Essentials of Transportation and Public Utilities Law
By Timoteo B. Aquino
PART I: COMMON CARRIERS
- Only late in the Spanish period when balance began to
tilt toward land transportation with the Manila-
Dagupan railroad
- Every offering of technology brings about causes of
discontent and improved means of transportation is
inevitably coupled with the bane of hazards
 Why special rules are provided for in CC
>> Higher degree of care on common carriers was to
protect passengers from tragic mishaps that occur
with rapid modern transportation
- Part I of this work consists of general concepts and
rules that apply to all types of transportation—land,
water, and air
- Part II and III pertain to special rules that apply to
maritime and air
 Part III also contains the formalities of the contract
of carriage
CHAPTER 1: GENERAL CONSIDERATIONS
- There is a contract of transportation when a person
obligates himself to transport persons or property
from one place to another for a consideration
- Private or common carrier + goods or passengers
- Passenger: one who travels in a public conveyance by
virtue of a contract, express or implied, with the
carrier as to payment of far or its equivalent
 Passenger is still one even if he is carried
gratuitously or under a reduced fare
>> A1758: when passenger is carried gratuitously, a
stipulation limiting common carrier’s liability for
negligence is valid
- Shipper: person who delivers the goods to carrier for
transportation; pays consideration or on whose behalf
payment is made
- Consignee: person to whom goods are to be delivered;
may be shipper himself when goods are delivered to
one branch or a third person not a party to contract
 Consignee may be deemed bound by terms of a bill
of lading when he accepted the same and is trying to
enforce it
- 2 types of contracts of carriage of passengers:
1) Contract to carry- agreement to carry a passenger at
some future date
 Perfected by mere consent
>> In carriage of goods, perfection ensues when goods
are unconditionally placed in possession of the carrier
 May be breached even if no tickets were issued and
contract was verbal in form of confirmed bookings
2) Contract of carriage- real contract wherein the
obligation begins upon actual use of facilities
 Aircrafts- perfection ensues when all that is left is to
ride aircraft (baggage, immigration, shuttle bus)
 Buses, jeeps, and street cars,-perfection ensues
upon acceptance of the offer by attempting to board
>> Carrier would be liable to injuries to boarding
passengers as drivers have duty to afford passengers
opportunity to board
 Trains- perfection ensues upon purchase of ticket
and presentation of passenger at the proper place and
manner with intent to ride
- Problems:
1) X, who paid for freight charges for the transport of
his 7 sacks of palay and was issued with Way Bill No.1,
boarded the freight wagon without permission and
died when the wagon fell on its side. Is X a passenger?
A: NO. Carrier assumes no duty of care in X’s favor.
2) Ricardo Santos purchased a City Railways train
ticket but while waiting at the station, he had an
altercation with the City Railways security guard and
fell as the train passed the station causing his death.
Does Ricardo have a cause of action?
A: YES. There was a perfected contract and City
Railway already owed Ricardo extraordinary diligence.
A1732: Common carriers are corporations, firms,
associations, or persons (CFAP) engaged in the business of
carrying or transporting passengers or goods or both, by
land, air, or water (LAW) for compensation, offering their
services to the public.
- One that holds itself out as reading to engage in the
transport of goods for hire as a public employment and
not just as casual occupation
- Under C.A. No. 1416 or the Public Service Act, public
service includes every person who controls, operates,
or manages in PH, for hire or compensation, with
general or limited clientele, any common carrier,
railroad, street railway, subway motor vehicle either
for freight, for passenger or both, with or without a
fixed route
- Tests in First PH Industrial Corp. v. CA:
1) Must be engaged in business of carrying goods for
others as public employment and must hold himself
out as ready to engage in the general business, not as
casual occupation
2) Undertake to carry goods of the kind to which his
business is confined
3) Undertake by the method his business is conducted
over established roads
4) For hire
 Beach resort that conducts tours including
transport to and from the resort is a common carrier
since the resort owns boats that accommodate anyone
 Court has expanded the concept of common carriers
under the test pronounced in First PH Industrial
- Characteristics of common carriers not controlling
from case law:
 Main or general business (v. sideline)
>> A junk dealer who would transport scrap material
via 2 of his trucks is a common carrier vis-à -vis
merchants who had the material delivered to them
 Fixed schedule
 General clientele
>> Customs broker and warehouseman who only
offered transport of item from port to their warehouse
but on a regular basis was deemed a common carrier
 Execution of individual contracts
 Certificate of Public Convenience
 Transport by motor vehicle
 >> Transport of oil or petroleum through pipelines
was considered one of common carriers
Fixed and publicly known routes, terminals,
issuance of tickets
- Charter-party: contract by which the owner allows use
of an entire ship or a principal part thereof to another
 Types-
a) Contract of affreightment – use of shipping space on
vessels leased for carriage of goods
>> May be a time charter (period) or voyage charter
b) Bareboat or demise charter- charterer mans vessel
with his people and commands vessel for a voyage,
transforms common carrier into private carrier
- Distinction between common and private carrier lies
in the character and frequency of business
 Private carriage is undertaken by special agreement
where they may freely stipulate
>> Private carrier exemption from liability for
negligence of its employees is allowed
 For private carriers, only ordinary diligence is
required and they are not presumed to be at fault or
negligent for any loss, destruction, or deterioration
- Problems:
1) Tirso Molino chartered a vessel to transport 2
tractors when the crane operator of the shipping
company negligently positioned the tractors where
they would tilt each other. May the shipping company
cite a stipulation exempting it from liability for the
negligence of its agents?
A: YES, as the case was a bareboat charter.
2) AB, a congressional candidate in Marinduque,
chartered a helicopter owned by LMC where the latter
stipulated in the charter agreement that it would not
be responsible for acts of its pilot or the condition of its
engine. May LMC be held liable for the helicopter
crashing due to pilot error that led to AB’s death?
A: NO, LMC’s charter agreement with AB disclaimed
any responsibility for the simple negligence of its
employees and unless there is gross negligence, LMC
should not be held liable.
3) C Co. rented X Shipping’s vessel to transport 20K
bags of soybeans to the Toyo Factory, stipulating that X
Shipping was exempt from liability for the negligence
of its agents. Is X Shipping liable to reimburse an
insurance policy against all risks as only 10.5K bags
were delivered?
A: NO. The agreement is a bareboat charter as X
Shipping only agreed to carry special cargo or
chartered only to a special person making it a private
carrier.
- Towage: a vessel is hired to transport another vessel to
another place; to expedite a voyage without reference
to any danger
 Towing party required only the diligence of a good
father of the family or ordinary diligence
- Arrastre: Spanish for hauling of cargo; handling of
cargo between the ship’s tackle or government
wharf/piers to the establishment of the shipper
 Not in maritime transport but more akin to a
depositary or warehouseman
 Mandated to observed the extraordinary diligence
of a common carrier or warehouseman
- Stevedoring: loading and unloading of vessels
 Only ordinary diligence is required as only
stevedores merely provide labor for handling of cargo
- Travel agency: involves contract of service to arrange
booking, ticketing, and accommodation
 Only ordinary diligence is required
- Types of cargo operation:
1) Line service- operation of common carrier that
publicly offers services sans discrimination to clients
through a fixed schedule and published freight rates
2) Tramp service- contract carrier that has no regular
and fixed routes and schedules but accepts cargo
whenever it desires
 Contractual basis or special arrangement
A1766: In all matters not regulated by CC, rights and
obligations of common carriers shall be governed by the
Code of Commerce and special laws.
- Treaties may also apply
A1753: Law of country to which goods are to be
transported shall govern liability of common carrier for
their loss, destruction, or deterioration.
