CHAPTER V 2.

degree of diligence to be observed is not the same;

3. validity of the contracts and the stipulations separate sets of
COMMON AND PRIVATE CARRIERS public policies and legal restriction.

Codal Provisions Involved: Under the Civil Code, COMMON CARRIERS are required to exercise
extraordinary diligence. If the goods were damaged or the passengers
Articles 1732-1766, Civil Code injured, a presumption exists that the carrier was negligent, and therefore
the onus probandi (burden of proof) is on the carrier to show that it
Articles 360-379, 673-734 and 806-869, exercised extraordinary diligence and that the loss was due to exculpatory
causes mentioned in the law and not attributable to its negligence. The
Code of Commerce shipper or passenger need not prove the cause of the loss. But while
extraordinary diligence is required of common carriers it does not
Sections 1-4 Carriage of Goods by Sea Act (COGSA) mean that they are absolute insurers of the goods or passengers.

A.) Distinctions between Common and Private Carriers **COMMON CARRIERS:

B.) Applicability of Civil Code, Code of Commerce, COGSA and Special Laws
C.) Immunities of the Carrier under various laws
D.) Stipulations limiting Carrier's liability
E.) Applicable law of Country of Destination
1. Requires EXTRAORDINARY DILIGENCE;
- goods were damaged or the passengers injured, a presumption
exists that the carrier was negligent
2. Burden of Proof lies with the CARRIER.
3. shipper or passenger need not prove the cause of the loss
4. while extraordinary diligence is required of common carriers it does
not mean that they are absolute insurers of the goods or
passengers.

F.) Passengers in Sea Voyage

COMMON CARRIERS PRIVATE CARRIERS
F.) Damages suffered by Cargo and Passengers Requires EXTRAORDINARY Requires DUE DILIGENCE
DILIGENCE
Burden of Proof: Carrier
A) Distinctions between Common and Private Carriers *** regular business is to carry *** Isolated Transaction, of Past of
passengers or property for all Business
In the Philippines, it is necessary to classify carriers because the rights and persons who may choose to
obligations of common and private carriers are governed by distinct and employ and remunerate him
different laws.

The degree of diligence set by law to be observed by common carriers and
private carriers in the carriage of goods or passengers is not the same and
the validity of the contracts and the stipulations ______________ separate
sets of public policies and legal restriction.
** It is important to classify carries because COMMON AND PRIVATE
CARRIERS are:
1. governed by different laws;
On the other hand, PRIVATE CARRIERS are required to observe only due
diligence which requires ordinary fault or culpa levis in order that a person
might become liable.
**PRIVATE CARRIERS:
1. required to observe only due diligence.
- ordinary fault or culpa levis might held a person liable.

