably those are
not storm. Strong wave may be the effect of a storm but
not necessarily coming from the storm. In this case the
Supreme Court says it may come from a Monsoon. Like
what we are experiencing now, there is a monsoon but it is
not a tropical dexpression. Now Supreme Court further
said, “if a monsoon is to be deemed a natural disaster then
the 3 requisites must be complied… The evidence
indicated that strong southwest Monsoons were common
occurrences during the month of July, officers and crew,
should have reasonably anticipated heavy rains, strong
rains and rough seas”. Given a problem where the cause of
the sinking is strong waves, strong winds and etc. then do
not immediately conclude that it is caused by typhoon or
monsoon. Of course you can qualify, you can qualify the
answer.
Fire as a cause of loss, a defense?
The answer is the case of DSR-Senator Lines and C.F.
Sharp and Co. Inc. vs. Federal Phoenix Assurance Co.
What was the defense of the carrier? The liability is
extinguished when the ship carrying the cargo was gotten
by the fire. In effect, fire is the proximate cause.
Public enemy as a cause?
Of course there is no debate now that: Somalian Pirates,
assuming that they would embark forcing on a vessel and
forcibly take all the goods etc., commanded the vessel
then the loss can be attributed to the act of the Public
Enemy. And I believe the same is true with acts of
terrorists. What should we remember when it comes to
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the Act of Public Enemy as a cause, proximate cause and
only cause.
Acts or omissions part of the shipper and the owner of the goods
and Improper Packing
Cause: proximate and only cause and due diligence. But
note, here the due diligence did not require that it must
be before, during and after just like in natural disaster. It is
due diligence to lessen the loss, that is what is required.
If the acts or omission of the shipper or the owner of
goods merely contributes, it was not the proximate cause,
the loss then you have to apply the law that says that it
shall only mitigate the damages to be awarded. Although
latter on we will have to emphasize that the Supreme
Court has not pronounced yet a standard by which
mitigation can be based. I would say depending on the
speculation (not sure daw si sir if he is using the right
term) on the part of the Supreme Court.
William Tui vs. Pedro Arriesgado?
Emphasize: Supreme Court has center on whether
there was an exercise of extraordinary diligence but I
need to stress that the resolution of the court will
depend on the issue. A resolution of the court can
depend on an issue raised. So like in this case, one of
the issues there is the exercise of extraordinary
diligence. Why did the court, did not venture on
fortuitous event or article 1734? Of course, article
1734 may not be applicable in all cases because it
centered on carriage of goods. But we don’t know in
the future that there might come a case where a
ground or defense under 1734 can be applied as well
with carriage of passengers. For example, act of
public enemy, this is based under 1734 but I believe it
can also be applied if there is injury or death in the
carriage of passengers as a result of acts of pirates.
But of course you cannot also invoke acts or
omissions on the part of shipper when the issue is
about carriage of passengers.
Doctrine of Last Clear chance: Why is it, this was not
applied? The concept: two parties are be negligent
but one party has the last chance to avoid the
accident, which is very much applicable in torts and
damages. You know what the reason is why the court
said that the Doctrine of Last Clear chance should not
be applied? It would be inequitable to exempt the
negligent driver and its owner on the ground that
the other driver was likewise of negligence. But for
*405* TLD-HYC
me it would be easy if the court just said based on the
law that the very reason why the common carrier
should be held liable is because of the contract. It
should be based on the contract so if it is based on
the contract then the contract has been violated by
the parties to the contract. Although you might also
say that can we not consider the act of the driver and
the owner of the other vehicle as acts of third
parties? Now, ifyou are going to ask me, nothing shall
prevent you from invoking that one. Remember the
other defenses? You have the absolute responsibility
of the common carrier under 1759 :
Article 1759. Common carriers are liable for the death
of or injuries to passengers through the negligence or
wilful acts of the former's employees, although such
employees may have acted beyond the scope of their
authority or in violation of the orders of the common
carriers.
and then you have 1763
Article 1763. A common carrier is responsible for
injuries suffered by a passenger on account of the
wilful acts or negligence of other passengers or of
strangers, if the common carrier's employees through
the exercise of the diligence of a good father of a
family could have prevented or stopped the act or
omission.
that qualifies acts of strangers and acts of co-
passengers or other passengers.
Do not ever invoke, Doctrine of Last Clear Chance in a
contract of carriage case. The contract of last clear
chance presupposes the parties are both negligent.
The Doctrine of Last Clear Chance does not apply in
the contract of carriage.
Fortuitous event (you know what? I think you should
memorize the requisites)
Loadstar Shipping vs. Pioneer. Good weather
however, the captain ordered the vessel to be force a
ground. The entershippement was good as gone due
to exposure to seawater. When sued, the defense
was force majure. Sa *four requisites usa ray
gi.consider sa court, free from any participation. And
what was the evidence considered? Records revealed,
petitioner took the shortcut instead of the usual
route which exposed the voyage into unexpected
hazards (30:18).
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 TRANSPORTATION LAW 2013-2014
Japan airline vs. Asuncion. The shore pass. It was
very clear, based on the witness, there was no
assurance that the passengers will be granted a shore
pass when they arrived at the foreign jurisdiction.
Such that if you can put, I’m not saying that you
should always allege. If you can prove that there was
an assurance coming from the carrier about not only
shore pass but accommodation and etc. then if there
is a violation then there is a violation of the contract.
Because note that violation of contract of carriage
does not only mean loss, damage or deterioration
with respect to goods; or injury or death with respect
to carriage of passengers because when we will reach
torts and damages, even violation of your reputation;
for example passengers gitawag ug monkey. Is there
injury or death? None but there was another injury
which fall under damages and this results for the
violation on the contract of carrier.
Notice of claim.
ARTICLE 366.    Within the twenty-four hours
following the receipt of the merchandise, the claim
against the carrier for damage or average be found
therein upon opening the packages, may be made,
provided that the indications of the damage or
average which gives rise to the claim cannot be
ascertained from the outside part of such packages,
in which case the claim shall be admitted only at the
time of receipt.
After the periods mentioned have elapsed, or the
transportation charges have been paid, no claim shall
be admitted against the carrier with regard to the
condition in which the goods transported were
delivered..
Article 366 of the Code of Commerce, this applies
particularly on carriage of goods. The notice of claim must
be filed within 24 hours following the receipt of the
merchandise and that is if the damage if found when you
open the package.
What is the effect if you will not apply with this notice of
claim requirement? You cannot file a case against a carrier
for loss, damage or deterioration because it involves your
rights of action. Although carriers usually will provide 30-
days sa filling sa notice of claim. So if the carrier for
example will provide 24 hours, that is okay because it is
provided by the law Article 366. And the very reason I
hope you understand why this notice is required, so that a
carrier can verify the claim it it is true.
Philippine Charter insurance case. this is a question of
evidence. You have an employee, an employee of PGP.
*405* TLD-HYC
Philippine Charter Insurance. So testimony of the
employee, we comply with the notice. How? Through
telephone. To whom did you call out the notice? It was the
vice-president of the other party. Which the vice-
president said, he did not call. The SC believed the vice
president because according to the court, if it involves
millions of pesos, it is very unlikely to communicate it by
phone.
DEFENSES OF CARRIAGE OF PASSENGERS.
Art. 1759. Common carriers are liable for the death of or injuries to
passengers through the negligence or willful acts of the carrier’s
employees, although such employees may have acted beyond the
scope of their authority or in violation of the orders of the common
carriers.
The liability does not cease even upon proof that they exercised
diligence in the selection and supervision of their employees.
I don’t know if you could think of other way out of Article 1759.
Because the law says even if you will argue, court I did not authorize
my employee to steal something form the passenger or etc. The law
is very emphatic. That is an absolute responsibility of the common
carrier. Only one situation I could think of, only one situation out:
that is by not admitting the driver was not your employee because
1759 says “employees”. The SC has been consistent that drivers of
taxi cab are considered as employees.
Acts of strangers or other passengers?
Art. 1763. Carrier is responsible for injuries suffered by a passenger
on account of the willful 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.
Under 1763 - to avoid liability then observe due diligence. Example
ins the case of Pilapil. What was the contention of the passenger?
Dapat ang mga buses naa gyud mga grills. The SC said that carrier is
not an insurer of all risk. And also in the case of Japan Airline.
CHAPTER THREE – EXTRAORDINARY DILIGENCE
ORALS: Caveat  dili ko ka klaro sa mga tubag
 WHAT IS EXTRAORDINARY DILIGENCE?
Canoy: Defense of a Common Carrier
 HOW CAN A COMMON CARRIER ESTABLISH THAT
DEFENSE?
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Canoy: In maritime law, there are certain rules and regulations
before and during voyage. He has to make sure that the master of
the vessel is licensed or is competent enough to man the vessel.
 WHAT ABOUT IF THE CARRIER CANNOT AFFORD TO PAY
THE SALARY OF A LICENSED MASTER?
Canoy: It is not an excuse. If the carrier engages the services of an
unlicensed master, if something happens to the goods or passengers,
that would be a legal presumption of negligence. Then there is no
way for the common carrier to establish extraordinary diligence.
 HOW IS EXTRAORDINARY DILIGENCE DIFFERENT FROM
OTHER KINDS OF DILIGENCE?
HYC: Extraordinary diligence requires a higher regard for safety for
passengers and goods and the only way that the presumption of
negligence can be rebutted (pak)
 HOW DO YOU DELINEATE THAT THIS ONE IS EXTRA AND
THE OTHER IS ORDINARY?
 GIVE AN EXAMPLE WHERE THERE IS AN OBSERVANCE OF
EXTRAORDINARY DILIGENCE AND AN EXAMPLE WHERE
THERE IS A FAILURE
HYC: There is extraordinary diligence in the selection of his crew ...
(grrr... fuschia!)
 HOW IS SEAWORTHINESS ESTABLISHED BEFORE THE
SAILING?
 WHAT IS THE SIGNIFICANCE IF THERE IS THAT NEGLIGENCE
IN RELATION TO EXTRAORDINARY DILIGENCE?
HYC: Extraordinary diligence is a good defense against the
presumption of negligence of a carrier
 DOES IT FOLLOW THAT IF THE CARRIER IS NEGLIGENT
THEN THE CARRIER FAILED TO OBSERVE EXTRAORDINARY
DILIGENCE?
 WHAT CAN CHANGE THE MIND OF THE COURT IN SAYING
THAT THERE WAS OBSERVANCE OF EXTRAORDINARY
DILIGENCE DESPITE THE NEGLIGENCE COMMITTED BY THE
CARRIER LIKE IN THE CASE OF OVERLOADING?
HYC: Like Stowaways. The carrier can say that despite the prior
counting of passengers before the voyage, it was found out later
that there were stowaways who stealthily entered the ship,
presumption of negligence may be rebutted.
 HOW IS THE PRESUMPTION REBUTTED?
*405* TLD-HYC
HYC: Because there are records that show extraordinary diligence
 HOW DID THE SHIP DISCOVER THAT THERE WERE
STOWAWAYS? CAN THE CARRIER NOT BE BLAMED WHY
THERE ARE STOWAWAYS AND THEREFORE THEY WERE
NOT VIGILANT?
Entera: The carrier will establish that they have no knowledge that
there were stowaways. Probably they jumped over from the port to
the vessel.
 EXAMPLE OF EXTRAORDINARY DILIGENCE
Entera: Kapalaran Bus Line Case: Bus was on the right lane and
observed proper traffic rules. There is a presumption of negligence if
you are not observing proper traffic rules.
 EXAMPLE OF NON-COMPLIANCE OF EXTRAORDINARY
DILIGENCE
HYC: If the crew of the ship is found to be not qualified, there is
absence of extraordinary diligence in the selection of the crew. What
is required is that there is proper manning and that the master and
the crew is knowledgeable and has experience especially on the
routes that they are plying. One situation is where a ship was
shipwrecked because even when the situation of the sea was
normal, the crew had no prior knowledge that there was a sunken
ship on their route.
 IF THE SHIP WAS FOUND TO BE TOP HEAVY AND BECAUSE
OF THAT, THE VESSEL SANK, WAS THE CARRIER
EXERCISING EXTRAORDINARY DILIGENCE?
Borbajo: No. The ship did not foresee that what they were carrying
was more than the carrying capacity of the ship.
 WHAT IS TOP HEAVY?
 WHAT IS THE RELEVANCE OF THE CONDITION OF THE
VEHICLE OR THE JEEPNEY IN RELATION TO
EXTRAORDINARY DILIGENCE?
Borbajo: They must ensure that there are no defects on the vehicle.
An example is if there is a tire blow-out during the voyage, which
would be considered as negligence on the part of the carrier.
 IN CHAPTER 2, IT WAS ESTABLISHED THAT WHEN IT
COMES TO TIRE BLOW-OUT, IT MUST BE ESTABLISHED
WHETHER ALL OTHER CIRCUMSTANCES RELATIVE TO THE
TIRE SHOULD BE PROVEN/ESTABLISHED.
 SHOULD WE INSPECT ALL THE HANDBAGS BEING
BROUGHT IN BY THE PASSENGERS OF THE BUS?
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Abejo: No, it is unconstitutional and a violation of human rights but
an exception would be the inspection of baggage for aircrafts.
 RIGHT NOW, THOSE WHO DO THE INSPECTION ARE PART
OF THE MCIAA, OPERATOR OF THE TERMINAL. NO AIRLINE
PERSONNEL WILL DO THE INSPECTION.
 IF THE AIRLINE PERSONNEL WILL DO AN INSPECTION ON
TOP OF THE INSPECTION MADE BY THE PERSONNEL OF
THE TERMINAL, WILL THE INSPECTION BE LEGAL?
Abejo: Yes, because the aircraft should exercise that extraordinary
diligence. The aircrafts have the right to inspect.
-o- DISCUSSION -o-
EXTRAORDINARY DILIGENCE
*Art. 1733. Common carriers, from the nature of their business and
for reasons of public policy, are bound to observe extraordinary
diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances
of each case.
Such extraordinary diligence in the vigilance over the goods is
further expressed in Articles 1734, 1735, and 1745, Nos. 5, 6, and 7,