- Immaterial that the collision occurred in foreign
waters or countries not the ultimate destination
- Summary of Rules:
a) Coastwise Shipping, Overland Transportation, Air
Transportation- Primary governed by CC but Code of
Commerce may supplement
 In air transport, Warsaw Convention also
supplementary
b) Carriage from Foreign Ports to PH Ports- CC but
supplemented by Code of Commerce and Carriage of
Goods by Sea Act
c) Carriage from PH to Foreign Ports- laws of country
of destination
- The nature of common carriers’ business is that they
are public utilities for the comfort and convenience
and safety of the public
 Reason behind obligation to extraordinary diligence
- Registered owner rule: registered owner of a vehicle is
is liable for any damage caused by its negligent
operation although it was already sold or conveyed to
a subsequent owner at the time of the accident
 Registered owner has a right of recourse against the
transferee via a third-party complaint but proof of the
real owner cannot relieve him of his responsibility to
the injured plaintiff
 Registered owner rule applies in a financial lease
where the lessor finances the purchase of machines,
equipment, motor vehicles, or appliances (MEMA) at
the instant of the lessee, who has the right to use the
MEMA for not less than 2 years in exchange for
payment of 70% of the purchase price but with no
obligation to pay at the end of the lease
 Registered owner rule applies under the Kabit
system whereby a person granted certificate of public
convenience allows others to operate under his license
for a fee or percentage of the earnings
 >> Kabit system is not outright penalized but is void
and inexistent being contrary to public policy
>> Parties to the kabit system cannot invoke the same
to escape liability as they are in pari delicto
>>> In Teja Marketing v. IAC, the register owner was
not allowed to recover unpaid balance of a sidecar he
sold to respondent
>>> In Lita Enterprises v. IAC, the respondents who
availed of the kabit system were not allowed to
register ownership of their 4 remaining cars not levied
upon to answer for damages
 However, the registered owner is not liable if the
vehicle was taken without his consent
>> Registered owner is also absolved if he registers the
lease of his car with the LTO
- Land Transportation and Traffic Code (LTTC)
mandates compulsory registration of motor vehicles
through an equitable scheme over a calendar year
 Registration and its conspicuous display is a
precaution to reduce careless operation of vehicles
>> Not as operative act vesting ownership in contract
of sale but to permit use in any public highway
 Any registration not renewed before the date fixed
by the Bureau of Land Transportation shall be invalid
 LTTC also mandates:
>> Report of sales by dealers
>> Approval of repairs or alteration of engine serial
numbers
>> Recording of encumbrances of motor vehicles
>> Keeping of certificate of registration in the car
>> Suspension of registration of unsafe, unsightly, or
overloaded vehicles
> Display of reflective number plates in the front and
rear of every motor vehicle at all times
- Under the boundary system, the common carrier
cannot escape liability by claiming that the driver
should be liable as lessee
 Drivers would be incentivized to drive recklessly
just to reach boundary while financially incapable of
paying damage they may cause
- Problems:
1) Mr. Villa, a franchise holder and registered owner of
a truck leased the same to Mrs. Santos without
notifying the LTFRB. The truck leased to Mrs. Santos
then ran over X causing the latter’s death. What
recourse does X’s parents have?
A: Action for damages against Mr. Villa under the
registered owner rule, action for quasi-delict against
Mrs. Santos or the driver, criminal case of reckless
imprudence resulting to homicide against the driver.
2) Can the sheriff levy on the vehicle registered under
the holder of a certificate of public convenience under
the kabit system yet truly owned by a third person to
the accident?
A: Yes, vehicle is deemed owned by registered owner.
CHAPTER 2: OBLIGATIONS OF THE COMMON CARRIER
I. Accept passengers or goods without discrimination
- Dates back to US Congress or Parliament of England
prohibiting preferences and penalizing discrimination
- Present laws disallow discrimination or giving
preference to any person locality or kind of traffic
 Illegal for domestic ship operators to refuse to
accept
 Unlawful for airfreight forwarder to give preference
 LTFRB prohibits discrimination for common
carriers holding a franchise
- Valid grounds for non-acceptance- (DOUCHE DDS)
1) Dangerous objects or substances
2) Overloading
3) Unfit goods for transportation (defective packaging)
4) Contraband or illegal
5) Health risks
6) Exposure to untoward danger i.e. capture by enemy
7) Diseases
8) Delay in tendering goods
9) Strike
- Dangerous objects/substances, animals, forest
products, fish, minerals may be transported only with
clearance from government agencies
 Certificate of public convenience may indicate
authority to transport explosives
A356 CCom: Carriers may refuse packages that appear
unfit for transportation and if carriage is made by railway
and shipment is insisted upon, the company that shall
transport them shall be exempt from all responsibility if its
objects appear in the bill of lading.
A357 CCom: If the carrier, by reason of well-founded
suspicion of falsity in the declaration as to the contents,
decides to examine the package, he shall proceed with his
investigation in the presence of witnesses, with the
shipper or consignee in attendance.
If the shipper or consignee does not attend, the
examination shall be made before a notary, who shall
prepare a memorandum of the result of the investigation,
for purposes as may be proper.
If the declaration of shipper be true, examination expenses
and repackaging shall be for the carrier’s account.
- Under A1742, common carrier shall forestall or lessen
loss, destruction, or damage even if caused by the
character or faulty packaging of the goods.
S4 of Animal Welfare Act: It shall be the duty of any owner
or operator of any land, air, or water public utility
transporting pet, wildlife, and all other animals, to provide
in all cases, adequate, clean, sanitary, facilities for the safe
conveyance and delivery thereof to their consignee at the
place of consignment. They shall provide sufficient food
and water for such animals while in transit for more than
12 hours or whenever necessary.
No public utility shall transport any such animal without a
written permit from the Bureau of Animal Industry. No
cruel confinement or restraint shall be made on such
animal while being transported.
Any form of cruelty shall be penalized even if the
transporter has obtained a permit. Cruelty in transporting
includes overcrowding, placing of animals in the trunks or
under the hood of vehicles.
- S7 makes it unlawful for any person who has custody
of an animal to abandon such sans reasonable cause
 Constitutes maltreatment under S9 that is
punishable by imprisonment or a fine
S26 of the Magna Carta for Disabled Persons: State shall
promote mobility of disabled persons. Disabled persons
shall be allowed to drive motor vehicles subject to rules
and regulations of the LTO pertinent to the nature of their
disability and modifications on vehicles.
S27: DSWD shall develop a program to assist marginalized
disabled persons gain access in the use of public transport
facilities. Such assistance may be in the form of subsidized
transportation fare.
Department shall also allocate funds as may be necessary
for effective implementation of public transport program
for the disabled persons.
S34: It shall be considered discrimination for franchises or
operators and personnel of land, air, and sea
transportation facilities to charge higher far or refuse to
convey a passenger, his orthopedic devices, personal
effects, and merchandise by reason of his disability.
S5(c) of Senior Citizen Act of 2003: DOTC shall develop a
program to assist senior citizens to fully access use of
public transport facilities.
- 20% discount in transportation services
- Expanded Senior Citizen Act of 2010 mandates equal
access to air transport for senior citizens
II. Deliver Goods or Bring Passenger to Destination
- Must be within stipulated time and any delay from any
cause makes the carrier liable
 Determined from circumstances of a case
A358 CCom: If there is no period fixed for delivery of the
goods, carrier shall be bound to forward them in the first
shipment of the same or similar goods he may make to the
point of delivery; should he not do so, damages caused by
the delay should be for his account.
- In the absence of a special contract like a bill of lading,
the carrier is not an insurer against delay in transport
of goods
 Reasonable time depends upon nature of goods
- Problem:
1) Can a consignee that delayed in claiming chairs for
its movie house claim damages from the carrier that
also errantly shipped the chairs back to Manila?
A: YES, the mistake in shipping the chairs back to
Manila caused unreasonable delay and damages to the
consignee.
- Excusable delay suspends but not terminate a contract
of carriage
 When cause is removed, carrier must proceed with
the voyage and deliver
 During delay, vessel continues to be liable as a
common carrier and not as a warehouseman
- If delay is legally inexcusable, carrier is: (NSD)
1) Liable for damages caused by natural disasters
2) Not absolved by stipulation limiting liability
3) Liable for damages caused by Delay
- Common carrier is obligated to follow the usual
reasonable commercial or customary route
 Liable for damages caused by delay or improper
deviation
>> No improper deviation if for replenishment of fuel
A1740 of CC: If common carrier negligently incurs in delay
in transporting the goods, a natural disaster shall not free
such carrier from responsibility.
A1747: If common carrier, without just cause, delays
transport of goods or changes the stipulated or usual
route, the contract limiting common carrier’s liability
cannot be availed of in case of loss, destruction, or
deterioration of goods.
A370 of CCom: If period is fixed for delivery of goods, it
must be made within such time and for failure to do so,
carrier shall pay indemnity stipulated in the bill of lading,
with shipper or consignee not entitled to anything else.
If no indemnity was stipulated, carrier shall be liable for
damages the delay may have caused.
A371: In case of delay through the fault of the carrier,
consignee may leave the goods transported in the hands of
carrier, advising him in writing before their arrival at the
point of destination.
When this abandonment takes place, carrier shall pay the
full value of goods as if they had been lost or mislaid.
If abandonment is not made, indemnification for losses and
damages by reason of delay cannot exceed the current
price the goods would have had on the day and at the place
in which they should have been delivered; same rule is
observed in all other cases in which indemnity may be due.
A372: Value of goods that the carrier must pay in cases of
loss or misplacement shall be determined in accordance
with that declared in bill of lading, with shipper disallowed
to present proof that the goods were of greater value.
Horses, equipment, vehicles, and all other principal and
accessory means of transport shall be especially bound in
favor of the shipper, although with respect to railroads,
liability shall be subordinated to laws of concession with
respect to property and to seizures and attachments
against said companies.
A373: Carrier who delivers to consignee by virtue of
combined agreements or services with other carriers shall
assume obligations of those who preceded him in the
conveyance, reserving his right to proceed against the
latter if he was not directly responsible for fault that gave
rise to the claim of the shipper or consignee.
Carrier who delivers shall likewise acquire all actions and
rights of those who preceded him in the conveyance.
Shipper and consignee shall have an immediate right of
action against the carrier who executed the transport
contract or against other carriers who may have received
the goods without reservation.