In Home Insurance Co. v. American Steamship Agencies, it was held
that the provisions of our Civil Code on common carriers which were taken
from Anglo-American law, should not apply where the common carrier is not
acting as such but as a private carrier.
Under American jurisprudence, a common carrier undertaking to carry a
special cargo or chartered to a special person is a private carrier. As a private
carrier, a stipulation exempting the owner from liability for the negligence of
its agent is not against public policy; and is deemed valid.
Such a stipulation would be void only if the strict public policy has no force
where the public at large is not involved, as in the case of a ship totally
chartered for the use of the single party. 5
However, in most maritime nations today, the respective rights and duties of
the shipper and the carrier depend not on whether the carriage is public or
private, but whether the contract of carriage is a bill of lading or equivalent
shipping document on the one hand, or a charter party or similar contract on
the other. As a general rule, the principle of freedom of contracts
governs the relationship between the parties.
Recently in Phil-Am Gen. Co. v. PKS Shipping Co. it was held that "much
of 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 an isolated transaction, not a part of the business or
occupation, and the carrier does not hoid itself out to carry the goods for the
general public or to a limited clientele, although involving the carriage of
goods for a fee, the person or corporation providing such service could very
well be just a private carrier."
And a typical case (of carrier becoming private) is that of a charter party
which includes both the vessel and its ccew, such as in a bareboat or
demise, where the charterer obtains the use and service of all or some part
of a ship for a period of time or a voyage or voyages and gets the control of
the vessel and its crew. The Civil Code? defines common carriers as follows:
ARTICLE 1732. Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, air, for compensation,
offering their services to the public.
** Common Carriers: natural or juridical persons; transporting
passengers, goods, or both for compensation, offering their services
to the public.
This destination of common carrier had been extended and applied to
every common carrier (land, air, or water). The scope of this distinction
should be considered in the jurisprudence before and after the effectivity of
the Civil Code.
In the case of U.S. v. Quinajon, et.al, the Supreme Court by way of obiter
dictum, stated that "a common carrier is a person or corporation whose
regular business is to carry passengers or property for all persons who
may choose to employ and remunerate him."
In Mendoza v. PAL, the Supreme Court held that PAL is a common
carrier and that the rules governing common carrier by airship may
be applied to other common carriers. The court quoted the following from
American Jurisprudence:
When Aircraft Operator is Common Carrier.—That aircraft and
the industry of carriage by aircraft are new, is no reason why one in
fact employing aircraft as common carrier vehicles should not be
classified as a common carrier and charged with liability as such.
There can be no doubt, under the general law of common carriers,
that those air lines and aircraft owners engaged in the passenger
service on regular schedules on definite routes, who solicit the
patronage of the travelling public, advertise schedules for routes,
times of leaving, and rates of fare, and made the usual stipulation as
to baggage are common carriers by air. .A flying service company
which, according to its printed advertising, will take anyone
anywhere at any time, though not operating on regular routes or
schedules, and basing its charges not on number of passengers, but
on the operating cost of the plane per mile, has been held to be a
common carrier. It is not necessary', in order to make one carrying
passengers by aircraft a common carrier of passengers that the
passengers be carried from one point to an- other; the status and
the liability as a common carrier may exist notwithstanding the
passenger's ticket issued by an airplane carrier of passengers for hire
contains a statement that it is not a common carrier, etc., or a
stipulation that it is to be held only for its proven negligence.
But an airplane owner cannot be classed as a common carrier of
passengers unless he undertakes for hire, to all persons who apply
 for passage indiscriminately as long as there is room and no legal
excuse for refusing.
The rules governing the business of common carrier by airship or
flying machine may be readily assimilated to those applied to other
common carriers.
The test of whether one is a common carrier by air is whether he
holds out that he will carry for hire, so long as he has room, goods
of everyone bringing goods to him for carriage, not whether he is
can-ying as a public employment or whether he carries to a fixed
place.13
It should be noted that the Civil Code was already in force when said
decision was promulgated in 1952. The said Code took effect on August 30,
1950.
in 1961, the Court of Appeals in holding that the defendant n the case of
Lastimoso, et al. v. Doliente is not a common carrier and not therefore
bound to observe extraordinary diligence rendered the following opinion:
"The New Civil Code (Article 1732) defines common carriers as
"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.
The TRUE TEST is whether the given undertaking is a part of
the business engaged in by the carrier, which he has held out
to the general public as his occupation, rather than the quantity
or extent of the business actually transacted, or the number and
character of the conveyances used in the employment or whether he
has held out that he will, so long as he has room, carry for hire the
goods of every person who brings goods to him to be carried.
**True Test to determine whether one is a common carrier:
 undertaking is a part of the business engaged
has held out to the general public as his
occupation
With respect to the persons served, in view of the requirements that the
holding out must be to serve the public generally, one performing
transportation service for particular customers at prices fixed in each case by
specific contract, for a particular group or class of persons under a special
contractual arrangement or for a particular persons only, it is not a common
carrier.
The test by which it is determined whether a party is a common
carrier of goods is:
(1) He must be engaged in the business of carrying goods for others
as a public employment, and must hold himself out as ready to
engage in the transportation of goods for persons generally as a
business, and not as a casual occupation.
(2) He must undertake to carry goods of the kind to which his
business is confined,
(3) He must undertake to carry by the methods by which his
business is conducted, and over his established roads.
(4) The transportation must be for hire.
The distinctive characteristics of a common carrier are those stated
in the first test set out above, viz.: That he holds himself out as
ready to engage in the transportation of goods or hire as a public
employment, and not as a casual occupation, an t at ne un erta .es
to carry for within the limits of his capacity and the sphere the
business required of him, so that he is bound to serve all who apply.
and is liable for refusal without sufficient reason, to do so. In
general, the liability of carrier does not attach to one that does not
out as pursutng that bustness. but the ular case, and jn each
patttcular case, acts only consequence of a special employment. The
law applicable to common carriers IS peculiarly rigorous, and it
ought not to be extended to persons who have neither expressly
assumed that character nor by their conduct and from the natule of
their business justified the belief on the patt of thc s. la: they
intended to assume it.
On the basis of the foregoing decision it is clear that the most significant
characteristic that distinguishes a common carrier from a private
carrier is the former's compulsory obligation to accept employment from the
public which it must serve indifferently. The Supreme Court had consistently
maintained this characteristic as determinative in deciding whether a person
or corporation is a common or private carrier.
**Distinction of Common Carrier vs Private Carrier
- Common Carrier’s compulsory obligation to accept employment
from public which it must serve indifferently.
Mr. Monroe. 19 in his work on Carriers, says:
According to all the authorities, the essential characteristics of the common
carrier are that he holds himself out as such to the world' that he undertakes
generally, and for all persons indifferently, to carry goods and deliver them,
for hire; and that his public professions of his employment is to be such that,
if he refuse, without some just ground to carry goods for any one, in the
course of misemployment and for a reasonable and customary price, he will
be liable to an action.
In the United States, a ship chartered for a special cargo or to special person
is not a common carrier, but merely an ordinary huge bailee; but it' a part of
a vessel is available to the public, although the other portion is taken by
cargo shipped under special the is still a common carrier
Article 1732, of The Civil Code in relation to Sec. 13(b), Public Ser. vice Act
makes no distinction between one whose business principal activity
is the carrying of persons or goods or both, one who does such
carrying only ay an ancillary activitv (in local idiom, as 'a sideline').
** There is NO DISTINCTION on the following:
1. between business is being exercised PRIMARILY (MAIN) or
ANCILLARY (Sideline) ;
2. person or enterprises offering transportation services
(REGULAR/SCHEDULED BASIS) vs OCCASIONAL, EPISODIC
or UNSCHEDULED BASIS.;
3. General Public vs a Narrow Segment of the general
population
Article 1732 also carefully avoids making any distinction between a person or
enterprises offering transportation service on a regular or
scheduled basis and one offering such service on an occasional,
episodic or unscheduled basis. Neither does Article 1732 distinguish
between a carrier offering its services to the "general public" i.e., the
general community or population, and one who offers services or solicits
business only from a narrow segment of the general population.
What is a PRIVATE CARRIER?
It may be defined as a carrier which is not a common carrier. There is no
provision of law which defines a private carrier. The Civil Code defines a
common carrier but not a private carrier. By way of exclusion, it may be
stated that a carrier that does not fall within the definition of a
common carrier under Art. 1732 of the Civil Code is a private
carrier. This must be so because a carrier which is not a common carrier will
inevitably and necessarily be a private carrier. it cannot be anything else.
** Private Carrier – a carrier which does not fall within the definition
of a common carrier under Art. 1732 of the Civil Code**
From the decision cited in order that one may be considered as a common
carrier he must be under obligation to carry indiscriminately for any
person as a consequence of his having held out to the public that he
is ready and willing to carry for anyone for as long as there is room
or space. The common camer is for any person because has adopted the of
carnage not only as a public employment but had committed itself in offering
its services to carry for anyone who avails of its services
Upon the other hand, one who is not obliged to carry for the public
cannot be considered as a common carrier but as a private carrier. Is it
not that a private carrier also offers its services to the public? In a way, yes,
But not in the same manner as the common carrier. Any enterprise that
renders service in order to do business naturally offers its services to the
public. However, in the case of private carriers in offering services, they do
not commit themselves to serve all indiscriminately but only informs the
public that it may enter into a contract with any person who would want to
have his goods transported and may upon such contract be bound to carry.
Generally, private carriage is undertaken by special agreement and the to
carry goods for general public. The most typical, although not the only form
of private carriage, is the CHARTER PARTY, a maritime contract by which
the charterer, a party other than the ship-owner, obtains the use and service
of all or some part of a ship for a period of time or a voyage or voyages.
 A charter party (sometimes charter-party) is a maritime contract between
a ship-owner and a "charterer" for the hire of either a ship for the carriage of
passengers or cargo, or a yacht for pleasure purposes.
The G. R. Crowe, a case decided in the Circuit Court of Appeals, Second
Circuit of the U.S.A. on December 3, 1923 is cited hy the Philippine Supreme
Court mainly to support its decision in the case of Hdme Insurance Co. In the
said case of the G. R. Crowe, the Court was confronted with the issue of
whether or not Sections I and 2 of the Harter Act is bpplicable to the carrier
defendant. The Court ruled that Sections 1 and 2 of Harter Act manifestly
refer to common carriers and consequently not applicable to the carrier-
defendant tvho acted as a private carrier in the carriage of libelant's cargo.
Quoting from The Fri, z the Court said
"In the case, however, a common carrier was party to the contract. When a
charter a gives charterer the full capacity of the ship, the owner is not a
common carrier. but a bailee to transpöft as aRte carrier for hire. x x x It has
not yet been decided by any court that a condition in such a contract, to
which tho Harter Act has no application, relieving a shipowner from liability
on account of the carelessness of its ernployees, is contrary' to public policy.
" and it ought not to be extended to a person who has neither expressly
Thus, in the Wildenfels24 it was held that a lighter hired exclu. sively to
convey the goods of one person to a particular place an agreed
compensation is not a common carrier. The reasoned that though her owner
was in lighterage business was in the habit of taking goods for who wanted
lighter. age done, she had, however, no regular route; did not between well
known termini, and, or, t e occasion in question, was engaged to carry, and
had on board only, the jute of libellant She was not a general ship, but was
employed for this business exclusively, no one else had a right to put a
pound of freight aboard her. She became a private carrier and liable only as
a bailee for hire. Her owner was under no legal obligation to carry' this jute,
he could have refused this and all other cargoes had he seen fit to do so and
no liabilitv would have attached to his refusal
And insymmerw. Caswel,25 it was held_that a ship hired for a ?äecific
voyage.. to carry a particular cargo for the charterers.
not a common carrier but a bailee for hire and bound to exerci:é only
ordinary skill and care.
Hence. a ship chartered for a special cargo or special to a person is not a
common carrier, but merely an ordinary if the part of the vessel is available
to the ubhc, although the other portion is taken up by cargo shipped under
special charter the owner is still a
Also in Liverpool and Great Western Steam Company u.
•e7 it was held that a common carrier may become a private phoenicarrier,
or a bailee for hire, when, as a matter of accommodation or special
engagement he undertakes to carry something-whichüis not his carry. But
when a carrier has a regularly established business for carrying all or certain
articles, and espeClally if that carrier is a corporation created for the purpose
of the canying trade, and the carriage of the articles is embraced within the
some scope of its chartered powers, it is a common carrier and a special
contract about its responsibility does not divert it of that character.
Law on Common Carrier not applicable to Private carriers
** Private Carriers will not be governed by the law on common
carrier**
As aforestated, the law applicable to common carriers is peculiarly rigorous,
assumed that character nor by his conduct and from the nature of his
business justified the belief on the part of the public that he intended to
assume it. Even a common carrier is exempt from the application of the strict
public policy governing common carriers where it does not act as such but as
a private carrier, as it charters its vessel totally for use of a s:ngle party or a
siecial person only.- In such a case the policy dosés Its force for the public at
large is not involved.
gush and It b!azed into proportions beyond human futcjng the crew and the
passengers to tump into the sea, in the death of a passenger, the owner of
the vessel who common carrier is not civilly liable in damages for such death
In the absence of proof of negligence on the part of the crew the
management and operation of the vessel at the time of the acti dent-n
Thus, in Lastimoso v. Doliente, k at about 8 p.m., MV DD. liente sailed
from Maricaban, Zamboanga and at about 10 p m that same evening, when
the vessel cruising along the coast of Zamboanga City, a fire broke out in the
engine room which neither the crew nor the passengers could extinguish,
When the fire blazed to proportions beyond human control, the crew and
passengers jumped into the sea and v.ere picked up by another vessel
owned by Mr. Falcasantos, which vessel was at the time being towed by M/V
Doliente- As a result of the fire, Pablo Lash. moso, husband of the plaintiff,
perished. There is no evidence that defendant Doliente was previously
engaged in the business of transporting passengers or goods or both for
profit, or that he ever offered his services to the public. The ill-fated trip of
M/V Doliente was a trial run. The particular voyage was in the nature of a
chartered ship for Valeriano Marcos loaded on the vessel rice belonging to
third persons. Doljente had no contract whatsoever With the owners of the
nce, HIS was With Valeriano Marcos only
The Court held that the defendant Dohente was not a common carrier at the
time of the hapless Occunence. It was therefore not required by law to
exercise extraordinary diligence in the vigilance over the goods and safety of
the passengers aboard the MV L)oliente during the trip in question, nor was
he bound to the passengers safely as far as human foresight can provide
Common Carrier acting as Private carrier is Responsible in Latter
Capacity
** When a vessel is a common carrier and eventually becomes a
private carrier, then it will be obliged to perform its contract as a
PRIVATE CARRIER capacity.
Where a vessel is a contract of affreightment with the common carrier lete
undertakinca acity carry a spesuch Commoh becomes a privatc carrier and
will be obliged to perform its contract only in the latter's capacity. This is the
dictum in the case of Home Insurance Co. v. American Steamship Agencies,
inc. 34 The Supreme Court relied upon American jurisprudence to support its
decision in the said case on the basis of its finding that the Civil Code
provisions on common carriers were taken from Anglo-American law.
B) Applicabilitv of Civil Code, Code of Commerce, COGSA and
Special Laws On Carriage of Goods
Under our present state of law, the carriage of goods by water is governed
by the Civil Code, (Arts. 1732-1766), Code of Commerce (Ans. 350-379, 673-
734; 806-869), the Carriage of Good by Sea Act (COGSA) 35 and other
Special Laws (Public Service Laws, Land Transportation, and Tariff and
Customs Laws Act, etc. )
**Carriage of Goods by Water = Civil Code, Code of Commerce and
Carriage of Good by Sea Act and other Special Laws.
Insofar as common carriage under a domestic bill of lading other similar
contract is concerned, there is no question that the Civil Code provisions on
common carrier apply and that the Code of Commerce and COGSA have only
a suppletory application.
**common carriage under a domestic bill of lading = Civil Code**
Interestingly, a number of authorities opine that the Civil Code govern
without qualification the carriage of goods by water both in coastwise and in
foreign trade or to vessels from abroad entering the Philippines.06 While the
Civil Code and the Code of Commerce should be applied to all common
carriage in domestic trade, a line should be drawn, however. with respect to
common carriage of goods under a bill of lading to or fiom Philippine ports
foreign trade.
Note that art. 1753 of the Civil Code provides that the law of the counåy to
which the goods are to be transported shall govern the liability ot the
common carrier, which in most maritime nations is the Hague Rules or
COGSA. However, the Civil Code and Code of Commerce left the door open
as to what law is to be applied with respect to carriage of goods under a bill
of lading coming into the Philippines where the vessel is engaged in foreign
trade.
The Philippine COGSA is the same as the U.S. COGSA, the latter having been
incorporated as part of Philippine law in toto. And the primordial purpose of
the COGSA is to bring about uniformity in ocean bills of lading and give effect
to the Brussels Treaty. 37 The Philippines then considered that COGSA
contained advanced legislation, which is consonance with modern maritime
rules and the practices cf the shipping countries of the world. 3S In order,
therefore, that Philippine laws on shipping will be attuned to the rest of the
international community, the U.S
COGSA was adopted through Commonwealth Act No. 65 approved on April
22, 1936, wherein it was provided that the ;.ovisions of the U.S. COGSA are
"hereby accepted to be made applicable to all contracts for the carriage of
goods by sea to and from the Philippine ports in foreign trade x x x"
Otherwise, stated, COGSA has application only to transportation in foreign
trade. If a transaction, like the transportation in foreign trade, is covered by
the COGSA, such law will be applied because it is a special law its provisions
must of necessity-limit or
Thus; in Chua Kuy v. Everett Steamship Corp. 40 it was held that
contracts for the carriage of goods by' sea to and from Philippine ports in
foreign trade are governed not by the Code of Commerce but by COGSA.
However, our Supreme Court in American President Lines, Ltd. v.
Klepper41 held that the Civii Code should govern liability of shipowners in
case of loss, destruction, or deterioration of goods coming into the
Philippines in foreign trade. Such law as applied by the Supreme Court
breeds I-incertain_iy in the shipping industry, particularly in the carriage of
goods in foreign trade. If the Civil Code will govern liability of shipowners
with respect to carriage of 9; goods into the Philippines and the Hague Rules
or COCSA should apply to cargo bound to foreign port, shipowners engaged
in foreign trade would then be subjected to two standards ;
For instance, if the damage to the cargo covered by a Will of lading occurred
while vessel is destined to foreign port, COGSA or the Hague Rules would be
applicable and in most cases, the camer would only be subjected to the
standard of due diligence. if the damage the cargo occurred while the vessel
engaged : k foreign trade is bound for the Philippines, a stricter standard of
Accordingly, article 175343 and article 176644 of the Civil code and the Code
of Commerce provisions should be limited in their application to domestic
carriage of goods by water.4S  (5) Order or act of competent public
As to private carriers, they are governed by the Code of commerce if the
transportation of merchandise is commercial as defined in article 34946 of
the Code of Commerce. A private carrier, or so-called contract carrier, has
been less regulated, leaving the parties somewhat more free to work out
their arrangement in their individual contract.
While the Civil Code is limited in its application to common carriers and
COGSA applied only to foeiqn parties fo a private carriage may agreé 'to
apply CöGSA or Civil Code. in such a situation, the Civil Code and COGSA do
not apply "ex proprio wigore Thus, their provisions are mostly terms of the
contract of carriage, which, like any other contractual terms, call out for
judicial interpretation in case of dispute'9 Therefore, when the provisions of
the Civil Code and COGSA do not apply of their own force but are
incorporated into :nontjme' contract by reference, thev (10 not have "statute
rother, they are merely part of the cont: act, a torm like anv other
Thc Diligence required under the Civil Code, COGSA and the Code of
Commerce:
1. Civil Code'
ARTICLE 1733. Comrnon 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 ihe 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.
AUTICLE 1734. •Cornrnon carriers are responsible for the loss, destruction
or deterioration of the goods, unless the same is due to any of the following
causes only; (FLEDS-FAACO)
(1) Flood, storm, earthquake, lightning, or othei 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;
character of the goods or defects eo.„rie«packing or in the containers;
ARTICLE 1735. In all cases than those mentioned in Nos. 1, 2, 3, 4, and 5
of the preceding article, if the goods are lost, destroyed or deteriorated,
common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence
as required in Article 1733.
ARTICLE 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 Joss, 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 farpily, or of a man of ordinary prudenceän the-
vigilance over the movables transported;
(5) That the common carrier shall not be responsible for the acts or
omissions oi 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, ve
hicle, ship, airplane or other equip. ment used in the contract of carriage.
The most important change made by the Civil Code in the law of common
carrier is the requirement that they should exercise extraordinary diligence.
According to the Code Commission, the provisions on common carriers were
adopted from Anglo_ American law.
However, the code does not define extraordinary diligence. Diligence or
diligentiæis inseparably associated with negligence or culpa. Thus, article
1173 of the Civil Code provides that the "fault or negligence of the obligor
consists in the omission of that diligence which is required by the nature of
the obligation and corresponds with circumstances of the persons, of the
time and of the place. If the law or contract does not state the diligence
which is to be observed in the pelforrnance, that which is expected of a good
father of family shall be required.
And in civil law, there are THREE DEGREES OF DILIGENCE:
1. DILIGENTIA OR ORDINARY DILIGENCE, which requires
ordinary fault or culpa levis in order that a person might become
liable;
2. EXTRAORDINARY DILIGENCE or exactissima diligentia, which
requires only slight negligence or culpa levisima, in order that
a person might become liable; and
3. SLIGHT DILIGENCE or levissima diligentia. which requires gross
fault cr lata culpa in order to make one liable.
The nature of the business of common carriers and the exigencies of public
policy demand that they observe extraordinary Common carriers is
Impressed with a public trust of necessity rely on the care and skill of
common carriers in the vigilance over the goods and the safety of the
passengers, specially because with the modern development of science and
invention, transportation has become more rapidi more complicated and
somehow more hazardous so the public is forced to trust all the more in the
utmost diligence and foresight of common carriers, whether by land, sea, or
air.
Under articles 1733 and 1734 of the Civil Code, common carriers
are bound to observe extraordinary diligence in the vigilance over
the goods and for the safety of passengers transported by them.
They are responsible for the loss, destruction or deterioration of the goods
carried by them. This liability is contractual in nature. And the failure to use
extraordinary diligence in carrying goods or passengers is a breach of
contract and constitutes culpa contractual not culpa aquiliana. A common
carrier is liable not only for negligence but even where the cause of
the loss or damage is unknown.
Generally speaking under article 1735, if the goods are proved to have
b lost, destroyed or deteriorated, common carriers are resumed o
have been at fault or to have acted negligently, unless they prove that
they have observed the extraordinary diligence required by law. The burden
of the plaintiff, therefore, is to prove merely that the goods he
transported have been lost or damaged. Thereafter, the burden is
shifted to the carrier to prove that he has exercised. the extraordinary
diligence required by law.[Thus, it .has been held that the mere proof of
Olivew of goods in good order to a carner, and of their arrival at of
destination in bad order, makes out uainst fhe carrier, so that if no
explanation is given as o ow the injury occurred, the carrier must be held
responsible. incumthe to prove that li due to other  With its liability
Where' the has foiled to coco fortuttr„ presumption by law Of fault or
necyllqvnc€.' on part of the applies; Mid tho carrier must present evidence
that it the extnnocclinarv diligence requjrecl by article 1733 of the Code
Older to escape liobility for damage or destruction to that It had admittedly
carried, In the absence of evidence, the carrier cannot escape li;ooility
The exercise of extraordinary diligence means that they must
render service with the greatest skill and utmost foresight. To
comply with this weighty obligation, it is only meet and proper cartoejs
should be afforded the ('f having a wide discretion In the selection and
supervision of pc•rsons who will handle the goods. Courts cannot withheld
from the carriers this right without committing grave injustice:"
This extraordinary diligence mandated by Article 1733 must be observed in
the transportation of goods as well as of passengers. This represents an
exception to the rule of ordinary diligence or the diligence of a good father of
a family? Stipulations limiting the liability of ccnnmon carriers with regard to
the goods, subject to the requirements stated in article 1744, are permitted.
If the owner or shipper freely consents to such limitation and under the
conditions specified in said article, the stipulation is valid. hlowevert for
obvipus reasons no stipulation is allowed which' would lessen the common
carrier's responsibility for the safety Of the passengers.
2. COOSA: 'v
Sec. 3. (1) The carrier shall be bound be fore and at the beginning of the
voyage to exercise due diligence to—
Make the ship seaworthy;
Properly man, equip, and supply the ship;
Make the holds, refrigerating and cooling chambers, and all other parts of
the ship in which goods are carried,: fit and safe for their reception; carriage,
and preservation.
COGSA requires the owner of a vessel to exercise "due diligence" to make
the vessel "seaworthy." The term due diligence may be defined as not
merely a praiseworthy or sincere, though unsuccessful effort, but such an
intelligent-and éf_fiö.léh€at.tempt as shall make it so (seaworthy) as far'
as-'difigérqcezcån senve. 61 It means doing everything reasonablé, not
possible. The term is practically synonymous with reasonable or ordinary
care.62 In the Muncaster CastleC3 the term due diligence has been
negatively defined by stating that the shipowner is not responsible for
damages caused by an unseaworthysondition, if such condition is the result
of a latent defect; latent defect is then defined as a defect thal js not
discoverable in the exercise of due diljgence. Ir
The question of what constitutes due diliaence is of course a
Pure question of fact. Typical examples of acts and omissions Which have
been held to constitute a lack of due diligence to vessel seaworthy include
failure to make a hydrostatic test after repairs to revits, overloading a vessel,
leaving heaters uncovered failure to test a vessel's telemotor steering gear,
failure to tanks tight, and negligent stowage, if it creates an unseawonh
Tl le duty to•Luse due diligence under COGSA is limited b Sec. 3(1)
to*'before and at the beginning of the voyage."65 the carrier is required,
before the commencement of any voyage to exercise "due diligence to make
the vessel seaworthy. This encompasses the duty to properly man, equip,
and supply the ship. This duty extends to making the holds, refrigerating and
cooling char:nbers, and all other parts of the ship in which goods are carried,
fit and safe for their reception, carriage and preserva. tion. Whenever loss or
damage to cargo has resulted trom unsea_ worthiness, the burden of
proving the exercise of "due diligence" is on the carrier. And neither the
carrier nor the ship shall be liable for loss or damage arising from
unseaworthiness, unless caused by want of "due diligence" on the part of the
carrier to make the ship seaworthy. 66
3. CODE OF COMMERCEi'0rdihary
ARTICLE 362. Nevertheless, the carrier shall be liable for the losses and
damages resulting from the causes mentioned in the preceding article if it is
proved, as against him, that they arose through his egligence or by reason of
his havingffailed to take lie-njiecautiora which usage has established
persons, unless the shipper has committed fraud in the bill Of lading,
representing the goods to be of a kind or quality different from what they
really were.
As mentioned earlier, when the contract of carriage of goods iS private, the
provisions of the Code of Commerce apply unless
the parties agree on Civil Code or COGSA coverage. Take note that Art. 361
of the Code of Comrnerce is modified by the provisions of the Civil Code
when applied to common carrier and COGSA in cases of transportation of
goods by water in foreign trade.
However, when the contract for transportation of goods by water is private,
Art. 361 of the Code of Commerce is still a good law and private carrier
would be exonerated from liability for damages to goods caused by
fortuitous events, force majeure and/or by the nature or inherent defect of
the goods.
The Supreme Court in Standard Vacuum Oil v. Luzon Stevedoring 120
judicially construed the phrase "merchandise shall be transported at the. risk
and venture of the shipper" in Alt. 361 of the Code of Con$merce to mean
that when the goods are delivered on board a ship in good order and
condition, and the shipowner delivers them to the shipper in bad order and
condition, it then devolves upon the shipowrjer to both allege and prove that
the goods were damaged by reason of some facts which legally exempts him
from liability.
Burden of Proof
1. Burden of Proof: Civil Code
ARTICLE 1735. In all cases other than those mentioned in Nos. 1, 2, 3 4, 5
of the preceding article, if the goods are lost, destroyed or deteriorated,
common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence as
required in Article 1733.
In all cases other than the five enumerated in article common are but
presumed they may to overcome hawe been the at fault presumptionor to
acted negligently proof of extraordinary diligence.  A bill of lading is prima facie evidence that the carrier received the
Therefore, the mere proof of goods in good to nier, and of their arrival at the
place of destination in bad order, makes out a prima facie case against the
carrier so that if no explanation is given as to how the injury occurred, the
carrier must be held responsible. It is incumbent upon the carrier to prove
that the loss was due to accident 123 or some other circumstances
inconsistent with its liability.  Once the shipper has presented a prima facie case, the carrier then has the
However, even if the loss. damage or injury may have been caused by one
of the excepted causes, still the carrier will be responsible if the injury might
have been avoided by the exercise
oTFéäsGlAGle skill and attention on thé part of the persons em. ployed in the
conveyance of the goods. But the onus probandi then becomes shifted upon
the shipper, to show the negligence.124 No ier arises in the five cases
mentioned in article 1734 the new Civil Code.
2. Burden of Proof : Code of Commerce = CARRIER
Under article 361 a private carrier, in order to free itself from liability, is
obliged to show that the damages suffered by the goods carried are
by reason of fortuitous event, force majeure, or the inherent nature
and defect of the goods.. The onus probandi is UPON THE CARRIER
that the was occasioned by one of the excepted hold the causes. carrier
However, liable, is the obliged shipper to prove under that article the 362.
damages in order to the goods occurred on account of the carrier's
negligence. 126
The burden of proof required under article 362 of the Code of commerce
seems to be in consonance with the provisions of 1735 of the Civil
Code. under which carrier is presumed to have been at fault or to have
acted negligently. However, article
.362 requires only ordinary diligence from a private carrier. I
3. Burden of Proof: COGSA = SHIPPER
Under COGSA, to establish a prima facie case of liability against the carriér,
the shipper has the burden of proving that the was received by the
carrier in good condition and the cargo has damaged upon delivery by the
carrier at its destination. 128
goods as described -therein and creates a rebuttable presumption
that the goods were delivered to the carrier in good condition.
Hence, the shipper's prima facie case regarding receipt by the carrier in good
condition is satisfied by the introduction into evidence of the "clean" bill of
lading, cne without any exceptions.
burden of proving, that it exercised due diligence to prevent the damage so
that the loss was occasioned by one of the excepted causes. Further, once
the shipper has presented its prima facie case, the carrier, if unable to rebut
the shipper's position, will be liable for the 132 entire damage for damage is
not undev one of the exceptions.
The carrier bears this heavy burden because of its legal responsibility to
exercise due diligence to make the ship seaworthy to properly man, equip
and supply the ship and to make all parts of the ship in which the goods are
carried fit and safe for the reception, carriage and preservation of the goods.
If the camer is able to rebut the shipper's prima facie case by availing itself
of one of the exception, the burden then returns to the shipper. The shipper
must then show that there were, at least, concumng 'causes of loss in the
fault and negligence of the carrier.
If the shipper is able to show such negligence, the burden rebounds to the
carrier who then has the difficult task of proving the portion of the loss
caused by the negligence and the portion caused by the exception. Failure to
differentiate such damage results in full liability for the loss against the
carrier.
Duration of Carrier's Duty:
1. Civil Code,
unconditionally plated iruogession by canor to r fratuportafiåh
ARTICLE 1736. The extraordinary responsibility of the common carrier lasts
from the time the goods are unconditional laced in the possessions of, and
received by the carrier for trans until the same are delivered, actually or
constructivel consignee, or to the person who has a to receive them without
prejudice to the rovisions of Article
ARTICLE 1737. The common carrier's duty to observe extraordinary
diligence in the vigilance over the goods remains in full force and effect even
when they are temporarily unloaded or store has made use of the right
of stoppage_in_transitu.
ARTICLE 1738. The extraordinary liability of the common carrier continues
to be operative even during the time the goods are stored in a warehouse of
the carrier at the place off destination until the consignee has been advised
of the arrival of the goods and had reasonable opportunity thereafter,
otherwise, dispose of them.
  