while the extraordinary diligence for the safety of the passengers is
further set forth in Articles 1755 and 1756.
*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 a due regard for all
the circumstances.
IMPORTANT: “according to all circumstances of each case” and
“with due regard for all the circumstances”
Once it can be proven that there was exercise of extraordinary
diligence, it can actually exculpate (not merely mitigate).
SIR: Not expressly stated by the cases or the authors of the book but
what I noticed is that “if there is negligence, there is failure”
WHY IS EXTRAORDINARY DILIGENCE DEMANDED FROM COMMON
CARRIERS?
 Supreme Court recognized the apparent violations
committed by these drivers, recklessness, which impels
the Court to say that there is an extraordinary diligence
that is demanded.
*405* TLD-HYC
 Common carrier is mandated to exercise this extraordinary
diligence not only because of the passengers that they are
bound to carry but also in relation to protect the lives of
those pedestrians as well as passengers and drivers of
other vehicles.
CAN PARTIES STIPULATE THAT THE COMMON CARRIER WILL NOT
EXERCISE ANY DILIGENCE? NO
CAN PARTIES STIPULATE THAT A LESSER DEGREE OF DILIGENCE
WILL BE EXERCISED? QUALIFY
 Passengers: Absolutely NO
 Goods: It can be stipulated as long as the three (3)
requisites under Article 1744 are complied
Art. 1744. A stipulation between the common carrier and the
shipper or owner limiting the liability of the former for the loss,
destruction, or deterioration of the goods to a degree less than
extraordinary diligence shall be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the
service rendered by the common carrier; and
 “Valuable consideration” fee, charge, freight
that is being imposed by the carrier in relation to
the transportation
 Valuable consideration will DEPEND on what is
the industry practice insofar as air carriage and
water carriage is concerned. BUT with respect to
land, I am not aware of any regulation imposed
by the agencies involving land transportation.
 What I am aware of is the regulation on the fare
of passengers (land, except for habal-habal). In
air, there is no regulation (bagsak presyo due to
competition). In water, also no regulation
because of the new law RA 9225 about the
deregulation of fare rates.
 Habal-habal  illegal per se but RA 4136 does not
absolutely prohibit habal2x, recognizes the registration
of motorcycles for personal use NOT commercial use
(3) Reasonable, just and not contrary to public policy.
 Subject to the circumstances of the case
 DOES THIS REFER TO THE VALUABLE
CONSIDERATION IN (2)? NO
- This refers to the STIPULATION
SIR: Article 1744 talks about “limiting the liability” but IMO, this talks
about “limiting the degree of the diligence required”
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 TRANSPORTATION LAW 2013-2014
 When we talk about limitation of liability, supposedly the
law should be referring to 1747 (to be discussed in Chapter
4).
- e.g. In case of loss, damage, or deterioration of the
goods to be transported or being transported by the
common carrier, the liability of the carrier is fixed in
the sum of P100.00 unless the shipper declares a
higher price.
 The law (1744) was actually referring to the kind of
diligence that can be agreed upon by parties.
Jump a bit to Chapter 4: Article 1747 is connected with Article 1749. Article
1749 will talk about the reasonableness of the amount that is subject of the
limited liability.
- e.g. “fixed in the sum of P100.00”  valid pursuant to 1747. BUT
is P100 reasonable? Refer it to 1749
WHEN IT COMES TO EXTRAORDINARY DILIGENCE, DO YOU NEED
TO PROVE THAT YOU HAVE BASICALLY COMPLIED WITH THE
REQUIREMENTS OF SELECTION AND ENGAGEMENT OF YOUR
DRIVER AND CONDUCTOR?
- There is no use because later on when you take up torts
and damages, that only applies under 2176 on quasi-delict.
Proof on the selection and engagement is NOT a defense
for violation of contract of carriage.
- When you answer contract of carriage cases, do not ever
mention Selection and Engagement because that will only
show your ignorance of the law.
*If there is a particular problem that suits a case on the question of
extraordinary diligence, then you have to apply the ruling of the
Court with respect to that case.
- In the absence of a specific decision of the Court, then you
have to rely on 1733 and 1755.
- That does not prevent you from applying by analogy the
cases decided by the SC.
CASES:
REPUBLIC vs. LORENZO
Issue on the failure to surrender of the original bills of lading to the
consignee upon delivery
SC: The failure to surrender does NOT amount to the failure to
observe extraordinary diligence.
- What made the SC conclude that there was no failure to
exercise but that there was compliance was BECAUSE
there was acknowledgement receipt issued, signed by the
representatives of the consignee in lieu of the surrender of
the bills of lading. The very purpose why original BOL are
to be surrendered to the consignee is to make sure that
there is proof of the delivery of the goods and this
*405* TLD-HYC
objective was achieved by the issuance of the
acknowledgement receipt.
MARIANO vs. CALLEJAS
In relation to land transportation
The bus was travelling on the right lane and there was another
vehicle which overtook and which was already traversing on the
same lane where the bus was also plying.
SC: There was no reason for the driver of the bus to know and to
foresee whether the truck would be traversing on its own lane.
Given the circumstances, the lane where the vehicle was traversing
and the filing of the appropriate criminal cases against the driver of
the other vehicle, taken all in all, there was observance of the
exercise of extraordinary diligence.
EASTERN SHIPPING LINE vs. IAC
About a smoke that was noticed but the fire was already big and
there was proof that the fire started 24 hours before.
SC: There was failure.
*Do not be misled that if there is a fact of smoke, then you will
conclude that there is failure. Not necessarily because you have to
remember 1733 and 1755: with due regard for all the circumstances
of the case.
DELSAN TRANSPORT vs. CA
How did the common carrier try to prove compliance?
They have certificates of dry docking. It was inspected by the coast
guard.
SC: Those are not sufficient because when we talk about
seaworthiness, what is important is whether the vessel can
withstand the vicissitudes of the voyage.
If for example there were no big waves experienced, no strong
winds, no strong typhoon and the vessel sank. The common carrier
has to give an explanation why the vessel sank.
NATIONAL STEEL vs. CA
 What were shown as evidence were certificates of dry
docking, inspection.
SC: There was no negligence established. What is involved is a
tramping business and this is a private carrier. If the carrier is
private, then negligence must be proved. There is no presumption of
negligence compared to a common carrier.
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 TRANSPORTATION LAW 2013-2014
Q&A: WHAT IS THE EFFECT OF INSPECTION AND CERTIFICATE OF
THE COAST GUARD?
 These are just some of the proofs that: you complied with
law as to inspection and dry docking because there is a
rule in Marina that the ship needs to be dry docked every
five years. However this is not sufficient to show
seaworthiness. It is the actual encounter/voyage itself that
will determine given all the circumstances.
LOADSTAR SHIPPING vs. CA
- The carrier was aware of an approaching typhoon.
- SC: There was a failure to exercise.
COASTWISE LIGHTERAGE & MANILA STEAMSHIP CASES
- Referring to a patron who is unlicensed
NEGROS NAVIGATION vs. CA
- Overloading of passengers with the additional fact that the
captain was found to be playing mah-jong.
SIR: Sometimes it is illogical to know from the pronouncement of the
SC that if the captain is not supposed to play mah-jong, does it
follow that the captain has to be there 24 hours? What is then the
purpose of the chief mate/ assistant? Though it is not clear in the
case whether it was the rest period/break of the captain. What was
emphasized was that the captain was playing at the time of the
incident.
PHILIPPINE HOME ASSURANCE vs. CA
- Acetylene cylinder was placed in the accommodation area
which is intended for passengers.
*SIR: If the carrier cannot prove ENGINE FAILURE and whether it was
unexpected, that is failure to exercise extraordinary diligence.
WHAT IF BECAUSE OF THE FAILURE, THE PASSENGER’S TRIP WAS
DELAYED? DO YOU HAVE A CAUSE OF ACTION AGAINST THE
CARRIER?
- Whether there was a commitment by the common carrier
of the arrival;
o If no commitment, only an estimation, then you
may not be entitled to any reparation or
damages because of the delay
WHAT ARE THE POSSIBILITIES WHERE YOU CAN CLAIM DAMAGES
BECAUSE OF THE FAILURE TO EXERCISE?
- There has to be a physical injury or physical death in
relation to passengers
- In relation to goods  Loss, destruction, or deterioration
of the goods
*405* TLD-HYC
Q&A: If the carrier will say that the boat will leave but it will only
use one engine instead of three so the trip will be three hours
longer, are you allowed as a passenger to ask for a refund?
- YES because of the possible delay you will experience.
- Even in the absence of a fixed time, you have to refer to
the estimated time of arrival to consider which one is
reasonable.
PHILIPPINE AMERICAN GENERAL INSURANCE vs. CA
- Even if not overloaded but if the vessel is top heavy, that is
failure
- What is TOP HEAVY is a question of expertise.
SIR: I realized (after talking to the management of Robles Shipping)
that even if, as to the number of vehicles and passengers, it is within
the capacity, that is not overloaded. BUT in case, buhi-an na ang
anchor, when the vessel floats, magtakilid, then there is something
wrong. That is top heavy. It should be balanced when it floats. It
needs an expert witness to testify.
We will study about CONTAINERIZATION where the goods are
placed in a container. It is easier on the part of the common carrier
to place these containers in the hold because it is the same shape.
Q&A: IF THE VESSEL IS TOP HEAVY, DOES IT AUTOMATICALLY GIVE
YOU A CAUSE OF ACTION?
- It depends. You have to know if the vessel has the capacity
to be top heavy. If it has the capacity, then it can be top
heavy. But in the first place, if dili pwede ma.top heavy but
gi.top heavy, that is failure.
- Ground: It would be in the aspect of seaworthiness.
SULPICIO vs. FIRST LEPANTO-TAISHO
- During the unloading of the cargo placed on a crane, the
crane fell.
- SC: There was failure.
SIR: What bothers me, the SC did not discuss why there was failure. I
think it was because of the absence of any evidence presented by
Sulpicio Lines.
VECTOR SHIPPING vs. MACASA
- There was a defect in the ignition of the engine
- SC: There was failure
LAND: If there is TIRE EXPLOSION, it is under JUNTILLA vs.
FONTANAR.
- Carrier must establish what caused the tire explosion and
what are the probabilities surrounding the explosion.
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 TRANSPORTATION LAW 2013-2014
VICTORY LINER vs. RACE
- The owner of the bus cannot be compelled to accept the
driver who suffered a fractured leg because of an accident
and who is limping heavily.
NOCUM vs. LAGUNA TAYABAS BUS (do not forget)
- Whether there has to be inspection involved in land
transportation?
SIR: For me, I don’t think that the Nocum Case still applies. But
remember, given the circumstances on inspection in relation to
extraordinary diligence, you must cite Nocum in Land Transpo and
Saludo involving Air
There was a box allegedly filled with clothes but was found out to be
firecrackers. It blew up.
SC: The carrier is not duty bound to inspect.
- On passengers, SC said, “fairness demands that in
measuring a common carrier's duty towards its
passengers, allowance must be given to the reliance that
should be reposed on the sense of responsibility of all the
passengers in regard to their common safety.”
- SIR: I think that is not anymore applicable now, maybe
sauna na buotan pa ang mga tao.
SIR: How to solve in land transportation? For me, one method is
through these mechanical gauge/equipment. I.check jud like in the
airport.
- Can you claim Constitutional Right? I don’t think so
because it is deemed waived once you submit it. (Just like
in the malls)
SIR: IMO, Bus operators should invest on equipment to inspect
baggage. Government should mandate it. Or the same as Airport
terminals as long as it can be established that there would be no
loading and unloading in between. That is supposed to be the
concept of land transportation.
MAKIGLALIS KA SA AIRPORT, YOU DO NOT WANT YOUR BAGGAGE
TO BE INSPECTED, CAN YOU SUE THE CARRIER?
- NO, because the inspection is being done by a third party.
RA 6235: AN ACT PROHIBITING CERTAIN ACTS INIMICAL TO CIVIL
AVIATION, AND FOR OTHER PURPOSES.
- AUTHORS: Common carriers are bound
- SIR: NO, that is not the language of the language but for
purposes of bar exam, you have to answer as what the
authors have expressed. IMO, the language of the law did
not say “common carriers you are BOUND”, instead, it said
*405* TLD-HYC
“common carriers you are AUTHORIZED”. They may or
may not inspect.
STILL on NOCUM:
SC: With respect to baggage:
- “inquiry may be VERBALLY made if the cause/s of
apprehension is not apparent”  pwede wala
- Compare this with SALUDO: common carrier has the DUTY
to make inquiry
o But at present, airline companies are not making
any inquiry. It is the personnel of the airport
- SIR: May pag gibali: ang sa land unta ang “duty” and ang
sa air ang “may be verbally made”
SC: “When there are sufficient indications that the representations
of the passenger regarding the nature of his baggage may not be
true, in the interest of the common safety of all, the assistance of
the police authorities may be solicited, not necessarily to force the
passenger to open his baggage, but to conduct the needed
investigation consistent with the rules of propriety and, above all,
the constitutional rights of the passenger.”
“When there is evidence of circumstances indicating cause or causes
of apprehension, Common carrier MUST ACT”
- WHAT MUST HE ACT? Acts that are consistent with the
preceding paragraph; call the police for investigation but
not to force the passenger to open the baggage.
SIR: IMO, there is a bigger leeway on the part of the passenger who
has baggage in land transportation compared to air transportation.
In air transportation, the common carrier has the duty to make
inquiry, it is not its duty to ask repetition of statement and open the
bags and see it for itself.
That means maka.rely lang just like in LBC where they will ask you if
there is cash inside but you are the one who will place it inside the
package. If you put cash and later upon delivery, the cash
disappears, common carrier is NOT liable for not inspecting whether
or not there is cash because what is only required under SALUDO is
to make inquiry.
-o- ADDITIONAL MOOLAH -o-
SURRENDER OF BILL
CODE OF COMMERCE: ARTICLE 353: The legal evidence of the
contract between the shipper and the carrier shall be the bills of
lading, by the contents of which the disputes which may arise
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 TRANSPORTATION LAW 2013-2014 *405* TLD-HYC