However, reservation made by latter shall not relieve them
from responsibilities incurred due to their own acts.
A374: Consignees to whom shipment was made may not
defer payment of expenses and transport charges of the
goods they receive after the lapse of 24 hours following
their delivery; in case of delay, carrier may demand judicial
sale of goods transported in an amount necessary to cover
the cost of transportation and expenses incurred.
- In case of abandonment, carrier shall be liable for the
total value of such goods
 Abandonment is an exceptional but limited right
from moment the carrier is in delay until the moment
just before the arrival of the goods
 Applicable to overland and marine transport
 May also be made by stipulation or agreement
- CC is silent as to the right of passengers in case of delay
 A698 of the CCom, however, provides:
A698: In case a voyage already begun should be
interrupted, passengers shall be obliged to pay the fare in
proportion to the distance covered, without right to
recover for losses and damages if interruption is due to
fortuitous event, but with a right to indemnity if
interruption should have been caused by the disability of
the vessel. Passenger should agree to await repairs and
pay for his living expenses but he may not be required to
pay increased price of passage.
- Passenger is entitled to damages if he stayed aboard
 Carrier is absolved if passenger disembarked even if
carrier was still late to get to the destination
>> MARINA MC No. 112- in case of unreasonable delay
in departure due to negligence, the passenger may opt
for a refund. In case vessel cannot continue for any
cause, carrier is under obligation to transport the
passenger to his destination at the expense of the
carrier, including free meals and lodging.
>> No obligation for free meals if delay was due to
force majeure
III. Deliver Goods to Proper Person
A360 of CCom: Shipper, without changing the place where
delivery is to be made, may change the consignment of
goods which he delivered to the carrier, provided that at
the time of ordering the change, the bill of lading signed by
the carrier be returned to him, in exchange for another
wherein novation of the contract appears.
Shipper shall pay for expenses that the change of
consignment occasions.
A368: Carrier must deliver to the consignee, without any
delay or obstruction, goods which he may have received,
by the mere fact of being named in the bill of lading to
receive them; and if he does not do so, he shall be liable for
damages caused thereby.
A369: If consignee cannot be found at the residence
indicated in the bill of lading or if he refuses to pay
transportation charges or if he refuses to receive the
goods, the municipal judge shall provide for their deposit
at the disposal of the shipper, with the deposit producing
all effects of delivery, without prejudice to 3 rd parties with
a better right.
- Carrier cannot use the anonymity of the endorsee or
that the consignee delayed in the delivery of the bill
A1513 of CC: Person to whom a negotiable document of
title has been duly negotiated acquires:
(1) Title to the goods as the person negotiating the
document to him had or had the ability to convey to a
purchaser in good faith for value and also such title to the
goods as the person to whose order the goods were to be
delivered by the terms of the document; and
(2) Direct obligation of bailee issuing the document to
possess the goods for him according to terms of the
document as if bailee contracted directly with him.
- Bill of lading may be negotiated to a holder for value
IV. Exercise Extraordinary Diligence in Duties
A1733: Common carriers, from the nature of their business
and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over goods and
safety of passengers transported by them, according to all
circumstances of each case.
A1755: A common carrier is bound to carry passengers
safely as far as human care and foresight can provide,
using utmost diligence of very cautious persons, with due
regard for all circumstances.
A363 of CCom: Outside cases mentioned in the 2nd
paragraph of A361, carrier shall be obliged to deliver
goods shipped in the same condition in which, according to
the bill of lading, they were received, without any damage
or impairment, and failing to do so, to pay the value which
those not delivered may have at the point and time the
delivery should have been made.
If those not delivered form part of the goods transported,
consignee may refuse to receive when he proves that he
cannot use them independently of the others.
A364: If the effect of damage is merely a diminution in the
value of the goods, carrier is obliged to the payment of the
amount in the judgment of experts constitutes such
difference in value.
A365: If, in consequence of the damage, the goods are
rendered useless for sale and consumption they are
properly destined, consignee shall not be bound to receive
them and he may have them in the hands of the carrier,
demanding of the latter their value at the current price.
If among the damaged goods there should be some pieces
in good condition and without any defect, the foregoing
provision shall be applicable with respect to those
damaged and consignee shall receive those which are
sound, unless consignee proves impossibility of
conveniently making use of them in this form.
Same rule shall be applied to merchandise in bales or
packages, separating those parcels, which appear sound.
- Problem:
1) A shipped 100 pieces of plywood from Davao to
Manila and insured the same against loss and damage
due to perils of the sea and other such perils. A
shipman forgot to secure one porthole through which
seawater seeped and damaged the plywood. Can the
insurance company validly refuse to pay on the ground
that the sea was reasonably calm in the voyage?
A: YES. The proximate cause of the damage was not
perils of the sea but the negligence of the shipman.
Hence, A’s recourse is to file a case for damages against
 the shipowner or ship agent for not exercising
extraordinary diligence.
A1735 of CC: In all cases other than those mentioned in
No.1-5 of the preceding article, if goods are lost, destroyed,
or deteriorated, common carriers are presumed to have
been at fault or have acted negligently, unless they prove
that they observed extraordinary diligence.
A1756: In case of death or injuries to passengers, common
carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed
extraordinary diligence.
- Court need not make an express finding of fault or
negligence as law imposes a presumption
 Only proof needed is evidence that contract of
carriage and the loss, deterioration, death, or injury
took place during the existence of the contract
>> For loss or deterioration to be proven, proof of
delivery to the carrier in good order and arrival to
consignee in bad order may be adduced
 Establishing negligence by another vehicle may
rebut presumption of negligence
- To require the plaintiff to prove negligence would
force him to rely on the carrier or its employees
- Duty of seaworthiness and care of the cargo is non-
delegable with the carrier is responsible for the acts of
the master, crew, and his other agents
 That the consignee is required to furnish persons to
help in unloading may not relieve carrier from
responsibility
- No presumption of bad faith even if negligence is
presumed, nor that negligence was gross
- Acquittal of common carrier’s employee in a criminal
case is immaterial to case of breach of contract
- Problems:
1) Peter hailed a cab driven by Jimmy and when the
cab collided with a jeep, Peter fractured his leg. Peter
was awarded damages based on culpa contractual,
which Jimmy wanted to challenge on the ground that
the SC did not make an express finding that Jimmy was
responsible for the collision. What will you tell Jimmy?
A: I will tell Jimmy to desist from such challenge as his
negligence as a common carrier is presumed with
Jimmy having the burden of proof to prove
extraordinary diligence.
2) In an action for damages arising from the death and
injury of bus passengers, the counsel for the bus filed a
demurrer to evidence arguing that the passengers did
not submit any evidence as to the operator’s
negligence. If you were the judge, would you dismiss?
A: NO. Provided there is proof of death or injury, the
negligence on the part of the bus operator is presumed.
A1736: Extraordinary responsibility of common carrier
lasts from the time the goods are unconditionally placed in
the possession of and received by the carrier for transport
until the same are delivered, actually or constructively, by
the carrier to the consignee, without prejudice to A1738.
A1737: Common carrier’s duty to observe extraordinary
diligence over goods remains in full force and effect even
when they are temporarily unloaded or stored in transit,
unless the shipper or owner has made use of the right of
stoppage in transitu.
A1738: Extraordinary liability of common carrier
continues even during the time the goods are stored in a
warehouse of the carrier at the place of destination, until
the consignee has been advised of the arrival of the goods
and has had reasonable opportunity thereafter to remove
them or otherwise dispose of them.
- Goods are deemed delivered to the carrier when they
are ready for and have been placed in the exclusive
possession, custody, and control of the carrier and the
latter has accepted them
 Fact that the goods have not yet been loaded on
common carrier does not affect carrier’s custody
- Surrender of the bill of lading is not necessary for the
discharge of the obligations of carrier
 If bill of lading cannot be returned, consignee must
give a receipt for goods delivered
- Duty to observe extraordinary diligence remain in
force even when they are temporarily unloaded and
stored
 However, if the shipper or owner has made use of
the right of stoppage in transitu (right of an unpaid
seller to resume possession of the goods at any time
while in transit) extraordinary diligence need not be
exercised
>> Right of stoppage in transit is available if:
a) Buyer is or becomes insolvent
b) Unpaid seller has parted with possession of goods
c) Goods are still in transit
>> Contract of carriage is terminated by the exercise of
the right of stoppage in transitu
- Problem:
1) Can Star Shipping be absolved of liability for
delivering 88/100 damage cartons of sardines due to
the fact that 555 failed to present a bill of lading?
A: NO. The fact that the shipper failed to present the
bill of lading is not a bar to recovery. The contract of
carriage was already perfected and breached.