For cargo to be transported, it must be delivered to the cartier. Until it is
received by the coniignee•, the carrier who has it in his possession is 'obliged
to preservg and guard it. It is thus but natural and logical that he should be
responsible for it '33 The carrier's obligation to exercise extraordinary
diligence as specifi-
Provided in the above articles commences from the time the goods are
placed unconditionally in the possession of, and rekhe-carrier and lasts until
the goods are delivered to the onsignee or to the person entitled to receive
ithem.136 delivery may either be actual or constructive. 137
This extraordinary responsibility of the carrier continues dur. ing the time
that the goods are temporarily unloaded or stored in transit.138 And even
after the goods have reached their port of destination, when, after being
landed, they are stored in the warehouse of the carrier, the carrier's
obligation subsists until the consignee has been advised of their arrival and
given a reasonable opportunity to remove them. 139 Such notice of
arrival constitutes constructive delivery which automatically releases the
carrier of extraordinary responsibility. 140
A similar povision is found in Article 355 of the Code of Commerce which
states that "the liability of the carrier shall begin from the moment he
receives the merchandise, personally or through a person charged for the
purpose at the place indicated for their reception. "
As discussed above the carrier's responsibility for the loss, destruction, or
deterioration of goods, lasts only while the same are in its possession, and
not after it has lost control of them. While delivery of the cargo to the
customs authorities is not deiivery to
the consignee, "or to the person who has a right to receive them•"
contemplated in this Article, because in such case the goods are still in the
hands of the Government and the owner cannot cise dominion over them,
the parties may-agree-te-limit-the liability of the carrier, consiéering that
-che goods still have to go through Inspection of the customs authorities
before they are wrned over to the consignee. This is a situation where the
Ioscssoptrol of the goods because of customs regulations, and it unfair that
it be made Fesponsible for what may happen during the interregnum.
In fact, delivery to arrastre operators or cargo-handlers opera. has the effect
Of a constructive delivery to the consignee because the carrier has no choice
or option if it were to unload the cargo at the point of destination but to
delivpr the same to the anastre or cargo handler operator where the customs
or govern. ment authority has contracted with such operators.
However. in Fireman 's Fund Ins. Co. v. Comp. Gen. De Tabacos de Filipinas,
i 42 it was held that a consignee may sue the carrier, for the loss of a
shipment, notwithstanding the fact that the cargo receipt shows that the
carrier delivered the shipment to the arrastre contractor, which, however,
denies that it received the cargo. The consignee is not bound to assume that
the cargo receipt is genuine.
Obviously, if the arrastre operator admits receipt or the carrier proves_
delivery to the arrastre, the carrier should be automatically released from its
extraordinary responsibility.
In Cia. Maritima v. Ins. Co. of IVorth America,143 the loss o, the hemp
occun-recl when the hemp was loaded on a barge or lighter owned by the
carrier which was loaned free of charge to the shipper. The barge or lighter
with the hemp sank while awaiting the arrival of S/S Bowline Knot belonging
to Maritima on which the hemp was to be loaded for shipment to Manila. No
bill of f was issued although the Patron of the lighter signed the receipt
covering the hemp.
The Court held the fact that the carrier sent its lighter free of cha•ge to take
the hemp from Mcleod's private' wharf preparatory to its loading on S/S
Bowline Knot does not in any way impair th contract of carriage already
entered into between the carrier the shipper, for that preparatory step is but
arcel of contuuet. The lightersÄEFfiéGlT7Öloyed as the first step of th
voyage, but once that step was taken aryl the hemp delivered to the
can•ier's employees, the rights and obligations of the parties attached
thereby, subject to the principles and usages of the maritime laws. In other
words, here we have a complete contract of carriage the consummation of
which has already began. The slepper delivering the cargo to the carrier and
the latter taking possession thereof by placing it in a lighter manned by its
author. ized employees, under which Mcleod became entitled to the privilege
secured to him by law for its safe transportation and delivery and the carrier
to the payment of its freight upon comple. tion of the voyage. The liability
and responsibility of the carrier under a contract for the carriage of goods
commence on their actual delivery to, or receipt by, the carrier or an
authorized agent. A bill of lading is not indispensable for the creation of a
contract of carriage.  moment they receive the merchandise, personally or through a person
Further, the extraordinary responsibility of the carrier does not terminate
even if the goods being transported are stored in the warehouse of the
carrier at the place of destination. If the cargo or goods reaching their
destination are stored in the warehouse of the carrier: the latter's
extraordinary responsibility continues until the consignee has been advised
of their arrival and given a reasonable opportunity to remove them. As held
in Jui Pat v. Dollar Steamship)44 the contract of the carrier endures from
shipment Of the cargo until their arrival at their destination until they are
ready to be delivered at the usual place of delivery, and the owner or
consignee has a reasonable opportunity, during the hours when such goods
are usually delivered there. of examining them ciently to judge from their
outward appearances of their identity and whether they are in proper
condition, and to take them This rule will not appt'. v.hen the cargo
deltvereu to , ustoms authority or arrastre operators. in which case. there
constructive deliver; to consignee
2. COOSA Ladd tv die}
Section 1 (e) The term "carriage of goods" covers the period are loaded to
the time when they are dischar ed from the s ip.
Under COGSA the term "carriage of goods • covers the period from the time
when the goods are loaded on to the time when they are discharged from
the ship. By its terms. COGSA only applies "tackle to tackle" from the point of
loading to the point of discharge. Tackle to tackle means when ship's tackle
rs hooked on, or, if shore tackle is being used, when goods cross the ship s
In addition to exempting from COGSA coverage the period prior to loading
and after unloading, COGSA provides in terms 2hat it does not apply to
carriage of live animals and carriage of goods under å contract that calls for
stowage on deck, if the goods are actually so caried.
In Pyrine Co v. Scindio Steam Navigation Co.
attached to tackle and was being loaded on board when the cargo fell
outside {he ship. It was held that COGSA applied.
At)MJRA1 LAW
3. Code of Commerce
ARTICLE 355. The responsibility of the carrier shall commence from the
charged for the purpose, at the place in. dicated for receiving them,
When the carriage of goods is private, the responsibility of the carrier
commences under article 355 of the Code of Commerce from the moment he
receives the merchandise. This is similar to the provision of of the Civil Code.
However, nothing in the Code of Commerce provides as to when said carrier
responsibility ends: Private carrier responsibility would last only while the
goods are in its possession and not after it has lost control of them.
Stipulation Limiting Carrier's Liabilitv
1. Sgrgo Limitgtion Under the Civil Code
ARTICLE 1744. A stipulation between the common carrier and the shipper or
owner limiting the liability of the former for the loss, de-
struction or deterioration of the goods to a degree than extraordinary
diligence shall be valid, provided it be:
l) In writing, signed by the shipper or owner;
, *-2) Supported by a valuable consideration 'w' other than the service
rendered by the common carrier; and  to
3) Reasonable, just and not contrary public policy.
ARTICLE 1745. Any of the following or similar stipulations shall be considered
unreasonabie, unjust and contrary to
I) That the goods are transported at the risk of the owner and shipper;
That the common carrier will not be li-
able for any loss, destruction, or deterioration of the goods;
That the common carrier need not 9bserve any diligence in the custody of
the goods;
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;
That the common carrier shall not be responsibEe for the acts or omissions
of his or its employees;
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;
That the common carrier is not responSible for the Joss, destructions or
deterioration of goods on account of the defective condition of the car,
vehicle, ship, airplane or other equip• ment used in the contract of carriage;
ARTICLE 1746. An agreement limiting the Common carrier's liability may be
annulled by the shipper or owner if the common carrier refused to carry the
goods unless the former agreed to such stipulation.
ARTICLE 1749. A stipulation that the cotomon carrier's liability is limited to
the value of the goods appearing in the. bilVof—Iadin unless the shipper or
owner declares a greater value, is bi_nding.
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.
ARTICLE 1751. The fact that the common carrier has no competitor along
the line or route, or a part thereof, to which the contract refers shall be
taken into consideration on the question of whether or not a stipulation
limiting the com. mon carrier's liability is reasonably just and in
consonanceyith public policy.
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.  demands that for the validity of a stipulation of this nature, the contract be
t the same strict criterion as stated In article 1750.
Notwithstanding the great rigor with which courts of law have always
enforced the obligations assumed by common carriers, and in spite of the
reluctance with which modifications •of that responsibility imposed on them
by public policy have been allowed. all the modern authorities, except to the
extent that a contrary rule has been established by a constitution or by
statute, concur in holding that the extreme liability of common carriers, may
be limited to a certain extent by special or express contract, provided 
agreed limitation is such as the law can recoqnue as sonablc and not
inconsistent with sound pubti, polio despite this general agreement as to the
existence of such right there is a considerable difference of opinion both with
respect to its estent and limits and as to the manner of its exercise,
especially respect to the right to limit responsibility for losses due to the
caitier's negligence or misconduct It is clear, however, that it IS no:
competent for a carrier, oy contract, to exempt itself from liability for a loss
resulting from its failure to perform a duty by
There are three_kinds of stipulations that are often made in a lading. The
first is one exempting completely the carrier from and all liability for loss or
damages occasioned by its own negligence or that of its employees or agent.
The second is one providing for an unqualified limitation of such liability Of
the caurier an agreed valuation. And the third type is one limiting the of the
carrier to an agreed valuation unless the shipper a higher value and pays the
corresponding higher freight. shipper is given the option. 152
The uniform weight of authority considers the first and secöTid"kind of
stipulation as being contrary to public policy but the third kind •is valid and
enforceable. 103
Article 1744 above provides that shipper or owner and the common carrier
may stipulate to limit the liability of the common carrier for the loss,
destruction or deterioration to a dearee less than extraordinary diligence but
in order that such a stipulation may validly be made, the law imposes these
requisites, namely: (a) is in writing;, signed by both parties; (b) that it be
supported bYävauabfäcOnsideratior!, other than the service rendered by the
$GioWcafrierr ancHc) that it be reasonable, juStxand not contrary to public
policy.
288 PHILIPPINE ADMIRALTY LAW
In Dychangco v. PAL,154 the Court of Appeals ruled that arti. Cle 1744
made in writing and signed by the owner or shipper of the goods and that