regarding their execution and performance shall be decided, no Veloso: No, it is a ticket. Bill of lading is only good for goods. The
exceptions being admissible other than those of falsity and material ticket is a contract between the common carrier and the passenger.
error in the drafting.
 WHAT IS A BILL OF LADING?

After the contract has been complied with, the bill of lading which
the carrier has issued shall be returned to him, and by virtue of the
exchange of this title with the thing transported, the respective
obligations and actions shall be considered cancelled, unless in the
same act the claim which the parties may wish to reserve be
reduced to writing, with the exception of that provided for in Article
366.
A bill of lading is a written acknowledgment, signed by the master of
a vessel or other authorized agent of the carrier, that he has
received the described goods from the shipper, to be transported on
the expressed terms, to the described place of destination, and to be
delivered there to the designated consignee or parties. (AH)
 WHAT ARE TO BE CONTAINED IN A BOL?

In case the consignee, upon receiving the goods, cannot return the Veloso: The description of the goods, names of the parties (shipper
bill of lading subscribed by the carrier, because of its loss or of any and common carrier), the time and place of destination where the
other cause, he must give the latter a receipt for the goods goods are to be delivered, the rights and obligations of the parties.
delivered, this receipt producing the same effects as the return of
the bill of lading.  ARE YOU SAYING THAT THIS TICKET AND THE BOL ARE THE
SAME?
NOTE: LACKING CASES
- Kapalran vs. Coronado
Veloso: They are both considered as contracts.
- PAL vs. CA
- Cangco vs. Manila Railroad
- Solidbank vs. Sps. Tan  IF A BOL IS A CONTRACT, WHERE DO WE FIND THE
- Caltex vs. Sulpicio CONSENT?
- Manila Steamship vs. Abdulhaman
- Belgian Overseas vs. Phil First Insurance
- Valenzuela Hardwood vs. CA Veloso: When the shipper signs the BOL accepting all the terms
- Baritua vs. Nimfa stated in the document, the consent of the shipper is already
- Tabacalera vs. North Front Shipping
manifested. From the time the common carrier accepted the goods
- Aboitiz Shipping vs. Insurance
- Yrasuegui vs. Philippine Airlines and places their signature in order to manifest their consent.