- For trains, extraordinary responsibility commences
the moment a ticket holder presents himself at the
proper place and manner with intent to ride
 Person riding to look after livestock is regarded as a
passenger as long as the carrier agreed
 Person still alighting the train and walking on its
platform and person retrieving his bag is still a
passenger
>> Mere purchase of tickets does not create carrier-
passenger relationship
>> One who inquires or rides a vehicle that he knows is
not intended for passengers is not presumed as such
- For trains, extraordinary diligence must also be
exercised in the maintenance of its tracks
 However, it is not the duty of the engineer to stop
the train every time he sees a person on or near the
tracks with persons walking responsible for their own
safety
>> Yet, in one case, where a pressurized railroad tank
was loaded with butadiene was parked and exploded,
carrier was made liable for damage to nearby property
caused by its negligence
- Due diligence also relate to buses or jeeps crossing a
railway while railroad companies are only expected to
exercise reasonable care
- Train operator is liable if it did not place crossbars,
signal lights, warning signs, and barriers in places
reasonably necessary but not in all intersections
 Despite this, the general rule is that the rights and
obligations between the public and railroad company
at a public crossing are mutual and reciprocal
- Negligence of driver of a car in not looking and
listening in its collision with a train cannot be imputed
to their passengers
- In carriage by sea, duty of extraordinary diligence
commences as soon as a bona fide intention to take
passage is accepted
- For land transportation, motor vehicles are duty
bound to stop their conveyances for a reasonable
length of time to give opportunity to board
 They are liable for injuries by boarding passengers
resulting for sudden starting or jerking of vehicles
 Rule is once a public utility jeep or bus stops it
makes a continuous offer to prospective riders
 Duty of utmost diligence terminates only upon
reaching his destination and after being given
reasonable opportunity to leave the carrier’s premises
- Problems:
1) Is S/S Tamaraw responsible for an 80-year old
epileptic passenger who fell into the waters while
disembarking via a gangplank and who died a month
after?
A: YES. Failure to exercise utmost diligence is
presumed the moment the passenger did not reach his
destination and regardless of the cause of the fall, it is
presumed that a sufficient gangplank would have
prevented the injury.
2) Is GL Transit responsible for the serious injuries
suffered by an alighting passenger who fell from the
bus platform as the bus accelerated?
A: YES. Motor vehicles are duty bound to stop their
conveyances for a reasonable length of time and are
responsible for sudden starting and jerking.
3) Nicanor Navidad entered the EDSA LRT station after
purchasing a token but while standing near the
platform, Navidad figured in an altercation with a
security guard. The parties then engaged in a fistfight
causing Navidad to fall on the LRT tracks as the train
was passing. With no evidence as to who instigated the
fight, is the LRTA or Prudent Security liable for
Navidad’s death?
A: LRTA is liable but not Prudent Security. Common
carriers are obligated by law to exercise utmost
diligence in relation to its passengers under all
circumstances. In the instant case, Navidad presented
himself as a passenger in the proper place and manner
to alight the LRT. In the absence of an explanation as to
how the accident occurred and measures it took to
prevent the accident, LRT is presumed negligent.
For Prudent, there was nothing presented to hold it
liable for negligence in the selection and supervision of
its employees.
4) In 1985, a passenger bus traversing Benguet
allegedly suddenly accelerated when passenger
Pedrito Cudiamat was trying to alight to its platform.
Thus, Cudiamat fell and was ran over by the bus’ rear
tires and instead of bringing the latter to the nearest
hospital, the bus driver first brought the other
passengers to their respective destinations. Can the
bus driver and conductor argue that they had no
knowledge that Cudiamat was alighting since he did
not manifest his intent to board the same?
A: NO. A public utility bus, once it stops, is in effect
making a continuous offer to prospective riders. In the
instant case, it was admitted that the bus was at a full
stop when Cudiamat alighted the same. When the bus
is not in motion, there is no necessity for a person to
signal his intention to board.
Moreover, it is not negligent for a prospective
passenger to board a vehicle that just started or was in
slow motion as common experience and ordinary
practice dictate that the driver and conductor would
be aware of alighting passengers.
5) Is a bus liable for the death of a child who had just
disembarked from the vehicle but who unknowingly
accompanied her father in retrieving their other
bayong, only for her skull to be crushed as the bus
moved while the bayong was being handed to her
father by the conductor?
A: YES. Jurisprudence has held that the carrier-
passenger relation does not cease at the moment the
passenger alights from the vehicle but continues until
the passenger has had a reasonable time and
opportunity to leave the carrier’s premises. Although
reasonable time and opportunity is contingent on the
circumstances, in the instant case, the driver did not
put off the engine although it was on a full stop and did
not wait for the conductor’s signal to continue. Even if
the contract of carriage has been terminated, the
driver may be held liable under A2180.
6) Anacleto Viana boarded M/V Antonia and 1 hour
after he had disembarked from the vessel, Viana went
back to point to his cargo that was to be unloaded by
Pioneer Stevedoring Corporation. While Viana was
pointing to his cargo, the Pioneer’s crane hit him and
pinned him between the side of the vessel and the
crane, causing his death by pneumonia and traumatic
fracture of the pubic bone. Is M/V Antonia liable?
A: YES. Carrier-passenger relation subsists until the
passenger has left the vessel’s dock or premises or
until the passenger had the reasonable opportunity to
leave the carrier’s premises. In the instant case, M/V
Antonia was still bound to Anacleto for the delivery of
his baggage and without showing of extraordinary
diligent measures to prevent Anacleto’s re-entry to the
vessel M/V Antonia should be liable.
- Doctrine of proximate cause is inapplicable to a
passenger since extraordinary diligence does away
with the burden to prove causation
 However, the common carrier may prove by way of
defense that the loss or damage cannot be traced to
any of its acts
 >> By proving he exercised extraordinary diligence or
that the cause are exempt from liability of a common
carrier under A1734 (natural disaster, act of public
enemy, act or omission of shipper or owner, character
of goods, order of competent authority)
- Under the doctrine of Last Clear Chance, when both
parties in an accident are negligent, negligence of one
will not be considered as the proximate cause if the
other had the last clear chance of avoiding injury.
 Negligence must not be merely contributory
 Not applicable in the case of passenger-carrier and
concurrent negligence of third party
A619 of the CCom: Ship captain and ultimately the ship
owner is liable for cargo from the time it is turned over to
him at the dock or afloat alongside the vessel, until he
delivers it on the shore or discharging wharf.
- Cargo being unloaded generally remain under the
custody of the carrier and it is the duty of the master of
vessel to unload and deliver with sound machinery and
competent hands
 That arrastre operator assisted in the unloading will
not excuse the carrier and the former may just be held
solidarily liable
- Goods remain to be the responsibility of the carrier if
they are with customs officials
 Parties may limit the liability of the carrier
considering that goods go through inspection
A1734: Common carriers are responsible for the loss,
destruction, deterioration, of goods, unless the same is due
to any of the following causes only: (NPACpO)
(1) Flood, storm, earthquake, lightning, or other Natural
disaster or calamity
(2) Act of Public enemy in war, international or civil
(3) Act or omission of shipper or owner of goods
(4) Character of goods or defects in the Packaging or
containers
(5) Order or act of competent public authority
A1742: Even if the loss, destruction, or deterioration of the
goods should be caused by the character of the goods or
faulty nature of the packing or of the containers, the
common carrier must exercise due diligence to forestall or
lessen the loss.
A1743: If through order of public authority the goods are
seized or destroyed, common carrier is not responsible,
provided public authority had power to issue the order.
- Following Articles delineate defenses in carriages of
goods in addition to exercise of extraordinary diligence
 List is exclusive
 Same list except for (4) on character of goods apply
to carriage of passengers
- Problem:
1) May a vessel, which damaged the wharf and
merchandise loaded on the deck posit the defense of
exercise of diligence of a good father?
A: NO as to the merchandise but YES with respect to
the damage to the wharf. The exercise of due diligence
is not available in breach of contract where negligence
is presumed the moment goods are damaged but is
available in quasi-delict cases. Hence, the owner of the
vessel may alleged due diligence in selecting and
supervising its employees against the owner of the
wharf. Owner of the wharf can go after the negligent
employee of the vessel.
- A fortuitous event must be established to be the
proximate cause of the loss to be a valid defense
-  Elements: (HAFA)
1) Cause is an unforeseen or unexpected occurrence
independent of human will
2) Cause was impossible to foresee or if foreseen, must
be impossible to avoid
3) Render it impossible for normal fulfillment of
obligation
4) Obligor must be free from any participation or
aggravation
A1739: In order that the common carrier may be exempted
from responsibility, the natural disaster must have been
the proximate and only cause of the loss. However, the
common carrier must exercise due diligence to prevent or
minimize loss before, during, and after the occurrence of
flood storm or other natural disaster to be exempted from
liability. Same duty is incumbent upon the common carrier
in case of an act of a public enemy.