However, to require common carriers to obtain the signature of passengers
or shippers or to explain the terms and conditions carriage to eveiY
passenger is not in accord with international commercial practice. In fact, in
Filipinas Prealta v. Madrigal Shipping Co. 155 the Supreme Court held that a
ticket is in itself a complete written contract by and between the vessel and
the passenger. In said case, the ticket was not signed by the passenger nor
was there a showing that the terms and conditions thereof explained to the
passenger. 156
A stipulation in a contract of carriage that the carrier wili not be liable
beyond a specified amount unless the shipper declares the goods to have a
greater value is generally deemed to be valid157 and will operate to limit the
carrier's liability. In Eastern Australian Steamship Co. v. Great American Ins.
Co. 158 it was held that the bil! of lading which stipulated that the carrier
shall not be accountable for goods beyond Stg. 100 in respect cf any one
package or unit was not vioiative of our COGSA. Both set their respective
maximum limit, our COGSA at $500 and the Bill Of lading at Stg 100,
although both allow payment of an amount which may be beyond their
maximum in case of higher valuation of goods which must be declared in the
bill of lading.
Pursuant to such a stipulation limiting liability to a specified amount, where
the shipper is silent as to the value of his goods,  COMMON  PG, U 289
the carrier's liability for loss or damage is limited to the amount specified in
the contract of carriage, and where the shipper states the value of his goods,
the carrieös liability for loss or damage is limited to that amount. Under a
stipulation such as this, it is the duty of the shjppgr to disclose, rather than
of the carrier to de.
fue value of the goods, and silence on the part of the shipper will be
sufficient to limit recovery in case of loss to the amount stated in the
contract o. carriage, although an exception to
this rule has been made in some instances where the carrier has or is
chargeable with knowledge of the value of the goods. 159
In McCarthy v. Barber Steamship Lines, 160 our Supreme Court ruled that
the notation in the bill of lading which indicated
the amount of the letter of credit obtained by the shipper for the importation
of spare parts did not effect a declaration of the value of the goods as
required by the bill of lading. Such was made only for the. convenience of
the shipper and the bank in processing the letter of credit. Hence. it cou}d
not render the carrier liable beyond the stipulated US$500.
Where a contract of carriage provides that when the value of goods shipped
is not declared, ihe carrier will not assume any
• liability in excess of a specified amount, the failure to declare any value
does not constitute an agreement that the goods are worth any partcular
amount. In such a case, any limitation of liability would have to be based
upon a theory bf estoppel, and any estoppel would have to be based upon.
tconduct by the shipper misleading the carrier. 162 Consequently, having
accepted the benefit of a lower freight rate, in common honesty, the shipper
may not repudiate the condition on which it was obtained. 
290 PHILIPPINE ADMIRALTY LAW
The fact that the common carrier has no competitors along the line or route,
or a part thereof, to which the contract refers shall be taken into
consideration in determining whether or stipulation limiting the common
carrier's liability is reasonable, just and in consonance with public policy. 164
Our courts frown on contracts of adhesion or contracts where the public has
no choice but to adhere or agree so as to be able to ship cargo or obtain
passage. In fact, an agreement limiting the common carrier's liability may be
annulled by the shipper or the owner if the com. mon carrier refused to carry
the goods unless the former agreed to such stipulations. 165 Therefore, the
effect of a shipper's consent obtained by means of refusal on the part of the
carrier to carry the' goods is to make the agreement limiting the carrier's
liability voidabie at the instance of the shipper. This is specially true where
the shipper has no choice but to agree to the terms of the common carrier
who enjoys the monopoly of the route.
2. Cargo Limitation (Per Package
Limitation) Under the COGSA
CO GSA
"Section 4(5) Neither the carier nor the ship shall in any event be or become
liable for any loss or damage to or in connection with the transportation of
goods in an amount excee ding $500 per rjackage of lawful mohey of the
United States, or in case of goods not shipped in ages,or the equiva• lent of
that sum in other currency un es. ture and value of such goods have dec!are
by the shipper before shipment and inserted i ll the bill of ladinq. This
declaration, if embodied