 IS THERE ANY RELEVANCE BETWEEN THE SIGNING OF THE

MASTER OF THE BOL AND THE CONSENT AS AN ESSENTIAL
ELEMENT OF THE BOL AS A CONTRACT?

Veloso: Common carriers are bound to exercise extraordinary

diligence and are obliged to deliver the goods to the consignee or
the authorized person to receive the goods

 WHAT ARE THE OTHER TWO ELEMENTS OF A CONTRACT?

IN A BILL OF LADING?

Veloso: Consideration and Object/Cause? In BOL, consideration is

when the shipper gives the goods to the common carrier and the
carrier delivers it to the consignee and in return, the consideration
for the common carrier is the money given by the shipper. The cause
is for the delivery of the goods.
CHAPTER FOUR – BILL OF LADING
 IN A CONTRACT OF TRANSPORTATION, WHO ARE THE
ORALS:
PARTIES?
 IS THAT A BILL OF LADING? (SUPERCAT TICKET)
Ericson: The parties to this contract would be the

40
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passenger and the carrier.
 IF THERE IS VAGUENESS IN THE WORDING OF A
CONTRACT, HOW WOULD YOU RESOLVE IT?
Ericson: I would resolve it in the favour of the passenger because it
is provided for in the Civil Code that in contracts of carriage (Article
24). Like in contracts of adhesion, one of the parties is at a
disadvantage.
Article 24. In all contractual property or other relations, when one of
the parties is at a disadvantage on account of his moral dependence,
ignorance indigence, mental weakness, tender age and other
handicap, the courts must be vigilant for his protection.
 WHERE IN ARTICLE 24 WOULD A PASSENGER IN A
CONTRACT OF ADHESION FALL?
Ericson: It would be moral dependence or it would fall on the catch-
all provision “other handicap”. The handicap of the passenger would
be not being able to negotiate the terms and conditions of the
contract and being under the control of the carrier while on board.
THERE IS A DIFFERENCE WHEN YOU TALK ABOUT ELEMENTS THAT
WILL RIPEN INTO A CONTRACT AND THE OTHER SITUATION WOULD
HAVE SOMETHING TO DO WITH ENFORCEABILITY OF THE CONTRACT
BECAUSE ENFORCEABILITY OF EXCECUTION PRESUPPOSES THAT AT
THE INCEPTION, THERE EXISTED A VALID CONSENT TO PAY.
 WHY WOULD YOU NEGOTIATE IN THE FIRST PLACE?
Ericson: Perhaps to give more liability or responsibility to the carrier.
BILL OF RIGHTS OF PASSENGERS  THIS IS FOR AIRLINES. PLS READ
THESE WHEN YOU INTEND TO SUE AN AIRLINE.
 PARAGRAPH 18 (TICKET) SAYS: CLAIMS FOR INJURIES,
DEATH AND OTHER LIABILITIES MUST BE FILED WITH THE
CARRIER WITHIN 30 DAYS FROM THE DATE THE VESSEL
ARRIVED AT PORT OF DESTINATION. IS THAT VALID?
Erojo: Yes, it is not unreasonable and not contrary to public policy. I
read a case where there was a shipper which sent goods like rice.
There was a delay in the arrival of the goods. There was a stipulation
in the bill which states that if you would file an action against the
carrier, it must be within 60 days. The action was filed out of time.
 WHAT WAS THE REASON FOR THE STIPULATION?
Erojo: In order to protect the common carrier. I believe that the
earlier it is, at least the memories of the persons would still be fresh.
*405* TLD-HYC
 THE SECOND SENTENC READS: THE CARRIER WILL NOT BE
LIABLE FOR INJURIES, DEATH, AND OTHER LIABILITIES
ARISING FROM FORCE MAJEURE, OR EVENTS BEYOND THE
CONTROL OF THE CARRIER, ITS OFFICERS, CREWS, AGENTS
OR EMPLOYEES. IS THAT VALID?
Erojo: I believe there was also a case saying that if there was loss,
damage or deterioration of the goods, is caused by force majeure or
beyond the control of the carrier and its employees, then it would
have no liability. The court upheld it because the goods were store in
a government warehouse and then there was a fire. Although one of
the petitioners was able to retrieve some rice but the rest were
burned.
 IF YOU ARE THE LAWYER OF THE PASSENGER OR THE
SHIPPER OR CONSIGNEE WHO WOULD LIKE TO FILE AN
ACTION AGAINST THE CARRIER, CAN YOU ARGUE ON THE
BASIS OF THE FINE PRINTS THAT YOU WOULD SEE IN
EVERY TICKET?
Gaviola: Yes, I would base my arguments on the BOL or the ticket as
long as it is favourable to my client. It is favourable when the
application thereon would give more liability to the carrier.
 ARE YOU SAYING THAT THE SUFFICIENCY OF YOUR
ARGUMENT DEPENDS ON THE VALIDITY OF THE
STIPULATION OR DOES IT DEPEND ON THE
CIRCUMSTANCES SURROUNDING YOUR CLIENT?
Gaviola: It depends on the circumstances surrounding the client
since it is a contract of adhesion. For example there was ambiguity
on the BOL. If there is no ambiguity, I would argue on the basis of
the Civil Code wherein this would be interpreted liberally in favour of
the passenger.
Profile of the client: a farmer or carpenter and the stipulations on
the ticket (vessel’s ticket) would be in English or in such terms not
readily understandable by my client, so I can argue that my client is
in no position to know or to be aware of what is indicated in the
ticket. My client wasn’t able to finish college and he doesn’t know
how to read and write. His wife died and he has to be there for the
burial and it’s a place where there is only one ship sailing from Cebu
to that place.
 BUT ISN’T IT IN ONGYIU VS. CA THAT THE SC SAID THAT
THE SHIPPER/PASSENGER HAS THE RIGHT TO REJECT?
HOW WILL CHALLENGE THE ARGUMENT OF THE OTHER
PARTY IF THE LAWYER USES THIS CASE?
40
 TRANSPORTATION LAW 2013-2014
Gaviola: I would argue in the same ground that this is a contract of
adhesion and that my client has no other choice, for example, that
ship is the only one sailing that time and there was a sense of
urgency that he has to be on that ship, so he has no option.
TAKE NOTE THAT YOU HAVE TO DISCUSS THAT IN RELATION WITH
SWEETLINES VS. CA BECAUSE YOU HAVE TO NOTE THE PECULIAR
CIRCUMSTANCES IN THIS CASE. YOU CANNOT APPLY THAT IN ALL
CASES.
 PARAGRAPH 19. COURT JURISDICTION FOR SUITS. ALL
SUITS ARISING OUT OF THIS CONTRACT SHALL BE FILED
AND TRIED ONLY ON CEBU CITY. IS IT VALID?
Quibot: Yes, the venue of the suit can be stipulated.
 ASSUMING THAT THE TRIP IS CEBU-TAGBILARAN, THE
PASSENGER FILES IN TAGBILARAN, WOULD YOU FILE A
MOTION TO DISMISS ON THE GROUND OF IMPROPER
VENUE?
Quibot: Yes, because it is agreed in our contract that the only venue
allowed is in Cebu City.
 IF YOU WERE THE LAWYER OF THE PLAINTIFF, WHAT
WOULD YOU SAY TO FOR THE MOTION TO DISMISS NOT
TO BE GRANTED?
Quibot: I would say that the client wasn’t able to read it or he wasn’t
in the right state of mind because he was in a hurry or was in
distress...
 IF I AM THE LAWYER OF THE DEFENDANT AND I WOULD
ARGUE THAT THERE IS A SC CASE THAT SAYS UPON
PURCHASE OF THE TICKET, IF THERE IS NO OBJECTION
THEN THE BUYER IS DEEMED TO HAVE ACCEPTED THE
TERMS OF THE CONTRACT, HOW WOULD YOU CHALLENGE
THAT?
Quibot: As much as the law is black and white, (di kaau ko ka
klaro)... there are times that we are blinded by emotions...
-o- DISCUSSION -o-
BILL OF LADING AND OTHER FORMALITIES
*405* TLD-HYC
For purposes of examination, know about Clean vs. Foul, Received
for shipment and On Board (Won’t ask about the others daw!)
CLEAN BILL OF LADING
Case in point is Republic vs. Lorenzo
- SC: even if it is true that the goods were really damaged at
the time of receipt by the common carrier, this will not
change the clean bill of lading that was issued.
IRON BULK VS. REMMINGTON INDUSTRIAL
- What does the common carrier do if it observes damage to
goods for shipment before sealing and issuance of BOL?
o Annotate or
 In the form of a marginal note in the
BOL indicating the true condition
o Refuse acceptance
- In the CASE, there was an issue; common carrier
contended that their BOL was a pro-forma. Court did not
accept their argument because even if it is PRO-FORMA,
what they should have done was to make a marginal note
in the BOL.
-o- ADDITIONAL MOOLAH -o-
CLEAN BILL OF LADING is one which does not contain any notation
indicating any defect in the goods.
FOUL BILL OF LADING is one that contains such notation.
-o- carry on -o-
BOL is just a piece of paper. Lesser contents only: name of the
parties, quantity, name of the consignee who will supposedly sign,
conditions, name of the vessel, date, shipper, and destination.
PROVIDENT INSURANCE VS. CA
- ISSUE: stipulation on notice of claim
- Reiteration of Article 366 of the Code of Commerce:
o Within twenty-four hours following the receipt of
the merchandise a claim may be made against
the carrier on account of damage or average
found upon opening the packages, provided that
the indications of the damage or average giving
rise to the claim cannot be ascertained from the
exterior of said packages, in which case said
claim shall only be admitted at the time of the
receipt of the packages.
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 TRANSPORTATION LAW 2013-2014
- If the damage is apparent, then it should be made at the
time of delivery. If not, it should be made within 24 hours
in writing.
- SC: the stipulation is VALID.
SIR: Theoretically, if there is a stipulation that probably shortens the
filing of a notice of claim, my opinion is would probably be
considered invalid because it would be too short.
- For example: if you put, “if the damage is apparent from
the package, then it should be made on the time of
delivery, otherwise it should be made within 5 days from
delivery, in writing, under oath by personally registered
mail or private courier.
- Not the whole stipulation can be declared invalid IMO.
Probably the part only that requires a shorter period than
Article 366 because this provision requires 24 hours.
It may also be valid depending on the nature of the business or the
industry covered.
- SIR: so far I cannot think of an industry or business which
would require a shorter period within which to file a notice
of claim.
*THE RULE ON STIPULATION is the validity will depend on the
circumstances of the case and the nature of the stipulation.
SERVANDO VS. PHIL. STEAM NAVIGATION
- There is an exemption clause exempting the carrier from
responsibility by reason of force majeure, dangers or
accidents of the sea or other waters, war, public enemies
and fire.
- The goods were placed in the customs warehouse, part of
it was already withdrawn. There was an issue before
whether there was already delivery to the consignee
which SC said that there was already delivery because the
consignee was already informed of the arrival and have
the reasonable opportunity to remove or dispose the
goods.
- The other issue was the validity of the exemption clause.
- SC: VALID. It is a reiteration of what is provided in the Civil
Code that exempts a person from liability if the cause is
force majeure.
IF it is a mere REINSTATEMENT of what is provided by law that can
be upheld by the Court.
- In the case of Servando, prior to the challenged stipulation
is another sentence which says: Carrier shall not be
responsible for loss or damage to shipments billed
“owner’s risk” unless such loss or damage is due to
negligence of carrier.
*405* TLD-HYC
- Article 1745: Any of the following or similar situations shall
be considered unreasonable, unjust and contrary to public
policy:
o (1) That the goods are transported at the risk of
the owner or shipper;
- Anyway, there was NO issue on this sentence.
VENUE:
SWEETLINES CASE
- It is hereby agreed and understood that any and all arising
out of the conditions and provisions of this ticket
irrespective of where it is issued shall be filed in the
competent courts in the city of Cebu  INVALID
- 2 REASONS:
PILIPINO TELEPHONE VS. TECSON (GR 156966)
- Ponente’s Opinion: There was a circumstance in the case
of Sweetlines that made the SC to conclude the stipulation
to be invalid. Those circumstances include the monopoly
in the coastwise industry by other shipping companies and
there is a season (like Christmas Season) where the
passengers would not anymore bother to read the
stipulations.
- “The circumstances in  Sweet Lines, Inc. vs. Teves,
[6]
  wherein this Court invalidated the venue stipulation
contained in the passage ticket, would appear to be rather
peculiar to that case.   There, the Court took note of an
acute shortage in inter-island vessels that left passengers
literally scrambling to secure accommodations and tickets
from crowded and congested counters.   Hardly, therefore,
were the passengers accorded a real opportunity to
examine the fine prints contained in the tickets, let alone
reject them. “
- Q: ARE THOSE CIRCUMSTANCES STILL PRESENT NOW?
o Probably there is a monopoly in other routes but
not in all cases. Example: Ormoc-Cebu, there are
already 3 shipping companies involved in
fastcraft (Supercat, Weesam, Oceanjet)
o You will have to examine by the same nature of
the vessel. You cannot say that there is no
monopoly because there is a fastcraft and there
is a slowboat because they are two different
characteristics.
YSMAEL VS. BARRETTO
The stipulation reads “the carrier shall not be liable for loss or
damage from any cause or for any reason to an amount in excess of
three hundred pesos or any single package of silk or other valuable