- Fire is not considered a natural disaster or calamity
- Hijacking does not fall among the 5 exempting causes
 Yet jurisprudence has absolved common carriers
when thieves or robbers act with grave or irresistible
threat, violence, or force
- Damage or injury traced to mechanical defects are not
commonly caused by fortuitous events
 The manufacturer is considered as the agent or
servant of the carrier to whom the latter has recourse
>> Meanwhile, a passenger has no privity of contract
with manufacturer and former cannot directly sue the
latter unless, for tort or under the Consumer Act of PH
 Carrier may still claim mechanical defects as
fortuitous events but periodic and adequate tests must
first be proven
- Other invalid defenses:
 Tire blowouts
 Explosion caused by another cargo
 Worms or rats
 Water damage via a port insufficiently fastened
 Barratry or intentional fraud or breach of trust by
master or crew of a ship i.e. theft
- Problems:
1) Mauricio shipped a box of cigarettes to Naga via
Bicol Bus Company (BBC). Midway through the trip,
the bus developed engine trouble, which required
extensive repair for 2 days. While at the repair shop,
the cargo inside including Mauricio’s cigarettes got wet
due to a typhoon. Is BBC liable?
A: YES BBC is liable as the typhoon was foreseeable
and damage could have been prevented with
reasonable care.
2) Is a bus company liable for injuries sustained by a
passenger due to unknown persons throwing stones at
the windshield? How about a hold-up by armed
robbers in an Expressway?
 A: YES for the stone throwing as prior incidents makes
such a foreseeable event. NO for holdapers who
employed irresistible force.
3) Is a bus company liable for an isolated stone
throwing occurrence?
A: NO as carriers are not insurers of the absolute safety
of their passengers and the same was unforeseeable.
The degree of care when a contract is violated by
willful acts of strangers is just that of a good father.
4) Can 4 employees of the carrier claim force majeure
after being hijacked by 2 assailants with only 1 armed?
A: NO, the hijacking was not irresistible force to
overwhelm 4 employees.
5) Can a small trucking company with only 2 trucks
and chosen customers claim force majeure after 1 of its
delivery trucks was hijacked when the driver stopped
to visit his girlfriend?
A: NO. A common carrier is presumed negligent and
without an allegation as to grave or irresistible threat,
the truck company cannot be absolved.
6) SMC loaded 5.8 Million pesos of beer bottle cases to
M/V Peatheray and insured the same with PH
American General Insurance Co. After being cleared by
the coast guard, M/V Peatheray sunk and a surveyor
declared that the vessel was structurally sound with no
damages but the shifting of the vessel’s ballast water
caused the sinking. Can PH American successfully sue
M/V Peatheray?
A: NO. The vessel sank due to force majeure that was
unforeseen by the coast guard. The shifting of the
ballast water was caused by strong winds and huge
waves.
6) Is the carrier liable for an act of revenge wherein the
passengers were ordered to disembark for the 3 armed
men to burn the bus with its driver but eventually
killing an attorney pleading for the driver’s life? Is
there contributory negligence on the part of the
attorney who came back to retrieve things from the
overhead rack?
A: YES. The PH Constabulary had warned the bus’
operation manager that the assailants were planning
to burn their buses. Simply frisking the baggage of the
assailants would have prevented the altercation.
NO contributory negligence in an act that is of a Good
Samaritan.
7) Is the hijacking and air piracy of a PAL plane during
Martial Law causing the death of 10 passengers and 3
MNLF members, a fortuitous event?
A: YES. The fact that Martial Law was declared even
added to the circumstances that prevented PAL to
perform its obligation in a normal manner.
- Thieves, robbers, rioters, and insurrectionists are not
public enemies but are mere private operators
 Pirates, however, are considered enemies of all
civilized nations
 Only when rebels hold certain territory, have
declared independence, and regularly figure in armed
hostility may civil war be said to arise
- Natural disaster or act of the public enemy must be the
proximate and only cause of loss
- Carriage of Goods by Sea provides that carrier shall not
be liable for:
1) Wastage, loss, or damage arising from inherent
defect, quality, or vice of goods
2) Insufficiency of packing
3) Insufficiency of marks
4) Latent defects not discoverable by due diligence
A1742: Even if loss, destruction, or deterioration of goods
shall be caused by the character, faulty nature, or of the
containers of goods, common carrier must exercise due
diligence to forestall or lessen the loss.
- Defect: want or absence of something necessary for
completeness or perfection
- Inferior: poor quality or second rate
- Defense of defect in packaging would fail if there is no
proof that the defect came before the carrier accepted
the package
 Carrier must receive the goods under protest or
with reservation duly noted in the bill of lading
A1743: If through order of public authority, goods are
seized or destroyed, the common carrier is not
responsible, provided said public authority had power to
issue the order.
- Under the Carriage of Goods by Sea Act, the carrier or
ship shall not be responsible for loss or damage
resulting from arrest or restraint of princes, rulers, or
people, seizure under legal process, or quarantine
restrictions.
- Problems:
1) Gelacio Tumambing contracted Ganzon’s lighter to
haul 305 tons of scrap iron but the Mayor of Mariveles
demanded 5K from Tumambing for 5K. Tumambing
was shot and taken to the hospital and Acting Mayor of
Mariveles then ordered 3 policemen to dump the scrap
iron with the rest brought to a compound. Is Ganzon
exempt from liability?
A: NO. There was no fortuitous event as it was
incumbent upon Ganzon to prove that the Acting
Mayor of Mariveles had power to order the dump and
seizure. With also no proof of irresistible force, Ganzon
must be presumed liable.
Duty to Passengers
A1759: Common carriers are liable for the death or
injuries to passengers through negligence or willful acts of
the former’s employees, although such employees may
have acted beyond the scope of their authority or in
violation of the orders of the common carriers.
This liability of common carriers does not cease upon
proof that they exercised all diligence of a good father of a
family in the selection and supervision of their employees.
A1763: Common carrier is responsible for injuries suffered
by a passenger on account of willful acts or negligence of
other passengers or strangers, if employees of the common
carriers, through the exercise of diligence of a good father,
could have prevented or stopped the act or omission.
- Unlike in a quasi-delict, the carrier cannot escape
liability by claiming due diligence in selection and
supervision of employees
- 3 reasons for liability of common carriers:
1) Special undertaking to take full measure of
protection and highest degree of care
2) Common carrier confides in the employee the
performance of his contract to transport
3) Carrier has power to select and remove employees
- Doctrine of respondent superior: carrier is only liable
for an employee’s act within the scope of his authority
 Minority view
- Under the Code of Commerce, the captain shall be
civilly liable to passengers and third persons for all
thefts committed by his crew, with right of action
against the guilty party
 Modern law dictates that ship owner cannot be
made criminally liable for unlawful acts or quasi
crimes committed by the captain and crew BUT he is
liable to indemnify damage or injury caused
- Defense of respondeat superior is not available if
carrier’s driver allowed another person not an
employee to drive the vehicle
 There is still contractual breach even with
contributory negligence by other drivers
- In an action for damages filed by a passenger, it is no
defense on the part of the carrier that he exercised
diligence in selection and supervision of his driver
 Such diligence is only a part of the exercise of
extraordinary diligence
- Conditions for issuance of Certificate of Public
Convenience for PUVs imposed by the LTFRB:
1) PUV shall employ drivers, conductors, inspectors,
and other personnel who are courteous and of good
moral character
2) In no case shall a PUV operator employ any person
who has been convicted of homicide, serious PI, theft,
estafa, robbery, crimes against chastity unless with
LTFRB approval
3) PUV operators are prohibited from employing
drivers without valid professional driver’s license
4) PUV and drivers shall attend seminars on transport
management, road safety, and good driving habits
5) Before hiring drivers and conductors, PUV shall
subject them to orientation and rigid examinations
- Common carriers are also required to abide by the
2013 Anti-Drunk and Drugged Driving Act
- There is no unbending duty to inspect each and every
package brought inside a bus or jeep
 Depends on the circumstances
 Carrier is not liable for injury to passenger due to
fireworks declared as miscellaneous items by another
passenger
- Problems:
1) Is the taxi company liable for their driver who killed
a passenger?
A: YES. The killing took place in the course of duty of
said driver.
2) Is a railroad company responsible for the shooting
of a passenger by its off-duty guard using the gun
furnished by said company within its train station?
A: NO. The railroad company could not have
anticipated the shooting of its passenger by a guard
who held a personal grudge against the latter. Thus,
the shooting can be considered a fortuitous event.
Moreover, the shooting guard was off-duty and can be
considered a passenger awaiting transport as well.
*This decision was under the 1889 Civil Code, which,
unlike the present Civil Code, did not impose upon
common carriers the absolute liability for the safe of
passengers against willful assaults or negligent acts
committed by employees.
3) Bachelor Express picked up a passenger in Butuan
who suddenly stabbed a soldier that caused a
stampede of passengers trying to go out of the bus,
resulting to the death of 2 passengers. Police also killed
the assailant after running away from the bus. The
owners of the bus claimed that they are not liable for
the death of the 2 passengers who jumped off the bus
as their driver actually exercised due diligence and
transported the passengers safely to their destination.
What was the proximate cause of the loss? Can the
common carrier validly invoke fortuitous event?