COMMON AND PRIVATE CARRIERS
291
in the bill of lading, shall be prima facie evidence, but shall not be
By agreement between the carrier, master or agent of the carrier, and the
shipper another maximum amount than tha ioned in this paragraph mav be
fixed: Provide that such maximum shall not be less t an t e figure above
named. In no more than the amount of damage actually sustainbd.
Neither the carrier nor the ship shall be responsibJe in any event for Joss or
damage to or in connection with the transportation of the. goods if the at bv
the shipper in the bill  "paskage". He based his decision on a case the Second Circuit, Mitsui & Co,
The Carriage of Goods by Sea Act (COGSA) was adopted to standardize the
termc. of ocean hills QC lading in an attempt to cte-ate--mternational
uniformity, io limit the carrier's warranty of •seaworthiness, and to increase
the carrier's liability to $500 per
•u, package or customary freight- unit while at the same time to lirnit
Gcessive claims in respect to small package of great per-package limitation is
to retain a Töper balance between the rights and responsibilities of the
carrier bh*'the one hand and the rights and responsibilities of the claimant
the other. The per package limitation is part of the bargain between carriers
%nd shippers: non-cesponsibility clauses are no longer valid and a certain
standard of care is imposed on carriers, but in return camers benefit from a
maximum per-package . imitation.  equally placed distributed 2,160 televisionon nine
BISSELL. THE OPERATIONAL REALITIES OF CONTAINERIZATION AND
THEIR EF. PECT ON THE -PACKAGE" LIMITATION ANO THE "ON DECK"
PROHIBITION: REVIEW AND SUGGESTIONS. 45 TUI. Law Rev. 902. 903
(1971).
It is to be noted that under COGSA, the basis of the limitation of the
c.aiTier's liability depends on whether the cargo is contained in "package" or
is shipped "per customary freight unit." therefore, necessary to find the
meaning of the word " and "customary freight unit." package"'
Neither the Hague Rules nor the U.S. Carriage of Goods by Sea Act, contain
any definition of the word "package." According to Tetley,i68 a package is a
wrapper, carton, case or other container in which cargo has been placed for
carriage. Since no specialized or technical meaning was ascribed to the word
"pack. age," we must assume that congress has none in mind and intended
that this word be given its plain, ordinary meaning. 169 It is of Interest,
therefore, to review sonne of the package limitation cases:
All State Insurance Co. v. Inversiones Navieras Tuparca, 170 involved the
loss of 341 cartons of stereo equipment. The shipper loaded the cartons
inside a container, sealed it, and had its agent Ide!iver it to the carrier. The
carrier issued a Bill of Lading which described the contents both in number
and in kind. When the contamer arrived in Venezuela, it was empty. The
shipper sought recovery for its full damages, but the carrier relying on
COGSA, sought shelter in the $500 limitation. The District Cpurt concluded
that the container was the COGSA package. However, Judge Anderson.
writing for the Circuit Court, found that each stereo carton was a discrete
v, American Export Lines' 936 in 
F. 2d 807 (2nd Cir. i 981). Judge Friendly expressly rejected as test.
unworkable and unsound the old "Functional Economics Instead, he looked
to see Whether the carrier had clear, unequivocal notice of the container's
contents. Generally, a container supplied by the carrier is not a COGSA
package if it's contents and number of packages or units are disclosed.
In Standard Electrics, S.A. v Hamburg Sudamerikanische pampfshifflahKs-
Gessellschaft,17i group of "packages' was a the single, issue 'package" was
whether for limitationa pallet.
purposes. in 54 In this cartons case, that the were shipper's then agent
tuners separate skids and held in place with metal strapping. The shipper
argued that the carton rather than pallet should be used as the limitation
basis because COGSA is a remedial statute and should be interpreted broadly
to protect the rights of the shippers; that statutory provisions setting fofth a
limitation of liability should be strictiy construed so as to decide all
questionable cases in favor of x; its non-applicability and that $500 a
package provides a more limitation than it did 30 years ago. The Court, in a
split decided in favor of the carrier
Judge Lumbard, writing the majority view, based his opinion the following
points: the dock receipt, bill of lading, and claim letter indicated that the
parties considered each pallet to be a package; the shipper rather than the
carrier chose to make up the anons into a pallet so the shipper should suffer
the consequence: Section 1304(5) of COGSA specifically provides that the
shipper has an option to obtain full coverage by declaring the nature and
value oi the goods in the bill of lading, and, if necessary, to pay a higher
tariff; rules derived from judicial construction of the term
"package" in other factual situations iead to the conclusion that the pallet
and its "contents" are a package. To hold now that {he pallet is not a
package would confuse both the shipper and carrier who rely on these
principals to forecast their insurance needs.
'e The following were held to be packages: A 449,000 machine shipped in a !
arge crate was held by Italian Court of Appeals as a package 172 A 42-foot
cruiser mounted on a "cradle" and on the deck of an ocean carrier was held
to be a "package Likewise, a 36,700 pound electrical transformer bolted to a
of tanker was held as a package.
What is a Customary Freight Unit?
phrase "per. customary freight unit" in the light of its leg.
islative history, refers to a unit of quantity, weight or meaSUrement:i
Generally, in marine contract, the word "freight" is used to denote
remuneration—or-rewardior carriage of goods by ship. rather than the goods
themselves. 174
In Caterpillar American Co. v. SS. Sea Roads, 175 the Court held, that the
"customary freight unit" was a tractor and its parts rather than hundred
weight units, regardless of the harshness or seemingly illogic of such a
result:
With respect to the words customary freight unit, the authorities are
conclusive that the phrase refers to the "unit upon which the charge for
freight is computed" and not to the physical shipping unit. As thus construed,
the statute gives the court the task of determining what unit was actually
used by the carrier for computing the freight charge on the shipment in
question. Under the statute, the freight unit, if one exists, will control the
question of limitation of liability, unless the freight unit employed was show,
and, therefore, not a customary unit within the meaning of the statute.
However, the freight unit should be one that. is well-known in the shipping
industry or at least one known to the immediate 295
parties. In Shrinks Boekj Co Ltd S.S. Pioneer Moon" t U.S. Court of Appeals
held that the bill of lading provision purport• ing to define a portable tank as
a "package" did "0t apply when liquid latex bulk cargo was shipped in
portable tanks owned by the carrier filled under its supervision, and which
tanks were excepted freight charges; the portable tanks "were functional!y a
part of the ship" as much as built-in deep tanks. The correct limitation sum
was $500 per tong ton cf the cargo shipped. the unit used in computing the
freight.
3. Cargo Limitation Under the Code of Commerce
ARTICLE 372. The value of the goods which the carrier must pay in cases of
loss or mispiacement shall be determined in accordance with that declared in
the bill of lading, no proofs being al}owed on the that
there were among the goods declared therein, ar-
ticles of greater value and money.
Horses, vehicles, vessels, equipments, and all other principal and accessory
means of transportation, shall be especially obligated in favor of the shipper,
although with relation tG railroads said obligation shall be subordinated to
the provisions öf the laws of concession with respect to the property, and to
what this Code established as to the manner and form of effecting seizures
and attachments against said companies.
Under Art. 372, the liability of the private carrier in cases of loss to cargo is
limited only to the value of the goods appearing on the bill Of lading and
shipper is not allowed to prove a higher .value.
Delay and Deviation
Civil Code
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.
COGSA
"Section 4(4) Any deviation in saving, attempting to save life or property at
sea, or any reasonable deviation shall not be deemed to be ah infringement
or breach of this Act or of the
contract of carriage, and carrier shall not be liable for any loss or damage
resulting therefrom: Provided. howevcr that if the deviation is for the
purpose of loading or unloading cargo or passengers it shall, prima facie, be
regarded as unreasonable. "
Code of Commerce
ARTICLE 359. If there is an agreement between the shippeQand, the carrier
as to the route over which the conveyance is to be made, the carrier may
not change the route, unless it be by reason of force majeure; and should he
do so without this cause, he shall be liable for all losses which the goods he
transports may suffer from any other cause, beside paying the sum which
may have been stipulated for such case. 
297
When on account of said cause of force majeure, the carrier had to take
another route which produced an increase in transportation charges, he shall
be reimbursed for such increase upon formal proof thereof.
Hence, if without just cause the carrier delays the transvorta• of the cargo or
changes the stipulated or usual route, the contract limiting the common
carrier's liability cannot be availed of of loss, destruction or deterioration of
cargo. In case of deviation necessary to save human life or to avoid a the
delays would be justified.
The term "deviation" in the law of shipping has at the present a varied
meaning and wide significance. It was originally no doubt, for the punpose,
its lexicographical definition namely, to express the wandering or straying of
a vessel customary course of voyage; but it seems to comprehend, every
conduct of a ship or other vehicle used in comto valY or increase the risk
incident to a shipment. delay in starting a shipment when unreasonable or
unexcused came to be regarded as a deviation, not because the vehicle
emp/oyed departed from the usual route of travel, but because the risk of
shipment was changed or increased, and became, in effect, as the one with
reference to which the parties concept of deviation originally applied to
unjustifiof route, American Courts long have held that any carrier misconduct
which amcunts to material breach of the contract of carriage constitutes a
deviation.
PHILIPPINE ADMIRALTY I-AW
298
Delay in prosecuting the voyage and overcarriage, i.e.
riage of cargo beyond the port where it should have been deliv. ered, have
been held to constitute deviations.
Does deviation and delay preclude lirnitation of liability?
Under the Civil Code, article 1747, it does. But under the COGSA, the U.S.
Courts are split over whether an Unreasonable deviation deprives the vessel
owner of the protection of the $500 limit provision. At least when the
deviation is with the privity or knowledge of the owner and the loss is
causally connected with the deviation, it has been held that it does.
Cases cn Vigilance over Goods J800
Where a vessel encountered stormy weather and the coils of ture it was
transporting became rusty because rain entered the hatch of the vessel, the
damage was not due to a fortuitous event, because heavy rains are
foreseeable and rain would not entered ihe hatch if it was closed properly.
Where the loss of cargo due to the sinking of a vessel because the hole
caused by its hitting an unseen protuberance during a typhoon was patched
merely with clay and cement and the patching was not enough for the vessel
to sail safely, the not due to a force majeure. 182
Since fire is imputable to a human act unless it is caused by lightning, where
the vessel could not explain what caused a fire, it is liable for the goods Jost
because of the fire.
COMMON AND PRIVATE CARRIERS 299
The outbreak of fire due to a crack in the auxiliary engine fuel oil service
truck, which resulted in the loss of cargoes, is not due to a force majeure but
to negligence.i84
Where a vessel did not have a look-out at night, the second mate who took
command of the vessel did not have the skill essential for coping with the
risk of collision, and the vessel steered to the left when the risk of collision
with another vessel occurred when under the rules it should have steered to
the right, it is guilty of negligence and is liable for the damage to the
cargoes.185
Even if a collision which resulted in the damage to the cargoes of a vessel
was due to the fault of the other vessel, the shipowner is still liable where
the vessel did not exercise due diligence to avoid the collision. 186
7 The mere fact that the goods were received by the cornmon carrier in
good order and were delivered in bad order is sufficient proof of fault of the
common carrier. 187
A common carrier is liable for the loss of goods due to a hijacking in the
absence of proof that the robbers acted with grave or irresistible force.
Where the goods shippcd were sealed in a container in the absence of the
common carrier, the container was accepted withoul exception by the
customs broker, ' and the consignee claimed there was a shortage in the
goods after the opening of the container in its premises, the common carrier
cannot be held liable.  the buoys were installed only on the fourth day, the consigr obtaineci the
PHILIPPINE ADMIRALTY LAW 300
Where an imported engine was found damaged upon delivery to the
consignee, it passed through several transhippers before a hauling company
delivered it from the piers to the consignee, and there was no indication
from the external appear. ance of the crate that the engine had been
damaged, 190 the hauling company cannot be held liable for the damage.  suddenly tossed by waves of extraordina
Where water could not have seeped into the holds of the vessel the hatches
in which the shipment of urea was loaded were tightly sealed and the hull of
the vessel was in good condition, where a 1% spillage durilig unloading was
normal because the clamped shell used for unloading did not seal very tighly
and the wind blew away some of the urea during unloading. and the urea
was contaminated while being transported by dump trucks after unloading,
the shipowner cannot be held liable for the shortage and contamination of
the urea. 191
12'. A shipowner is not liable for the loss of goods where the ves?el sank
because of unexpected strong winds and enormous waves, because the loss
was due to a fortuitous event. 192
Where the consignee failed to claim a machinery after its arrival and the
carrier deposited it in a warehouse, the carrier is not liable for the damages
sustained by the machinery after its delivery to the warehouse. i9J
The owner of a vessel operating as a common carrier is liable for the loss of
the cargoes when the vessel sank due to a typhoon, where the mader was
negligent, as he knew a typhoon was coming before departure but he did
not check where the typhoon was and the crew were unlicensed and did not
have the prescribed qualifications.  only.
15. Where the delay in the transportation of th,
deceased person was due to the fault of the mortuary Sen.
who enoneously the airline switched company the cannot casket with be held
that of liable anothei for deceadama
person, because of the delay.
16. Where the unloading of cargoes was delayed becat
discharge permit only after six days, a wooc catwalk had to be installed, and
the extension of the wharf wh had to be undertaken, was completed oniy
after nine days, a there were intermittent rains, the vessel was not negligent
and not liable for the subsequent loss of the cargoes due to a typhoc as the
delay was not due to its fault.
17. The loss of cargoes due to the sinking of seawort turboat which has
height is due to a force majeure. 1 97
18. The consignee of a shipment of capsules for the man facture of
pharmaceutical products may rescind the contract carriage and sue the
common carrier for damages where th shipment was delivered two months
and seven days after t? expected date of delivery, because the shipment
w•as neg!igent diverted to anoiher destination, even if the bill of lading
provide that the common carrier dicl not undertake to deliver the shipma at
any particular date and would not be liable for consequentii
' damages caused by delay, because delivery must still be mad within a
reagonable time. 198
1 9. A vessei is liable for the value of a payloader which fe while being
unloaded and became wol thless even if the owne declared that it weighed
2.5 tons when it actually weighed 7.1
302 PHILIPPINE ADMIRALTY LAW
tons, because the vessel should have checked the information entered in the
bill of lading and the fault of the owner constitutes contributory negligence
A vessel hired to transport scrap iron which dumped th scrap iron into the
sea upon order of the mayor is liable obeying the order of the mayor, since
the order is illegal.mo  although Section 4(5) of the Carriage of Goods by Sea Act states that the
A stipulation limiting the liability of the vessel for the loss of goods unless the
owner declares a higher value is valid.201
stipulation that the goods of 202a shipper were being transported at the risk
of the owner is voicl.
E) Law of destination as the applicable law
ARTICLE 1753. The law of the country to which the goods are to be
transported shall govern the liability of the common carrier for their loss,
destruction or deterioration.
Governing law cn Foreign contracts of Transportation
Ir. Chua Kuy v. Everrett Steamship Co., it was held that contracts for the
carriage of goods by sea, to and from ports of the Philippines in foreign
trade, after July 4, 1946, are governed not by the Code of Commerce, but by
the Carriage of Goods by Sea Act. Therefore, if goods are to be transported
to America, then US law will govern the liability of the common carrier for
their IOS' destruction or deterioration. But the provisions of the new Code
primarily govern contracts of carriage of goods from
foreign ports.to Philippine ports.
COMMON AND PRIVATE CARRIEPS 303
Jn American President Lines (APL) v. Klepperv a van containing personal
effects were shipped by Klepper to Manila thru the APL Unfortunately, while
being unloaded, the van fell and the personal effects were damaged. APL
does not dispute its liability as a common carrier; it however contends that
the same cannot exceed $500, invoking in its favor the bill of lading and
Section 4(5) ef the COGSA.
The Court held that the shipping company should only pay Klepper the sum
of $500. With regard to the contention that the Carriage of Goods by Sea Act
should also control this case, the same is of no moment. Article 1753 of the
Civil Code provides that the of the country to which the goods are to be
transported shall govern the liability of the common carrier in case of loss,
destruction or deterioration. This means the law of the Philippines, or our
New Civil Code. Under article 1766, "In all matters not regulated by this
Code, the rights and obligations of common carriers shall be governed by the
Code of Commerce and by special laws," and here we have provisions that
govern said rights and obligations (articles 1736, 1737 and 1738). Therefore,
carrier shall not be liable in an amount exceeding $500 per package unless
the value of thc goods had been declared by the shipper and asserted in the
bill of lading, said section is merely suppietory to the provisions of the Civil
Code.
And in Sealcnd v. CA, 204 it was held that "since the liability of a common
carriey for loss or damage to cargo transported by it under a contract of
carriage is governed by the laws of the country Of destination and the cargo
in question was shipped from the U.S. to the Philippines, the liability of
Sealand to cargo is governed primarily by the Civil Code, and as ordained by
the said Cocle, SUPPIetorily, in all matters not determined thereby, by the
Code of Commerce and special laws. One of these suppletory special laws is
the Carriage of Goods by Sea Act, U.S. Public Act No. 521
PHILIPPINE ADMIRA1-n LAW
304
which was made applicable to all contracts for the carriage of goods by sea
to and from Philippine ports in foreign trade by Commonwealth Act No. 65"
(or COGSA). Notwithstanding that the cargo was for transshipment to Cebu,
the Supreme Court applied the COGSA. The Court, in sustaining the
applicability of the US$500 limitation per package liability under the Bill of
Lading, then proceeded to rule that nothing contained in section 4(5) of the
COGSA is repugnant or inconsistent with the Civil Code. "Said section merely
gives more flesh and greater specificity to the general terms of Article 1749
(without doing any violence to the plain intent thereof) and of Article 1750.
to give effect to just agreements limiting carriers' liability for loss or damages
which are freely and fairly entered into.
It is submitted that since the objective of our COGSA is precisely to bring out
laws on cargo covered by bills of lading by vessels engaged in foreign trade,
in harmony with the international shipping community, then once a vessel is
engaged in foreign trade, COGSA should be applied regardless of the
destination of the vessel and whether it may be applied suppletorily.
Cases on Carriage of Goods by Sea Act204a
The Carriage of Goods by Sea Act applies up to the final port of destination
even if the transshipment was made on an inter-island vessel. 205