cargo”
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 TRANSPORTATION LAW 2013-2014
- Specifically refers to silk and what is referred here as
unconscionable and void was the amount of three
hundred pesos per package of silk.
- SC: the value of the silk is about P2,000, so it is
unconscionable to only limit it to P300
- NOTE: Ysmael has been decided long time ago and you can
still argue that contracts of adhesion are not prohibited
per se and therefore if there is a stipulation similar to this,
there is a probability that it can still be upheld by the
court.
TWO-FOLD CHARACTER OF BOL
- Receipt
- Contract
- Third: Symbol of Goods or Document of Title
BOL AS A CONTRACT
When it is a contract, parties are bound and a contract of
transportation is subject to Article 1733 to 1754.
WHAT ARE THE IMPLICATIONS OF A BOL AS A CONTRACT?
- Presumption of Negligence
- Extraordinary diligence required
CAN THERE BE A REDUCTION OF DILIGENCE?
- Yes, as long as those 3 requisites are present
Limitation of Liability Principle under 1749
Article 1749: A stipulation that the common carrier’s liability is
limited to the value of the goods appearing in the bill of lading,
unless the shipper or owner declares a greater value, is binding.
- 3 STIPULATIONS: 2 are prohibited and 1 is allowed
- IF you are asked for the UNQUALIFIED LIMITATION, then
you just have to 1749 without the UNLESS.
TAKE NOTE: There are BOL that will not lose the very phrase under
1749. Probably the stipulation will read: The common carrier’s
liability for loss, damage or deterioration of goods will only be
limited to the amount of P500. The shipper may however recover
more than the amount of P500 if the shipper declares a higher value
and pays the corresponding freight.
- It is not the exact wording as that provided by law but to
be sure, you can state it as worded by 1749.
To determine the REASONABLENESS of the limitation, your legal
basis is 1750.
*405* TLD-HYC
- Do not use 1749 since this is only as to the limitation of
the liability but the reasonableness of the AMOUNT is
based under 1750.
Article 1750. A contract fixing the sum that may be recovered by the
owner or shipper for the loss, destruction, or deterioration of the
goods is valid, if it is reasonable and just under the circumstances,
and has been fairly and freely agreed upon.
-o- ADDITIONAL MOOLAH -o-
VALIDITY OF STIPULATIONS
ARTICLE 1744: A stipulation between the common carrier and the
shipper or owner limiting the liability of the former for the loss,
destruction, or deterioration of the goods to a degree less than
extraordinary diligence shall be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the
service rendered by the common carrier; and
(3) Reasonable, just and not contrary to public policy.
Art. 1745. Any of the following or similar stipulations shall be
considered unreasonable, unjust and contrary to public policy:
(1) That the goods are transported at the risk of the owner
or shipper;
(2) That the common carrier will not be liable for any loss,
destruction, or deterioration of the goods;
(3) That the common carrier need not observe any
diligence in the custody of the goods;
(4) That the common carrier shall exercise a degree of
diligence less than that of a good father of a family, or of a
man of ordinary prudence in the vigilance over the
movables transported;
(5) That the common carrier shall not be responsible for
the acts or omission of his or its employees;
(6) That the common carrier's liability for acts committed
by thieves, or of robbers who do not act with grave or
irresistible threat, violence or force, is dispensed with or
diminished;
(7) That the common carrier is not responsible for the loss,
destruction, or deterioration of goods on account of the
defective condition of the car, vehicle, ship, airplane or
other equipment used in the contract of carriage.
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 TRANSPORTATION LAW 2013-2014
Zzzz.....
CASES WHERE THE STIPULATION WAS UPHELD BY SC
*SERVANDO
- Reiteration of the New Civil Code regarding force majeure
regarding exemption for liability
*PROVIDENT INSURANCE
- Notice of claim
*MAGELLAN MANUFACTURING VS. CA
- Regarding on board bill and receipt for shipment: It was contended
that the receipt for shipment was converted into an on board bill.
- SC: That is not possible, that is stretching substantial compliance
too far and that would eliminate the difference between the two
bills.
*ONGYIU VS. CA
- Leading case on questions where the ticket was not signed by a
passenger  one of the arguments of the Ongyiu, a lawyer
- SC: That is not material because there can be a binding contract
even if there is no signature by the passenger.
- Upheld the limitation of liability  Leading case for contracts of
adhesion
- Ongyiu, as a lawyer and businessman, cannot claim ignorance of
the terms and conditions of the ticket. That is resolving the validity
of the stipulation depending on the circumstances of the case.
CASES WHERE THE STIPULATION WAS NOT UPHELD BY SC
*SWEETLINES
- SC: There is shortage of interisland vessels, piers are congested,
conditions are worse at peak and/or rainy seasons, immediate
concern of passengers is to be able to board.
- If you are the lawyer of the carrier, you just have to dispute all of
this circumstances so that you can validate the validity of the
stipulation on venue.
*MAERSK LINE VS. CA
- A stipulation that the carrier does not undertake the arrival of
goods at any particular time.
- SC: INVALID, because it should be made within reasonable time
NOTE: There are 3 articles in the New Civil Code that provide for
valid stipulations on the limitation of the carrier’s liability.
*405* TLD-HYC
(1) ARTICLE 1748: An agreement limiting the common carrier’s
liability for delay on account of strikes or riots is valid.
(2) ARTICLE 1749: A stipulation that the common carrier’s
liability is limited to the value of the goods appearing in the
bill of lading, unless the shipper or owner declares a greater
value, is binding
(3) ARTICLE 1750: A contract fixing the sum that may be
recovered by the owner or shipper for the loss, destruction, or
deterioration of the goods is valid, if it is reasonable and just
under the circumstances, and has been fairly and freely
agreed upon.
UNDER WHAT CIRCUMSTANCES CAN A COMMON CARRIER NOT
AVAIL OF LIMITED LIABILITY?
1. ARTICLE 1747: If the common carrier, without just cause,
delays the transportation of the goods or changes the
stipulated or usual route, the contract limiting the
common carrier’s liability cannot be availed of in case of
the loss, destruction, or deterioration of the goods.
2. ARTICLE 1749: xxx when the shipper declares a higher
value.
WHAT IS THE EFFECT OF THE LIMITED LIABILITY CLAUSE TO THE
PRESUMPTION OF NEGLIGENCE?
- ARTICLE 1752: Even when there is an agreement limiting
the liability of the common carrier in the vigilance over the
goods, the common carrier is disputably presumed to have
been negligent in case of their loss, destruction or
deterioration.
SIR: With respect to airlines, in the Warsaw Convention, the Bill of
Rights of Passengers, you read this.
HOW TO APPLY PAROL EVIDENCE RULE INSOFAR AS BOL IS
CONCERNED
PAROL EVIDENCE  kind of evidence that is not in the document
- Rule is: what has been stated there, that is the complaint
agreement of the parties and that is in the case of BOL.
- Example: if what is issued is a clean BOL, the carrier cannot
be permitted to modify (that is not in actuality or reality a
clean bill because the moment we receive the goods, the
goods have already suffered defects), the carrier is
prevented to do that.
- That is the rule in evidence subject to a lot of exceptions
later (Evidence laters!!)
For BOL, you should be able to raise it as an issue in your pleading,
either complaint or answer, and you raise it as an issue during pre-
trial conference.
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- The common carrier, who may be benefited all the time on
the BOL specially on limitation of liability, will always cling
on to that BOL because it is a contract.
Parol evidence rule is also the rule why the shipper, who has a
package which sustained damage, will not be allowed to recover the
actual value on the package that was damaged by reason of what is
the limitation stated in the BOL unless the shipper declares a higher
value.
In the case of ONGYIU, for example, what he lost was his evidence
inside his maleta going to Butuan. His maleta was misplaced, instead
of Butuan, it went to Manila. Ongyiu wanted to recover the value of
the lost articles.
- SC: There is a limitation of the liability in the ticket, you did
not declare a higher value therefore you are bound
because the ticket is a contract.
BOL AS AN ACTIONABLE DOCUMENT
HOW do you apply/allege BOL as an actionable document?
- What is required under RULE 8 is: you allege the substance
of the actionable document and attach a copy of the
document to your pleading.
WHAT is the effect if you do not allege sufficiently as what is
required? Does RULE 8 apply?
- The RULE is silent. While there is an implication of not
specifically denying under oath that will result to
admission, there is nothing under RULE 8 of the effect if
there is no sufficient allegation as to actionable document.
- The admission as to genuineness and due execution, if you
do not deny it specifically under oath, presupposes that
the allegation is sufficient.
RULE 8 says, it can be pleaded as a cause of action or as a defense. In
normal cases in transpo, an actionable document is pleaded in an
answer because the common carrier is the one commonly sued and
the common carrier is usually the one who will use the actionable
document. Among other things, there is a stipulation there that will
be advantageous to the common carrier and that is the limitation of
liability or notice of claim.
Emphasis on the specific denial under oath of the actionable
document in the answer IF you are the lawyer of the PLAINTIFF
because a REPLY is not mandatory.
- If you are deemed to admit the due execution, how will
you contest what is provided there?
- SIR: Probably lang, although I haven’t encountered it yet,
you could probably contest the amount but I think that is
stretching too far.
*405* TLD-HYC
COGSA: CARRIAGE OF GOODS BY SEA ACT
Under the law, COGSA, liability is $500 per package.
EASTERN SHIPPING LINES VS. IAC citing MITSUMI and Co. (U.S.
CASE)
- BOL says: 2 containers and then below it, 128 cartons,
below it is the description of the goods “men’s garments,
fabrics and accessories, freight paid”
- CONTAINERIZATION: There is one container with goods
inside (especially from abroad).
- UNDER COGSA, is one container, one package?
o Example: if you have 100 boxes inside one
container, then you have 101 packages, so; 101 x
$500 = 50,500
o In the Masters of Law program, we were told
that one container should be considered as one
package.
- SC: The bill described the goods as 128 cartons to be
multiplied with $500, not 2 containers only to be
considered as packages.
o In this case, the SC did not consider the 2
containers as 2 packages, hence only 128 cartons
and not 130
Q&A: Would it be that the container would be considered as a
package if it is provided by the shipper but if the containers were
provided by the shipping company, it would not count?
- CASE is silent on this
- One thing also considered by the SC is that they are not
sure who provided for the containers.
- But as a GENERAL RULE: (Present Rule) SC said that if the
merchandise is contained in one container without
indicating the units found inside the container and without
describing the goods, then one package ONLY.
- BUT if one container describing what is inside (boxes,
cartons, etc) and also describing the merchandise, then
the shipping units would be the number of packages or
boxes INSIDE the container, should be multiplied by $500.
Q&A: With regards to the value of $500, is the carrier allowed to
prove the actual value of the goods per package so we can have a
lower value (let’s say only $250 per package of garments)?
- Normally, in practice now, those containers going to the
warehouse, called LOAD AND COUNT, the shipper is the
one who will load and seal the cargoes inside the
containers. The responsibility would then fall to the
shipper, the carrier would then have nothing to do with
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the value of the goods placed inside by the shipper CHAPTER 5: ACTIONS AND DAMAGES IN CASE OF BREACH
himself.
- Same with the “said-to-weigh” clause in a case, the ORALS:
shipper is the one who knows the weight, the carrier will
 WHAT IS CULPA CONTRACTUAL?
rely on the shipper for this.
- Remember that the $500 is the limit provided for by law, it
Garcia: it is one of the sources of obligation. It is based on contract,
cannot be lowered.
so can be availed if there’s a breach of contract.