A: The proximate cause was the sudden unforeseen act
of a passenger who stabbed another. However, mere
fortuitous event is not enough to absolve a common
carrier, which has to prove no negligence on its part. In
the instant case, the bus driver did not immediately
stop the bus at the height of the commotion, the bus
was still running as the passengers jumped of, and the
doors were not the ones mandated by law. Thus, the
common carrier failed to overcome the presumption of
fault and negligence.
A1744: Stipulation between common carrier and shipper
or owner limiting liability of former for loss, destruction,
or deterioration of goods to a degree less than
extraordinary diligence shall be valid, provided it be:
(a) In writing, signed by the shipper or owner
(b) Supported by a valuable consideration other than the
service rendered by the common carrier
(c) Reasonable, just, and not contrary to public policy
A1757: Responsibility of a common carrier for safety of
passengers as required in A1733 and 1755 cannot be
dispensed with or lessened by stipulation, by posting of
notices, by statements on tickets, or otherwise.
- Even a gratuitous or non-paying passenger should be
treated with extraordinary diligence
A1758: When a passenger is carried gratuitously,
stipulation limiting negligence is valid, but not for willful
acts or gross negligence.
Reduction of fare does not justify any limitation of
common carrier’s liability.
- Diligence owed to accommodation passengers or
invited guests is only ordinary diligence
Sec. 3 (1) of COGSA: Carrier shall be bound before and at
the beginning of the voyage to exercise due diligence to:
(a) Make the ship seaworthy;
(b) Properly man, equip, and supply the ship
(c) Make the holds, refrigerating, and cooling chambers,
and all other parts of the ship in which goods are carried,
fir and safe for their reception, carriage, and preservation.
(2) Carrier shall properly and carefully load, handle, stow,
carry, keep, care for, and discharge the goods carried.
Sec. 9 of Domestic Shipping Act: All vessels operate by
domestic ship operators shall at all times be in seaworthy
condition properly equipped with adequate life-saving,
communication, safety, and other equipment operated and
maintained in accordance with MARINA standards and
manned by duly licensed and competent crew.
MARINA shall have the power to inspect vessels and all
equipment on board to ensure compliance with safety
standards.
- Seaworthiness: strength, durability, and engineering
skill made part of ship’s construction and maintenance
which would withstand dangers of voyage
- IRR provides that all ships must be manned by duly
licensed and competent crew and shall comply with
qualification standards set by MARINA for seafarers
onboard its registered ships
- Shippers of goods or passengers are not expected to
inquire into a vessel’s seaworthiness or genuineness of
licenses considering the nature of transport business
 Burden of proof is on a carrier to prove that its ship
was seaworthy and presentation of certificate of
seaworthiness is not enough to overcome presumption
of negligence
- It may be inferred that to be seaworthy, a vessel must
have such degree of fitness which an owner exercising
extraordinary diligence would require with regard to
all probable circumstances
- Right and duty of carrier by sea to inquire as to the
general nature of articles shipped and of their value
before it consents to carry them
 Carrier has the right to rely on the fair
representation of the shipper with no duty to further
inquire into the genuineness of declarations
- Domestic Shipping Development Act of 2004 requires
compulsory insurance coverage for passengers and
cargo
 Under MARINA Rules, coverage must at least be
200K for each passenger with carrier liable to pay
200K if no insurance is maintained
>> An additional 50K insurance coverage for survivors
is also required
 Insurance should attach from the time the
passenger sets foot on the boarding ladder until he has
left the disembarking ladder
>> Insurance shall continue during the time the vessel
stays on intermediate ports so long as passenger stays
on board unless, he stays past his port of destination
S116 of Insurance Code: A ship is seaworthy when
reasonably fit to perform the service and to encounter the
ordinary perils of the voyage contemplated by parties
S118: Warranty of seaworthiness extends not only to the
condition of the structure of the ship itself but requires a
competent master, officers, appurtenances and equipment.
S121: Ship, which is seaworthy for purpose of insurance,
may, nevertheless, by reason of being unfitted to receive
cargo, be unseaworthy for the insurance of cargo.
- Cargoworthiness: vessel must be sufficiently strong
and equipped to carry the particular kind of cargo that
she has contracted to carry and same is safely loaded
- Carrier must not accept goods that cannot be
transported in the ship
- Even if damage was noted in the Bill of Lading, carrier
may still be held liable especially if it fails to prove
exercise of due diligence
A609 of CCom: Captains, masters, or patrons of vessels
must be Filipinos, have legal capacity to contract, and
prove the skill, capacity, and qualifications necessary to
command and direct the vessel, as established by marine
or navigation laws, ordinances, or regulations.
If owner of a vessel desires to be the captain without
having legal qualifications, he shall limit himself to the
financial administration and shall entrust the navigation to
a person possessing the qualifications required.
- Memorandum Circular No. 114 requires PH-registered
vessels duly documented to carry passengers shall
provide for emergency exits, storage of handcarried
luggage, storage of lifevests, closure of watertight
doors, wearing of prescribed uniform of crew
A359 of CCom: If there is an agreement between the
shipper and carrier as to the road over which conveyance
is to be made, carrier may not change the route, unless it
be by reason of force majeure and should he do it without
cause, he shall be liable for all losses the goods he
transports may suffer from any other cause, beside paying
the sum stipulated for such case.
When on account of said cause of force majeure, carrier
had to take another route that increased transportation
charges, he shall be reimbursed for such increase upon
formal proof thereof.
- Routes are now approved by appropriate government
agencies like the Maritime Industry Authority
 Cannot be changed without authorization
 Improper deviation may be a ground to deny a
marine insurance claim
>> No improper deviation when stop was for
replenishment of ship’s fuel
- Transshipment or taking cargo out of one ship and
loading in another without legal excuse is a breach of
contract even if vessels are owned by one carrier
A2185 of CC: There is a presumption of negligence in case
the accident occurs while the operator of a motor vehicle is
violating traffic rules.
- Not even necessary for common carriers as the same
requires proof of violation meanwhile, A1756 provides
that presumption of negligence arises upon proof of
death or injury to a passenger
- Common carriers by land are required to make sure
that their vehicles are roadworthy
Duty to Third Persons
- Pedestrians receive simultaneous benefit in the
exercise of extraordinary diligence by common carrier
 Entitled to safe and convenient use of roads
- It was ruled that duty of extraordinary diligence of
carrier extends even to members of its crew of carrier

A1754: Provisions of A1733-A1753 shall apply to
passenger’s baggage, which is not in his personal custody
or in that of his employee.
As to other baggage, rules in A1998 and A2000-A2003
concerning responsibility of hotelkeepers shall apply.
- Baggage: whatever articles a passenger usually takes
with him for his own personal use, comfort, and
convenience according to habits or wants of his class,
with reference to his immediate necessities or ultimate
purpose of his journey
- Checked-in baggage are governed by extraordinary
diligence
A1998: Deposit of effects made by travellers in hotels or
inns shall also be regarded as necessary. Keepers of hotels
or inns shall be responsible for them as depositaries,
provided that notice was given to them or their employees
of the effects brought by the guests and that they take
precautions, which hotelkeepers or their substitutes
advised relative to the care and vigilance of the effects.
A2000: Responsibility referred to in the two preceding
articles shall include loss of, or injury to the personal
property of guests caused by servants or employees of
hotels or inns as well as strangers; but not that which may
proceed from any force majeure. Fact that travellers are
constrained to rely on the vigilance of keeper of hotels or
inns shall be considered in determining the degree of care
required of him.
A2001: The act of a thief or robber, who has entered the
hotel is not deemed force majeure, unless it is done with
use of arms or through an irresistible force.
A2002: Hotelkeeper is not liable for compensation if loss is
due to acts of the guest, his family, servants, or visitors, or
if the loss arises from the character of the things brought in
to the hotel.
A2003: Hotelkeeper cannot free himself from
responsibility by posting notices to the effect that he is not
liable for the articles brought by the guest. Any stipulation
between the hotelkeeper and guest whereby the
responsibility of the former as set forth in A1998-A2001 is
suppressed or diminished shall be void.
- Problems:
1) X boarded a Pantranco bus that gave notice that the
carrier would not be liable for baggage brought in by
passengers. Thus, X kept his attaché case with $10K in
his custody. When passengers came back from having
lunch out, X’s attaché case was missing. A vendor told
X that a man picked the lock of the bus and took X’s
attaché case. What is Pantranco’s liability if any?
A: Pantranco may be held liable. Hand-carried luggages
are governed by rules on necessary deposits that
makes the depositary liable for loss of guests’ property
caused by strangers. With the loss not due to force
majeure or done with the use of arms or irresistible
force, Pantranco may be liable.
2) May a passenger who deposited his maleta to the
communal baggage compartment of buses without
declaring that he deposited such nor without paying
charges for the same, claim damages from the bus co.?
A: YES. The bus had the duty to exercise extraordinary
diligence over the baggage turned over. The fact that
the maleta was not declared and charges thereon were
not paid is not material in carriers for transport.