Failure to file notice of loss does not bar an action against the carrier if the
actioo was filed within one year. 206
3 An action under the Carriage of Goods by Sea Act must be filed within one
year from the date the last item was delivered to the consginee.  documents, it is the number of cartons-and not of the containers that should
COMMON AND PRN. , CARRIERS
Where an insurer who was sued by the consignee of irn. ported goods filed a
third party complaint against the carrying vessel more than a year after the
delivery of the goods, the third complaint is barred by the one-year
prescriptive period tive partyunder period the Carriage can be of 'avoided
Goods by by Sea the Act, consignee as otherwise by filing the prescrip-a
claim against the insurer.
The one-year prescriptive period under the Carriage of Goods by Spa Act is
inapplicable to the action filed by the importer of pipes and fitting which
arrived ir.Ä1a damaged condition against the insurance company which
insured the pipes and fittings, because the action is based on a contract of
insurance.209
6. The provision in the Civil Code that a written demand tolls the prescriptive
period does not apply to the Carriage of
Goods by Sea Act, since matters affecting the transportation of goods by sea
must be decided as soon as possible. 210
The parties may agree to extend the one-year period to file a case under the
Carriage of Goods by Sea. 211
The prescriptive period for an action against a broker is ten years and not
one year under the Carriage of Goods by Sea Act, since the broker is not a
carrier, charterer or holder of the biil of lading. 212
It is the ten-year prescriptive period which applies to an action for damages
filed by the consignee of imported goods because the consignee was able to
sell them at a low price only because of the delay in their transshipment. 
306 PHILIPPINE ADMIRALTY LAW
Pursuant to the Carriage of Goods by Sea Act, a stipula. tion in the bill of
lading limiting the liability of the vessel to $500 per package does not apply if
the. nature and value of the goods have been inserted in the bill of lading
214
When the goods being shipped are packed in placed in containers supplied
by the carrier and the number of cartons is disclosed in the shipping
be used in computing the liability of the carrier for the loss of the goods, as it
is the cartons that constitute the packages.215
The liability of the carrier for the loss of the goods is limited to $500.00 even
if the bill of lading indicated the amount stated in the letter of credit obtained
by the buyer. because it is not a declaration of the value of the goods for
purposes of the bill of lading.216
Carrier's Reponsibilities for fPassenger Baqqages
ARTICLE 17 The Drovision of Articles 1733 to 17apply to the passenger's
baggages which is not in his personal custody or in that of his employees. As
to other baggages, the rules in Articles 1998 and 2000 to 2003 concerning
the responsibilitv of hotel-keepers shall be aapplicable 
Kinds of Passenger Baggage and Liability passenger's bagqages may either
be (a) in the custodu of the and/or (b) in the custody of the
With respect to baggage in the personal custody of the passenger or in the
custody of his employees, the rules in article 1988
, and 2000 to 2003 concerning the responsibility of hotel keepers are
applicable. As applied to common carriers, such baggage shall be regardeci
as necessarv deposits under article 1998. The common carrier shall he far
sach baqqaqe¯Äepositories, if notice was given to them, or their employees,
of the baggage brought by their passengers and that on the part of the
latter, they
% take the precautions which said common carriers ov their substitute
advised relative to the care and vigilance of their baggage.
A common carrier under article 2000 is responsible as a de4. posiiory for the
loss or injury of the baggage though in the personal custody of the
passengers or in that of their employees caused by the carrier's servants or
employees but not those cauqpd by force majeure. However, the act of a
thief or a robber who has e7täéT+re-ctTITfion carrier's vehicle is not
deemed force maieure.