SECTION 4(5) OF COGSA: Neither the carrier nor the ship shall in any  HOW IS IT AVAILED IN THE CONTEXT OF TRANSPO?
event be or become liable for any loss or damage to or in connection
with the transportation of goods in an amount exceeding $500 per G: For example, there is an accident. You can sue the CC for breach
package of lawful money of the United States, or in case of goods of contract of carriage.
not shipped in packages, per customary freight unit, or the
equivalent of that sum in other currency, unless the nature and  CAN YOU SPECIFY THE COMMON CARRIER? GIVE DETAILS:
value of such goods have been declared by the shipper before
G: Example, the Ceres company, with a driver. I met an accident. I
shipment and inserted in the bill of lading. This declaration, if
can sue Ceres for breach of contract.
embodied in the bill of lading, shall be prima facie evidence, but
shall not be conclusive on the carrier.
 WHAT ARE THE CIRCUMSTANCES WHY YOU MET THE
ACCIDENT?
By agreement between the carrier, master or agent of the carrier,
and the shipper another maximum amount than that mentioned in G: It collided with another bus.
this paragraph may be fixed: Provided, That such maximum shall not
be less than the figure above named. In no event shall the carrier be  WERE YOU ALONE? WHAT ABOUT THE PRIVATE VEHICLE?
liable for more than the amount of damage actually sustained.
G: I’m with the passengers. The private vehicle is driven by the
Neither the carrier nor the ship shall be responsible in any event for owner only.
loss damage to or in connection with the transportation of the goods
 YOU SAID THAT YOU WERE INJURED BY THE SAID
if the nature or value thereof has been knowingly and fraudulently
ACCIDENT. WHAT ARE THE INJURIES CAUSED?
mis-stated by the shipper in the bill of lading.

G: Example sir, my leg was fractured.

SIR: I mentioned the case of Eastern Shipping. The issue was what
shipping unit shall be used. Whether the 120 cartons as indicated in  WAS THERE DAMAGE IN THE BUS?
the Bill of Lading or the 2 containers. No issue on the conversion of
the money. But I don’t usually handle COGSA cases because they G: Yes Sir
usually go to manila.
 SO, YOU SAID YOU CAN SUE THE CC. WHO WILL YOU SUE?
With regards to reduction of liability under COGSA, I haven’t read a
case involving that. G: The Ceres bus.

NOTE: LACKING CASES

- Lorenzo Shipping vs. Chubb and Sons
- Saludo vs. CA
- Belgian Overseas vs. Phil First
- Asian Terminals vs. Simon Enterprises
 DOES THE CERES BUS HAVE A LEGAL ENTITY?
G: Yes, it has a juridical entity. As registered by SEC.
 HOW WILL YOU KNOW THAT IT IS THE CERES COMPANY
THAT YOU WILL SUE? HOW WILL YOU GET THE DATA?
WERE YOU ISSUED A TICKET? WAS THE NAME OF THE
CERES COMPANY PLACED?

G: YES sir.

 SO WHICH WILL YOU RELY, THE NAME ON THE TICKET OR

THE NAME IN THE SEC?