3) Antonio placed his hand carried bag beside the bus
driver’s seat for he had valuable items inside and
requested the driver to keep an eye on it as Antonio
had not slept for 24 hours. Can the common carrier be
liable for the staling of Antonio’s bag?
A: YES. Under A2000, the responsibility of depositary
shall include loss of property of guests caused by
strangers that do not proceed from force majeure.
A2001 considers act of thieves not force majeure
unless done with arms or through irresistible force.
*Alternative answer is absolution of the common
carrier as Antonio’s bag was not properly turned over.
A1741: If the shipper or owner merely contributed to loss,
destruction, or deterioration of goods, the proximate cause
being negligence of the common carrier, the latter shall be
liable in damages, which shall be equitably reduced.
A1761: Passenger must observe diligence of a good father
of a family to avoid injury to himself.
A1762: Contributory negligence of passenger does not bar
recovery of damages for his death or injuries, if proximate
cause thereof is the negligence of the common carrier but
the amount of damage shall be equitably reduced.
- To absolve itself from liability, the carrier may prove
that the only cause of loss of the goods are:
1) Failure of shipper to disclose nature of goods
2) Improper marking or direction as to destination
3) Improper loading when shipper assumes such
- A passenger who had round trip tickets with an expiry
date of 1 year cannot claim breach of contract when he
tried to use it after the expiration, although errantly
booked with the airlines’ agent
- Doctrine of Last Clear Chance may apply to a carrier
that could have prevented injury to a passenger who
placed himself in peril
 SC has overruled this application as the doctrine
only applies between colliding vehicles and cannot be
used where a passenger demands from a carrier
- In air travel, passengers assume risks of adverse
weather conditions or climate changes
 Risk is not assumed when passengers board a
vehicle or vessel filled to capacity
>> However, in a case where a stool was given for a
passenger to sit between the seats of a jeep, the fact
that the passenger accepted such seat cannot absolve
the jeep from the injuries the passenger took after the
jeep was hit by a truck
>> No assumption of risk by the fact that the carrier
posted notices against such liability
- Problems:
1) Can a bus company be absolved from liability on the
ground that passengers jeered its driver to overtake
other buses and the fact that notice of non-assumption
of liability was posted in the bus?
A: NO. As a common carrier, the bus company is
obligated to exercise utmost diligence in carry
passengers. A1757 expressly states that liability of
common carriers cannot be limited by stipulation or
posting notices. The jeering of passengers can only
mitigate the amount of damages they may claim.
2) Can a bus, running at a moderate speed, claim non-
liability for an accident caused by a counterflowing
pick-up truck that injured the arm of a bus passenger?
A: YES. In sudden emergencies, the common carrier’s
employees are expected to exercise such care as any
ordinary prudent person would exercise. More caution
argued by the plaintiffs cannot be expected from one
placed in a sudden predicament without enough time
to think things through. Moreover, appellant who
rested his left elbow on the windowsill assumed such
risk and is guilty of contributory negligence.
3) Can a construction company that errantly declared
the weight of its payloader at 2.5 tons instead of 7.5
tons it contracted Compania Maritima to ship still
claim damages?
A: YES. Contributory negligence of the shipper does
not absolve the carrier from liability. In the instant
case, the employees of Compania Maritima themselves
the laxity of the company in weighing cargo and in
checking the accuracy of information in bills of lading.
4) Is a railroad company liable for the lacerated arm its
employee suffered after riding the train for free and
slipping upon disembarking due to the platform being
dimly lit and a sack of watermelons placed by the
company on the platform?
A: YES. The negligence of the carrier was the proximate
cause without contributory negligence from the
plaintiff. The construction of the company’s platform,
the watermelons, and the lighting all contributed to the
injury.
5) Can Meralco claim non-liability for the operation of
moving cars which sudden jerking caused a
prospective passenger to slip and for the latter’s leg to
be crushed?
A: NO. The direct and proximate cause of the injury
was the sudden acceleration of the car with
contributory negligence on the passenger who
attempted to board a moving car not on the designated
terminal. Similar to the Last Clear Chance Doctrine, the
contributory negligence of a party cannot defeat an
action that could have been avoided if the carrier just
exercised extraordinary diligence.
CHAPTER 3: OBLIGATIONS OF PASSENGER AND SHIPPER
I. Contractual Obligation
II. Duty to exercise due diligence
- Carrier cannot impute the negligence of its own
employee to the person or entity that hired it
 Person who hires a public vehicle and merely gives
driver directions but exercises no other control is not
responsible for acts of negligence of the carrier
- Due diligence includes the duty to disclose information
relating to cargo to aid carrier in exercising proper
care and caution
- Shipper must also make proper markings on the cargo
A374 of CCom: Consignee to whom shipment was made
may not defer payment of transportation charges of the
goods they receive after 24 hours following their
delivery; in case of delay, carrier may demand the
judicial sale of goods in an amount necessary to cover
the cost of transportation and expenses.
- In carriage of passengers by sea, the carrier is bound
by the ‘no ticket, no boarding policy’
- Delayed voyage: late departure or arrival
- Unreasonable delay: lapse of time that prejudice
passengers or cargoes without just cause that is
solely attributable to the carrier
- Revalidation: accreditation of an unused ticket for
another voyage
A375: Goods transported shall be especially bound to
answer for costs of transportation and expenses and fees
incurred for them until the moment of their delivery.
This special right shall prescribe 8 days after delivery has
been made and once prescribed, carrier shall have no
other action than that corresponding to him as ordinary
creditor.
- 8-day prescriptive period is deemed modified by
A2241 (9) of CC giving preference to credits for
transportation of goods until their delivery and for 30
days thereafter
- Shipper must make sure that the goods are delivered
to the carrier on the date, time, and place agreed upon
 Shipper cannot insist on tendering goods that are in
excess of the number, weight, and quantity stipulated
 Consignee must timely obtain delivery after the
carrier gives notice of arrival of goods
>> Consignee must present the bill of lading to the
captain before unloading or obliging the latter to
unload cargo
- Demurrage: compensation stipulated for in the
contract for the detention of vessel beyond the time
agreed for loading and unloading
 Claim for damages for failure to accept delivery
- Passenger or shipper may also be required to secure
necessary permits and clearances
- Shipper’s load and count: shipper has the sole
responsibility for the quantity, description, and
condition of cargo shipped in container vans
 Carrier is no longer required to check and inventory
the contents and carrier cannot be held responsible for
any discrepancy if the description in the bill is different
from its actual contents
III. Duties of Passenger
- Pay proper fare at the right time
- Present himself in the proper place at proper time
- Not to bring excess luggage or prohibited materials
- Secure appropriate travel documents
- Take ordinary care of his concerns
 Airline was held liable for breach of its obligation
due to loss of documents of minors due to the
negligence of its employees
- Civil Aviation Regulations:
1) No person on board may interfere with a
crewmember in the performance of his duties
2) Each passenger shall fasten his or her seatbelt and
keep it fastened while sign is lighted
3) No person shall recklessly or omit to act in such a
manner as to endanger the aircraft or persons and
property therein
4) No person may secrete himself or herself nor
secrete cargo on board
CHAPTER 4: DEFENSES OF THE COMMON CARRIER
- Carrier is not an insurer of passengers’ safety or of the
goods that it is transporting
- Kinds of defenses:
1) Completely bars recovery
2) Mitigate or limit recovery
- There are defenses expressly recognized and expressly
prohibited by the Civil Code
- Doctrine of proximate cause is inapplicable to a
contract of carriage since presumption of negligence
arises upon the happening of accident causing loss
 However, carrier may use absence of causal
connection or that it exercised extraordinary diligence
A1374: Common carriers are responsible for the loss,
destruction, or deterioration of the goods, unless, the same
is due to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other natural
disaster or calamity
(2) Act of public enemy in war, whether national or civil
(3) Act or omission of the shipper or owner of the goods
(4) Character of the goods or defect in the packing or in the
containers
(5) Order or act of competent public authority
A1742: Even if loss, destruction, or deterioration of goods
should be caused by the character of goods, or faulty
nature of the packing or the containers, common carrier
must exercise due diligence to forestall or lessen the loss.
A1743: If through the order of public authority the goods
are seized or destroyed, common carrier is not
responsible, provided said public authority had power to
issue the order
- No other defense may be raised by the common carrier
in the carriage of goods as the list is exclusive
 Defense of exercise of due diligence in the selection
or supervision of employees available in tort is not
available in breach of contract of carriage
- With respect to carriage of passengers, it is believed
that defenses above equally apply except for #4 on
packing/ containers
 But the primary defense in the transport of
passengers is still extraordinary diligence
- Fortuitous event, to be a valid defense, must be
established as the proximate cause of the loss
 Elements- (IIFF)
1) Cause of the unforeseen and unexpected occurrence
or failure of debtor to comply with his obligation must
be Independent of human will
2) Must be Impossible to foresee or if foreseen, it must
be impossible to avoid
3) Renders Fulfillment of the obligation in a normal
manner impossible
4) Obligor must be Free from any participation or
aggravation
 Under A1174 on fortuitous events, no person shall
be responsible therefor except in cases expressly
specified by law, or by stipulation, or nature of the
obligation requires assumption of risk
- Fortuitous events are not limited to natural calamities
and may involve events with human intervention
A1739: In order that the common carrier may be exempted
from responsibility, the natural disaster must be the
proximate and only cause of the loss. However, the
common carrier must exercise due diligence to prevent or
minimize loss before, during, and after the occurrence of
flood, storm, or other natural disaster in order that the
common carrier may be exempt from liability for loss,
destruction, or deterioration of goods. Same duty is
incumbent upon the common carrier in case of an act of
public enemy referred in A1734 (2).