nle •t is effected with the use of arms or through an irresistible
17 oreover, t e comrnon carrier is not la le tor compensation if the loss of the
baggage in the personal custody of the passenger or in that of his employees
arises from the acts of the
rs or from th the baqqage.
The common carrier may not free himself trom responsibility by
Posting notices to the effect that he is not liable for the baggage
brought by the passengers. And any stipulation between the common
carrier and passenger whereby the responsibility set forth in article 1998 to
2001 is suppressed or climinished shall void.2i8
Baggage Not in Passenger's Custody
The other kind of passenger's baggage are those delivered him into the
custody of the common carrier and, therefore, to be transported in the same
manner as other goods. Because the common carrier has custody of such
baggage and are carried like any other goods, articles 1733 to 1753 shall
apply and the com. mon carrier is required to exercise
extraordinarzdiligence.
And although a baggage has not been declared nor the charges thereon
paid; a carrier is liable for its loss or injury, if it accepted them for
transportation.219
F) Passengers on Sea Vovaqe
ARTICLE i 755. A common bound to carry the passengers human care and
foresight can provide, utmost diligence of very cautious persons, due regard
for al! the circumstances.
ARTICLE 1756. In case of death of ries to passengers, common carriers
sumed to have been at fault or to have ligently, unless •they prove that they
observed extraordinary diligence as prescribed in Articles 1733 and 1755.
ARTICLE 1757. The responsibility of a common carrier for the safety of
passengers as required in Articles 1733 and 1755 cannot be dispensed with
or lessened by stipulation, by the posting of notices, by statements on
tickets, or otherwise.
ARTICLE 1758. When a passenger is carried gratuitously, a stipulation
limiting the cornmon carrier's liability for negligence is valid, 'out not for
wilful acts or gross negligence.
The reduction of fare does not justify any limitation of the common•
carrrier's liability.
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.
This liability of the common carriers does not cease upon proof that they
exercised ail the diligence of a good father of a family in the selection and
supervision of their employees.
ARTICLE 1760. The common carrier's responsibility prescribed in the
preceding article cannot bC eliminated or limited by stipulation, by the
posting of notices, by statements on the tickets or otherwise.
ARTICLE 1761. The passenger must observe the diligence of a good father
of a family to avoid injury to himself.
ARTICLE 1762. The contributory negligence of the passenger does not bar
recovery of damages for his death or injuries, if the proxi- 310 PHILIPPINE
ADMIRA1.n
ntafe cause thereof is the negligence of the common carrier but the anujunt
of damage shall be equitably reduced.
ARTICLE 1763. A common carrier is re. sponsible for injuries suffered by a
passenger on account of the willful acts or negligence of other passengers or
of strangers, if the common car. rier's employees through the exercise of the
diligcnce of a good fathcr of a family could have prevented or stopped the
act or omission.
Summary of Coda! Provisions
For the safety of passengers, the code lays down certain rules in articles
1755 to 1763. In article 1755, the code uses superlative terms in
underscoring the duty of the carrier to exercise utmost ¯diligence in carrying
passengers safely. Under article 1756, there is a rebuttable presumption that
the carrier is negligent in case cf death of or injuries to passengers. The
presumption may be overthrown if the carrier proves that it observed
extraordinary diligence.
Under article 1757, a stipulation that the carrier will not exercise
extraordinary diligence is void. Gratuitous carriage of passengers does not
exempt the carrier from the obligation to exercise extraordinary diligence,
according to article 1758. Under article 1759, the carrier is ligble for the
death of or injuries to passengers thru the negligence af its employees even
if they acted beyond the scope of their authority, and such responsibility
cannot be eliminated or limited by stipulation. The exercise of diligence in
the selection of servants is not a defense.
Article 1761 requires the passenger to exercise the diligence of a bonus
paterfamilias to avoid injury to himself. According article 1762 his
contributory negligence, if not the proximate cause of the accident, will only
mitigate the damages. This means that (1) COMMON AND PRIVATE
CARRIERS
because of the contributory negligence of passenger, the damages are
apportioned between the carrier and the passenger.
Article 1763 extends the carrier's liability to a case where the injuries of the
passenger were due to the willful acts of other passengers or strangers, if
the carrier's employees could have prevented such injuries by the exercise of
the diligence of a bonus paterfamilias.
Extraordinary Diligence is required in the carriage of passengers:
Careful selection of employee is not a defense
Article 1755 of the Civil Code requires common carriers "to carry the
passengers safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with due regard for all the
circumstances." Article 1756 requires them to exercise extraordinary
diligence. Article 1759 states that diligence in the selection of the employees
is not a defense.
Our Supreme Court has consistently held that the transportation of cargo
and passengers by common carriers is of a contractual nature
The company is bound to convey its passengers safely and securely with
reference to the degree of care required by law and custom applicable to the
case.
Upon failure to comply with this obligation, the carrier incurs the liability
commonly incident to the breach of contractual obligations. Where the
accident is due to the negligence of one of its employees, the carrier cannot
avail itself of the defense that it had exercised due care in the selection and
instruction of such employee and that he was in fact an experienced and
reliable servant
The wording of article 1755 shows clearly that a high degree of care and
extraordinary diligence is required of a carrier with respect to passengers
To overcome this presumption of fault. it must be shown that the carrier had
observed the required extraordinary diligence which means that the carrier
must show the utmost diligence of very cautious person as far as human
cave and foresight can provide or that the accident was caused by a
fortuitous event. In order to constitute caso fortuito that would exempt a
carrier from liability. It is necessary that the — (1) event must be
independent of the human will; (2) the occurrence must be impossible to
forsee and the obligor must be free of a convenient or contributory fault or
negligence. Consequently, in an action for damages against a common
carrier for the death of or injury to a passenger, the question is not whether
the party seeking damages for such death or injury had adduced sufficient
evidence to show the negligence or fault of the carrier; but whether the
carrier has presented the required quantum of proof to overcome the
presumption that it has been at fault or that it acted negligently in the
performance of its duty
Burden of Proof: Finding of Carrier's Fault or Negligence not
Necessary
Like in the case of cargo, in an action based on a contract of carriage, the
court need not make an express finding of fault or negligence on the part of
the carrier in order to hold it responsible to pay the damages sought for by
the passengers. By the contract of carriage, the carrier assumes the express
obligation to transport the passenger to his destination safely and to observe
extraordinary diligence with due regard for all the circumstances, and any
injury that might be suffered by the passenger is right away attributable to
the fault or negligence of the carrier. 224 This is an exception to the general
rule that negligence must be proved, and it is therefore incumbent upon the
carrier to prove that it exercised extraordinary diligence as prescribed in
articles 1733 and 1755 of the Civil Code.225
Relation of Carrier and Passenger
*** Relation of Carrier and Passenger
- commences when one puts himself in the care of the carrier, or
directly under its control, with the bona fide intention of
becoming a passenger, and is accepted as such by the carrier.
**
A CARRIER OF PASSENGERS is one who undertakes to transport persons
from place to place, gratuitously or for hire.
COMMON CARRIER - undertakes to carry for hire all persons who
may apply for passage, provided there is sufficient space or room
available and no legal excuse exists for refusing.
PRIVATE CARRIER -
Such carrier may be either a private carrier or a common carrier. A
common carrier of passengers is one who undertakes to carry for hire all
persons who may apply for passage, provided there is sufficient space or
room available and no legal excuse exists for refusing.
The relation of carrier and passenger commences when one puts
himself in the care of the carrier, or directly under its control, with
the bona fide intention of becoming a passenger, and is accepted as
such by the carrier. — As where he makes a contract of transportation and
presents himself at the proper place and in proper manner to be transported:
but not where he does not present himself in a proper way to become a
passenger. One does not become a passenger until he has put himself in the
charge of the carrier. According to Benedict, passengers are those who pay
“freight” for the carriage of their persons and baggages.
A person riding on a freight train, on a driver's pass or a similar
arrangement, to look after livestock being transported and as incident to
such transportation he must is generally regarded as a passenger for hire,
However he must have accompanied the shipment with the agreement of
the carrier, otherwise he is not a passenger. Assuming that the deceased
was an intending passenger, such a relation was never accepted by the
appellee as he did not present himself at the proper place and in proper
manner to be transported. He should have stayed at the station, ticket office,
waiting room, or even inside the passenger coach; but not beside the
baggage car or inside it, the latter place not being used for conveying
passengers. Assuming again that the deceased intended to accompany his
cargo inside the baggage care, nowhere in the Shipping Order or Freight Bill
does it authorize the shipper to accompany the shipment: nor was he given
any special arrangement by the carrier, then, did not owe to the deceased
the extraordinary diligence that is required of carriers regarding their
passengers under article 1755 of the Civil Code
Carrier not Liable for Injuries to Passengers caused by Explosives
brought by other Passengers
In Nocum v. Laguna bus Co.233 a passenger was injured together with
several other passengers by the explosion of firecrackers contained in a box
brought into the bus by another passenger. The owner of the box, when
asked, informed the conductor that it contained only his clothes. The
firecrackers exploded while in transit. The question was whether the
defendant carrier is liable for the resulting injuries. The lower court held that
the carrier was liable under article 1733 and 1755 of the Civil Code
because its employees should have made the proper inspection of all the
baggage carried by the passengers. But the Supreme Court reversed it,
holding that under the circumstances said articles imposed no such
obligation upon the carrier. According to the Court, fairness demands that in
measuring a carrier’s duty towards its passengers, allowance should be given
to the reliance that
should be reposed on the sense of responsibility of all the passengers in
regard to their common safety. It is to be presumed that a passenger will not
take with him anything dangerous to the lives and limbs of his co-
passengers, not to speak of his own. Besides, the right to privacy to which
each passenger is entitled is not to be lightly taken. He cannot be subjected
to any unusual search when he protects the innocuousness of his baggage
and nothing appears the contrary, as case. In other words, inquiry may be
verbally made as to the nature of a passenger's baggage when such is not
outwardly perceptible, but beyond this, constitutional boundaries are already
in danger of being transgressed. The Court emphasized the need for
evidence of circumstances indicating the cause for apprehension that the
passenger's baggage is dangerous and that it is the failure of the common
carrier's employee to act in the face of such evidence that constitutes the
cornerstone of the carrier's liability in such cases. Otherwise stated, the
carrier, to be liable, must be aware through its employees of the nature of
the article or must have had some reason to anticipate danger therefrom.
The mere issuance of a plane ticket does not grant the holder thereof
an absolute and unqualified right to board the plane. Thus held the
appellate court in the case of Lucero v. Philippine Airlines, Inc
In that case, Lucero, who was pregnant, was a confirmed of a PAL flight
from Manila to Calbayog but was refused when she presented herself at the
PAL check-in counter the scheduled date, The check-in counter clerk had
noticed that her pregnancy was at advanced state, She was referred to a
medical center who declared her to be eight information that she was unfit
for air travel certification to this effect was issued with an information that
she was unfit for air travel