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G: I will choose what’s stated in the ticket.
 WILL YOU INCLUDE THE INCORPORATORS AS STATED IN
THE SEC?
G: No sir because the Corporation has a separate Entity from their
incorporators.
 WHO ELSE WILL YOU SUE?
G: the Driver
 WHAT IS THE SUIT WILL YOU FILE?
G: Civil Case for damages sir. I will implead Ceres and Driver. And
also the private vehicle. I will also file a criminal case under Art 100
of RPC but it will be separate.
 SO, ONLY THOSE 3 IN THE CIVIL CASE?
G: Yes sir.
 IN THE CRIMINAL CASE, WHO WILL YOU INCLUDE?
G: The Driver of the Ceres bus sir. I’ll also include the driver of the
private vehicle.
 WHY WILL YOU IMPLEAD THE DRIVER OF THE CERES BUS?
G: Because he contributed to the injury.
 ARE YOU SAYING THAT THE DRIVER IS NEGLIGENT?
G: Yes sir, he can be negligent.
 WHAT WILL YOU ALLEGE IN YOUR COMPLAINT IN
RELATION TO THE CERES BUS?
G: I will allege that I was a passenger as evidenced by the ticket.
There was a perfected contract. That the bus was not able to
complete its obligation.
 HOW ABOUT THE INJURIES SUSTAINED?
G: Yes, I will include that I was injured, particularly the fracture. Then
I will ask for damages.
 WHAT DAMAGES?
G: Actual damages particularly by reason by the of the injury I
sustained from the accident.
 HOW WAS THAT PARTICULARIZED?
*405* TLD-HYC
G: I got injured, I was hospitalized, I was forced to hire the services of
Physical Therapist. I was forced to pay the hospital bills. I was not
able to work.
 ASIDE FROM ACTUAL, IS THERE ANY KIND OF DAMAGE
YOU WILL ASK?
G: I will ask exemplary damages to set up an example to the public
 GARCIA MENTIONED ABOUT IMPLEADING THE DRIVER OF
THE CERES BUS, WILL YOU ALSO IMPLEAD THE DRIVER IN
THAT CIVIL CASE FOR DAMAGES?
Querubin: It depends as to what the cause of your action is. If the
cause of your action is culpa contractual, then there is no need for
you to implead the driver of the bus since ... (interrupted ni sir)
 WILL YOU IMPLEAD?
Querubin: I will not implead the driver of the Ceres bus because the
cause of my action is culpa contractual. In that case, the one who is
liable is the operator or the owner of the bus company and even if I
will implead the driver, the driver is not liable, only the bus owner.
 ISN’T IT THAT THE DRIVER CAN ALSO BE HELD LIABLE
UNDER A DIFFERENT SOURCE OF OBLIGATION?
Q: Yes, under culpa aquiliana (quasi-delict).
 BASED ON THE EXAMPLE, WHO ARE THE PERSONS YOU
ARE GOING TO SUE?
Q: The persons I am going to sue is: first, the bus owner/company;
second: driver. If there is a third person, then I’m also gonna include
that third person.
 WHY WILL YOU INCLUDE THE DRIVER WHEN HE IS NOT A
PARTY TO THE CONTRACT OF TRANSPORTATION?
Q: He is still liable for quasi-delict.
 WHAT ABOUT THE OWNER OR THE DRIVER OF THE
PRIVATE VEHICLE? WHY WILL YOU BRING HIM IN?
Q: He is also liable for quasi-delict.
 WHAT IS YOUR CAUSE OF ACTION FOR THE CERES BUS
COMPANY AND THE DRIVERS?
Q: Culpa contractual under the Contract of Carriage for the company
and culpa aquiliana for the driver of the bus and the private vehicle.
 WHAT WILL YOU PROVE IN COURT TO HOLD BOTH THE
COMPANY AND THE DRIVERS LIABLE?
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Q: With regards to the carrier, I would have to prove that failure to
exercise extraordinary diligence and failure to send the passenger to
his destination. I would have to prove that there is an existing
contract and there is damage, injury. With regards to the third
person, I would have to prove that there is a injury to the passenger
and also that there is damage and gross negligence.
 SO, THERE IS DIFFERENCE BETWEEN THE TWO INSOFAR AS
NEGLIGENCE IS CONCERNED? YOU CAN ALSO SUE THE
COMMON CARRIER BASED ON NEGLIGENCE?
Q: No, negligence is only one of the elements.
 CAN YOU ALSO SUE THE COMMON CARRIER BASED ON
QUASI-DELICT AND NOT ON CULPA CONTRACTUAL?
Q: Yes.
 CAN YOU ALLEGE THIS SEVERAL CAUSES OF ACTION EVEN
IF THEY CONFLICT WITH EACH OTHER IN ONE COMPLAINT?
WHY?
Q: Yes because you can implead any causes of action for as long as...
That legal concept is called joinder of causes of action.
 IF THE DEFENSE OF THE COMMON CARRIER IS DILIGENCE
IN THE SELECTION OF THE EMPLOYEE, DRIVER, IS THE
DEFENSE PROPER?
Q: No, the defense is not proper because the driver is not privy to the
contract, there is no privity of the contract.
 WHAT WAS YOUR CAUSES OF ACTION AGAINST THE
COMMON CARRIER?
Q: Culpa contractual. I can also sue for quasi-delict.
 IF THE DEFENSE OF THE COMMON CARRIER IS DILIGENCE
TO THE SELECTION AND ENGAGEMENT, IS IT PROPER?
Q: With regards to quasi-delict, they can invoke it but with regards
to culpa contractual, then no.
 IF YOU WERE THE LAWYER OF THE COMMON CARRIER,
WILL YOU INVOKE THAT DEFENSE?
Q: Yes, I can invoke as many defenses as I can.
 IF YOU WILL NOT INVOKE THAT DEFENSE, THAT WHAT IS
YOUR DEFENSE IN RELATION TO THE QUASI-DELICT CAUSE
OF ACTION AGAINST THE COMMON CARRIER?
Q: I think it is better to invoke.
*405* TLD-HYC
 IN THAT CAUSE OF ACTION AGAINST THE COMMON
CARRIER BASED ON CONTRACT, YOU HAVE SEVERAL
DEFENSES RIGHT? EXTRAORDINARY DILIGENCE, ETC., IS IT
ALRIGHT TO INVOKE INCONSISTENT DEFENSES IN ONE
ANSWER?
Q: I think so.
 HOW CAN YOU RECOVER ACTUAL DAMAGES?
Veloso: By showing the receipts that I took from the medical exams
for the damage I sustained during the accident.
 IS RECEIPT ALONE THE ONLY PROOF?
V: If due to the injury, I was absent and I was deprived of my income
during that day, then I can also use that to claim actual damages.
 HOW WILL YOU PROVE THAT IN COURT?
V: I can use the time-card as evidence that I was really absent due to
my injury. Testimonies of the doctors will prove that I really did
sustain injuries.
 WHY WILL YOU PRESENT DOCTORS? CAN THE DOCTORS
TESTIFY ON THE AMOUNT THAT YOU PAID FOR THE
EXPENSE?
V: Yes. Pertaining to the bill, you can go to the cashier of the hospital
to show.
 IF YOU WERE GIVEN A BILL BY THE HOSPITAL, IS THE BILL
SUFFICIENT? BILL OR RECEIPT?
V: Receipt, after you pay.
 WHAT ABOUT THE PROFESSIONAL FEES YOU PAID THE
DOCTOR WHERE YOU WERE NOT ISSUED A RECEIPT? CAN
YOU RECOVER IT? WHAT IS YOUR PROOF?
V: My testimony is insufficient to claim actual damages because in
actual damages, you need sufficient documents to prove that you
sustained injuries.
 ENLIGHTEN US ON THIS NET EARNING CAPACITY
Aguilar: Net earning capacity is used to determine actual damage.
Let’s say the person was injured or died during the course of his
travel. So the net earning capacity will be used to determine.
 IS A PERSON STILL LIVING ENTITLED TO LOSS OF EARNING
CAPACITY?
A: Yes. If the injury that he sustains permanently disables him.
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 WHAT IS THE FORMULA?
A: Life expectancy multiplied with the difference of the gross annual
income and the necessary expenses incurred by the person.
 WHAT IS THE FORMULA FOR LIFE EXPECTANCY?
A: 2/3 X 80 – age of death
 IF THERE ARE NO RECEIPTS TO SUBSTANTIATE THE
EXPENSES, WHAT IS THE RULE? WHAT IS THE POLICY OF
THE SC?
A: Generally, the damages will not be awarded for those are not
substantiated by documentary evidence. The policy of the SC, the
living expenses will be 50% of the net annual income
 IF ACTUAL DAMAGES THAT WERE PRAYED BY PLAINTIFF
OR THE HEIRS OF PLAINTIFF WHO DIED CANNOT BE
SUBSTANTIATED, ARE THE HEIRS STILL ENTITLED TO
RECOVER DAMAGES? AND IF SO, WHAT ARE THOSE
DAMAGES?
A: The heirs can recover moral damages.
 IN THE CONTEXT OF TRANSPORTATION, HOW CAN THE
HEIRS RECOVER MORAL DAMAGES?
A: The heirs can recover moral damages because of the grief.
 IS IT AUTOMATIC?
A: If it is death, the moral damages are usually automatic.
Not mine but ako lang i.apas ang discussions ni sir… tnx)
Chapter 5
Actions and Damages in Case of Breach
 Cause of action of a passenger and shipper:
a) against common carrier – based on culpa contractual or culpa
aquiliana
b) on the part of the driver – based on either culpa delictual or
culpa aquiliana
Note: the source of obligation based on culpa contractual is separate
and distinct from quasi-delict
*405* TLD-HYC
Article 1903 (last paragraph) – 2 things are apparent:
1. That when an injury is caused by the negligence of a
servant or employee there instantly arises a presumption
of law that there was negligence on the part of the master
or the employer either in the selection of the servant or
employee, or in supervision over him after the selection,
or both
2. That presumption is juris tantum and not juris et de jure,
and consequently may be rebutted
Note however: that Article 1903 of the Civil Code is not applicable to
acts of negligence which constitute the breach of contract. It is
applicable only to culpa contractual
 The fundamental distinction between obligation of extra-
contractual and those which arise from contract, rests upon
the fact that in cases of non-contractual obligation it is the
wrongful or negligent act or omission itself which creates the
vinculum juris, whereas in contractual relations the vinculum
exists independently of the breach of the voluntary duty
assumed by the parties when entering into the contractual
relation.
CONCURRENT CAUSES OF ACTION
- There is one action but several causes of action
- The same act that breaches the contract may also be
tort
Note: the cause of action of a passenger or shipper against the
common carrier can be culpa contractual or culpa aquiliana while
the basis of liability on the part of the driver is either culpa delictual
or culpa aquiliana. The driver of the carrier is not liable based on
contract because there is NO PRIVITY of contract between him and
the passenger or shipper.
If the negligence of third persons concurs with the breach, the
liability of the third person who was driving the vehicle and/or his
employer may be based on quasi delict. The driver alone may be
held criminally liable and civil liability may be imposed upon him
based on delict. In the latter case, the employer is subsidiarily liable.
Remember: it does not make any difference that the liability of one
springs from the contract while that of the other arises from quasi-
delict. If the owner and driver of the other vehicle is not impleaded,
the carrier may implead them by filing a third party complaint.
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 Solidary liability
- In case the negligence of the carrier’s driver and a third
person concurs, the liability of the parties – carrier and his
driver, third person – is joint and several.
NOTICE OF CLAIM AND PRESCRIPTIVE PERIOD
A. Overland Transportation of Goods and Coastwise Shipping
a) When to file a claim with carrier
- Art. 366 constitutes a condition precedent to the
accrual of a right of action against a carrier for
damage caused to the merchandise.
 Under Art. 366 of the Code of Commerce, an action for
damages is barred if the goods arrived in damaged condition
and no claim is filed by the shipper within the following
period:
1. Immediately if damage is apparent;
2. within twenty four (24) hours from delivery if damage
is not apparent
- The period does not begin to run until the consignee has
received possession of the merchandise that he may
exercise over it the ordinary control pertinent to
ownership.
- This provision applies even to transportation by sea within
the Phils. or coastwise shipping.
- Does NOT apply to misdelivery of goods
Q: Why does it not apply to misdelivery of goods?
A: In such cases (misdelivery), there can be no question of claim for
damages suffered by the goods while in transport, since the claim
for damages arises exclusively out of the failure to make delivery.
Case: Monica Roldan vs. Lim Ponzo and Co.
- Article 366 of the Commercial Code is limited to cases of
claims for damage to goods actually turned over by the
carrier and received by the consignee.
 But the period prescribed in Art. 366 may be subject to
modification by agreement of the parties.
 The validity of a contractual limitation of time for filing the
suit itself against a carrier shorter than the statutory period
*405* TLD-HYC
thereof has generally been upheld as such stipulation merely
affects the shipper’s remedy and does not affect the liability
of the carrier.
b) Extinctive Prescription
- six (6) years if there is no written contract (bill of
lading)
- ten (10) years if there is written contract
 This rule likewise applies to carriage of passengers for
domestic transportation.
B. International Carriage of Goods by Sea
 A claim must be filed with the carrier within the following
period:
1. if the damage is apparent the claim should be filed
immediately upon discharge of the goods; or
2. within 3 days from delivery if damage is not apparent
 Filing of claim is not condition precedent. Thus, regardless of
whether the notice of loss or damage has been given, the
shipper can still bring an action to recover said loss or
damage within one year after the delivery of the goods or the
date when the goods should have ben delivered
a) Prescription
 Action for damages must be filed within a period of one (1)
year from discharge of the goods.
 The period is not suspended by an extra-judicial demand.
(why? Transportation of goods by sea should be decided in as
short a time as possible)
o Case: Dole Philippines Inc. vs. Maritime Company
of the Philippines - the prescriptive period is not
tolled or interrupted by a written extra-judicial
demand. Article 1155 is NOT applicable.
 The period does not apply to conversion or misdelivery.
 The one (1) year period refers to loss of goods and not to
misdelivery.
- Damages arising from delay or late delivery are not the
damage or loss contemplated under the COGSA. The
goods are not actually lost or damaged. The applicable
period is ten (10) years.
- Case: Domingo Ang vs. American Steamship Agencies
 What is to be resolved – in order to determine
the applicability of the prescriptive period of one
year – is whether or not there was loss of the
goods subject matter of the complaint.
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 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 such a way that
their existence is unknown or they cannot be
recovered. (note: it is not loss due to misdelivery
or delivery to the wrong person)
 This rule applies in collision cases. The one (1) year period
starts not from the date of the collision but when the goods
should have been delivered, had the cargoes been saved.
Case: Maritime Agencies and Services Inc. vs. CA
- When there is two destination of delivery , the one year
period should commence when the last item was delivered
to the consignee
Insurance
 The insurer who is exercising its right of subrogation is also
bound by the one (1) year prescriptive period.
 However, it does not apply to the claim against the insurer
for the insurance proceeds. The claim against the insurer is
based on contract that expires in ten (10) years.
II. Recoverable Damages
 Damages – is the pecuniary compensation, recompense or
satisfaction for an injury sustained, or as otherwise
expressed, the pecuniary consequences which the law
imposes for the breach of some duty or violation of some
rights.
A. Extent of Recovery (Contractual Breach: Art. 220, NCC)
 Carrier in good faith – is liable only to pay for the damages
that are the natural and probable consequences of the
breach of the obligation and which the parties have
foreseen or could have reasonably foreseen at the time
the obligation was constituted.
 Carrier in bad faith or guilty of gross negligence – liable for
all damages, whether the same can be foreseen or not.
Those which may be reasonably attributed to the non-
performance of the obligation.
Note: The carrier who may be compelled to pay has the right of
recourse against the employee who committed the negligent, willful
or fraudulent act.
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B. Kinds of Damages
Article 2216 provides that no proof of pecuniary loss is necessary in
order that moral, nominal, temperate, liquidated or exemplary
damages, may be adjudicated. The assessment of such damages,
except liquidated ones, is left to the discretion of the court,
according to the circumstances of each case. However, proof of
pecuniary loss is necessary if actual or compensatory damages is
being claimed.
a) Actual or Compensatory Damages
- only for the pecuniary loss suffered by him as he has duly
proved
- not only the value of the loss suffered, but also that of the
profits which the oblige failed to obtain
- 2 Kinds:
1. the loss of what a person already possesses (daňo
emrgente);
2. the failure to receive as a benefit that would have
pertained to him (lucro cesante).
- It should be proven: cannot be decided based on the
consideration of the judge; not to be based on the
perception, observation and consideration of the judge
- With respect to restorative medical procedure: to be
entitled to actual damage, you need to have an EXPERT
TESTIMONY. Without such, you cannot recover.
 Damages may be recovered: Art. 2205 (Civil Code)
1) For loss or impairment of earning capacity in cases of temporary
or permanent personal injury;
2) For injury to the plaintiff’s business standing or commercial
credit.
 Damages cannot be presumed. The burden of proof rests on
the plaintiff who is claiming actual damages against the
carrier.
 In case of goods – the plaintiff is entitled to their value at the
time of destruction. The award is the sum of money which
plaintiff would have to pay in the market for identical or
essentially similar goods
 For personal injury and even death – the claimant is entitled
to all medical expenses as well as other reasonable expenses
that he incurred to treat his or her relative’s injuries.
 In case of death – the plaintiff is entitled to the amount that
he spent during the wake and funeral of the deceased. But,
expenses after the burial are not compensable.
 Read Art. 2206 (Civil Code):
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 death caused by a crime or quasi-delict
shall be at least P3,000; [The amount of fixed
damages is now P50,000.00]
 the defendant shall be liable for the
loss of the earning capacity of the deceased;
 If deceased is obliged to give support,
recipient may demand support from the person
causing the death for a period not exceeding five
years
 Spouse, legitimate and illegitimate
descendant and descendants may demand moral
damages for mental anguish by reason of the
death of the deceased
1) Loss of earning capacity
Net Earning Capacity = Life Expectancy x [Gross Annual Income
less Necessary Living Expenses]
 Life expectancy – (2/3 x 80 – age at death)
 Net earnings – based on the gross income of the victim
minus the necessary incidental living expenses which the
victim would have incurred if he were alive.
 Amount of living expenses must be established. In the
absence of proof, it is fixed at fifty (50%) of the gross income.
 Rules on loss of earning applies when the breach of the
carrier resulted in the plaintiff’s permanent incapacity.
2) Attorney’s fees
- refer to Art. 2208 of the Civil Code
- attorney’s fees may be awarded in an action for breach
of contract of carriage under par. 1,2,4,5,10 and 11 of
Art. 2208.
- If awarded exemplary, one is entitled to attorney’s fees
- 2 kinds: ordinary (compensation to the lawyer);
extraordinary (indemnity as a form of damages suffered
due to the breach of contract)
- You can be awarded if you show that you were forced to
litigate and when you are entitled to exemplary damage
- But this award is subject to the discretion of the court
(you cannot dictate – usually 10%-15%)
3) Interests
 12% per annum – if it constitutes a loan or forbearance of
money
 6% per annum – if it does not constitute loan or
forbearance of money
*405* TLD-HYC
 12% - for final judgment
Note: no interest, however, shall be adjudged on unliquidated claims
or damages except when or until the demand can be established
with reasonably certainty, the interest shall begin to run form the
time the claim is made judicially or extrajudicially.
b) Moral Damages
- Includes physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral
shock, social humiliation and similar injury.
- Though incapable of pecuniary computation, moral damages
may be recovered if they were the proximate result of the
defendant’s wrongful act or omission.
- Moral damages are not awarded to punish the defendant but
to compensate the victim
- May be recovered when there is death or there is malice or bad
faith. (in transportation of passengers)
- Refer to Art. 2219 and 2220 (enumerates cases when moral
damages may be awarded)
- Generally, no moral damages may be awarded where the
breach of contract is not malicious.
- Moral damages may be awarded if the contractual negligence is
considered gross negligence.
- Subject to three conditions in transportation law:
o Death
o Malice or bad faith (must be done in the
performance of the contract of carriage)
o Physical Injuries
c) Nominal Damages
- Refer to Art. 2221-2223 (Civil Code)
- It is adjudicated in order that the right of plaintiff may be
vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him
- The assessment of nominal damages is left to the discretion of
the court according to the circumstances of the case
- The award of nominal damages is also justified in the absence
of competent proof of the specific amounts of actual damages
suffered.
- Cannot co-exist with actual damages
- There is no loss in nominal damages, unlike in actual and
temperate damages, loss is present which is proven and not
proven but rather ascertained by the court, respectively.
Case: Japan Airlines vs. CA
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- The award of moral damages was justified because JAL
failed to make necessary arrangement to transport the
plaintiffs on the first available connecting flight to Manila.
- Only Nominal damages were awarded in the absence of
proof of actual damages
d) Temperate or Moderate Damages
Case: Air France vs. Rafael Carrascoso and CA
- The inference of bad faith is there; it may be drawn from
the facts and circumstances set forth therein. The contract
was averred to establish the relation between the parties.
- Deficiency in the complaint in stating that there was bad
faith, if any, was cured y the evidence.

- More than nominal but less than compensatory damages
- Art. 2224 provides:
 may be recovered when the court finds that some pecuniary
loss has been suffered but its amount can not, from the
nature of the case, be provided with certainty.
- cannot co-exist with actual damages
- Definite proof of pecuniary loss cannot be offered, although the
court is convinced that there has been such loss.
Case: Philippine Airlines inc. vs. CA
- Moral damages are recoverable in a breach of contract of
carriage where the air carrier thought its agents acted
fraudulently or in bad faith.
- The contract of air carriage generates a relation attended
with a public duty. Neglect or malfeasance of the carrier’s
employees naturally could give ground for an action for
damages.

e) Liquidated Damages

- Those agreed by the parties to a contract, to be paid in

case of breach thereof.
- Ordinarily, the court cannot change the amount of
liquidated damages agreed upon by the parties. However,
Art. 2227 of the Civil Code provides that liquidated
damages, whether intended as an indemnity or a penalty,
shall be equitable reduced if they were iniquitous or
unconscionable.

f) Exemplary or Corrective Damages

- Requisites for the award of exemplary damages:

1. They may be imposed by way of example in addition to
compensatory damages, and only after the claimant’s right
to them has been established.
2. They cannot be recovered as a matter of right, their
determination depending upon the amount of
compensatory damages that may be awarded to the
claimant.
3. The act must be accompanied by bad faith or done in
wanton, fraudulent, oppressive or malevolent manner.

Note: if gross negligence warrants the award of exemplary damages,

with more reason is its imposition justified when the act performed
is deliberate, malicious and tainted with bad faith. The rationale
behind exemplary or corrective damage is to provide an example or
correction fro public good.

 The award of exemplary damages in breach of contract of

carriage is subject to the provisions under Art. 2232-2235 of
the Civil Code.

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