It is submitted that the above doctrine may not apply if it is a condition

printed in every passenger ticket issued by carrier that the. Holder thereof
and his luggages are subject to search for, and seizure of, prohibited
materials or substances and the holder refusing to be searched shall not be
allowed to board the vessel. The fact that a passenger was able to carry an
explosive device contained in a suitcase undetected by the employees of the
carrier, and said explosive device was the cause of the explosion causing
death or injury, proves that the carrier did not exercise the utmost diligence
of very cautious persons, having due regard for all the circumstances.

Passenger Ticket is a Written Contract

It is of common knowledge that whenever a passenger boards a ship for

transpiration from one place to another he is issued a ticket wherein the
terms of the contract are specified. A passenger ticket is not a bill of
lading or similar instrument of title within Code of Commerce [Articles 706-
718] or Carriage of Goods by Sea Act. This ticket is in itself a complete
written contract by and between the vessel and the passenger. It has all the
elements of complete contract, namely: (1) the consent of the contracting
parties manifested by the fact that the passenger boards the ship and the
vessel consents or accepts him in the ship for transportation; (2) cause or
consideration which is the fare paid by the passenger as stated in the ticket;
and (3) object. Which is the transportation of the passenger from the place
of departure to the place of destination which are stated in the ticket.
Consequently, an action filed more than six years after the breach of
contract to recover damages resulting from death of a passenger may not be
dismissed on the ground that as it is not based on a written contract, it has
prescribed.

Passenger's Boarding Rights