- Fire is not considered a natural disaster or calamity
that is a valid defense of the common carrier
 Crew that did not conduct regular inspections and
only checked the hatches of the cargo after 24 hours
failed to exercise extraordinary diligence
 Fire from an unchecked crack in the fuel tank of the
vessel cannot be a fortuitous event
- According to PAGASA, a storm has the wind force of 55
to 63 mph
 But strong winds alone does not constitute a storm
- Hijacking does not fall among the five categories
exempting a common carrier from liability
 When 3 of 5 hold-uppers were armed in hijacking a
milk truck, the same is beyond the control of the
common carrier
 Hijacking by hearsay affidavits is not sufficient to
hold the common carrier liable
- Mechanical defects cannot absolve the common carrier
from liability when it appears that the defect would
have been discovered with reasonable care
 Rationale is that the passenger does not have choice
or control over the equipment the carrier uses with no
remedy against the manufacturer
>> Carrier has a privity of contract with the
manufacturer and can sue the same
>>> TBA: absence of privity of contract does not
preclude passenger from suing the manufacturer
under Art. 97 of the Consumer Act of the PH.
 Yet, there may be exceptional cases when the
carrier is free from liability due to force majeure upon
proof of extraordinary diligence like periodical testing
and adequate inspections
 Tire blowouts are mechanical defects with no proof
that the accident was caused by road conditions
- Common carrier cannot invoke other invalid defenses
like explosion, presence of worms and rats, water
damage, and barratry (intentional fraud by master or
crew)
- An act of a public enemy is a defense that is available
to a common carrier not only under the Civil Code but
also under the Carriage of Goods by Sea Act
 Term ‘public enemy’ presupposes an actual state of
war referring to the government of a foreign nation
>> Thieves, rioters, robbers, and insurrectionists are
not in a legal sense classed as public enemies but are
mere private operators
 Pirates on the high seas are deemed enemies of all
civilized nations
 State against which the country is at war is the
country of the common carrier
  A1734 provides for civil war, thus, an act of rebels
holding a portion of territory, when they have declared
independence and allegiance can constitute a defense
- COGSA provides that the carrier shall not be liable for:
(1) Wastage in bulk or weight or any other loss or
damage arising from inherent defect, quality, or vice of
goods
(2) Insufficiency of packing
(3) Insufficiency or inadequacy of marks
(4) Latent defects not discoverable by due diligence
 Defect: want or absence of something necessary for
completeness or perfection
 Inferiority: poor quality, mediocre, or second-rate
 Applied in cases where soybean meals that
decreased in weight doe to loss of moisture or when
wooden crate of goods collapsed upon hoisting
 Carrier must prove defect existed upon acceptance
 If carrier accepted the goods knowing of improper
packaging, it is not relieved from liability since it
issued a clean bill of lading
- The order of an acting mayor was not considered a
valid order of a public authority who was not duly
authorized
 Carrier must establish authority
 COGSA provides that the carrier shall not be
responsible for loss or damage resulting from arrest or
restraint of princes, rulers, or people or seizure under
legal process and from quarantine restrictions
A1759: Common carriers are liable for the death of or
injuries to passengers through the negligence or willful
acts of the former’s employees, although such employees
may have acted beyond the scope of their authority or in
violation of the orders of the common carriers.
This liability does not cease upon proof that they exercised
all the diligence of a good father of a family in the selection
and supervision of their employees.
- 3 reasons why carrier is liable for its employees’ acts:
1) Contract of carriage requires full measure of
protection and highest degree of care
2) Carrier delegates its duty to safely transport to its
employees
3) Carrier has power to select and remove employees
- Doctrine of respondeat superior: carrier is liable only
when employee acts within the scope of his authority
 Minority view
- Willful acts of the employees include theft
 Code of Commerce provides that the captain shall
be civilly liable to passengers and third persons for all
thefts committed by the crew
>> Reinforced by the Civil Code duty of extraordinary
diligence
A1763: A common carrier is responsible for injuries
suffered by a passenger on account of the willful acts or
negligence of other passengers or of strangers, if common
carrier’s employees through the exercise of diligence of a
good father of a family, could have prevented or stopped
the act or omission.
- Defense that death or injury was caused by a third
person is not available if carrier’s driver allowed a
non-employee to drive
 Jeep speeding up to irritate an overtaking truck,
which already honked to indicate its intent, was
negligent
>> Negligence of the carrier need not be the sole cause
of the damage or injury to the passenger of goods as
there is still contractual breach if carrier’s negligent act
concurs with another person’s
- If the act or omission of the shipper or owner of the
goods or passenger is the proximate and only cause of
the damage, common carrier is not liable
A1741: If shipper or owner merely contributed to the loss,
destruction, or deterioration of the goods, the proximate
cause thereof being the negligence of the common carrier,
the latter shall be liable in damages, which however, shall
be equitably reduced
- Contributory negligence: conduct on the part of the
injured party contributing as a legal cause to the harm
he has suffered
A1761: Passenger must observe the diligence of a good
father of a family to avoid injury to himself.
A1762: Contributory negligence of the passenger does not
bar recovery of damages for his death or injuries, if the
proximate cause thereof is negligence of common carrier,
but the amount of damage shall be equitably reduced.
- Carrier may prove that the only causes of the loss are
following and overcome presumption of negligence:
1) Failure of shipper to disclose nature of the goods
2) Improper marking or direction as to destination
3) Improper loading when shipper assumes such
responsibility
- Doctrine of avoidable consequences: even if carrier is
liable, passenger must lessen damage or injury to him
 Passengers must take such risks incidental to the
mode of travel like climactic changes in air travel
>> A student who took an extension seat in a jeep filled
to capacity cannot be said to have assumed a greater
risk wherein the jeep was improperly parked
 No assumption of risk by mere fact that the carrier
posted notices against liability
- Doctrine of last clear chance: when both parties
involved in an accident were negligent, the negligence
of the party will not be considered the proximate cause
if the other had the last clear chance of avoiding injury
 Negligence of party not merely contributory but an
efficient intervening cause
 Doctrine cannot be used by carriers in claims by
passengers
- Under A1170 of the CC, those who, in the performance
of their obligation, are guilty of fraud, negligence, or
delay and those who in any manner contravene the
tenor of the obligation are liable for damages.
 Requisites:
1) Existence of perfected contract
2) Breach thereof by the other contracting party
3) Damages was sustained due to the breach
4) Action filed within the prescriptive period
A366 of CCom: Within 24 hours following receipt of the
merchandise, the claim against the carrier for damage or
average be found therein upon opening the packages, may
be made, provided that the indications of the damage or
average which gives rise to the claim cannot be ascertained
from the outside part of such packages, in which case, the
claim shall be admitted only at the time of receipt.
After periods mentioned have elapsed, or transportation
charges have been paid, no claim shall be admitted against
the carrier with regard to the condition in which the goods
transported were delivered.
- If damage is apparent or ascertainable from outside of
packages, damages must be filed immediately
- Filing a claim with the carrier within 24 hours is a
condition precedent for enforcement or accrual of a
right of action for damages
 In filing the complaint, shipper or consignee must
allege and prove fulfillment of condition precedent
- Parties may also stipulate conditions precedent and
even provide a shorter period
 Also, parties may stipulate a fixed amount that may
be recovered by the shipper
- Purpose is to give carrier an opportunity to ascertain
whether a claim is well-founded and to conduct an
investigation of a claim
- Period does not run until consignee has possession
that he may exercise ordinary control over it
- Applicable to coastwise shipping (within PH)
 Not applicable to mis-delivery of goods
- Carrier may waive the requirement that there must be
a notice of claim
 Deemed waived if defendant failed to plead this
defense in its Answer and can no longer be raised for
the first time at trial or on appeal
A367: If doubts and disputes should arise between the
consignee and the carrier with respect to the condition of
the goods transported at the time of delivery, the goods
shall be examined by experts appointed by the parties and
in case of disagreement, by a third one appointed by the
judicial authority, the results to be reduced to writing; and
if the interested parties should not agree with the expert
opinion and they do not settle their differences, the
merchandise shall be deposited in a safe warehouse by
order of the judicial authority, and they shall exercise their
rights in the manner that may be proper.
Sec. 3 (6) of the COGSA: Unless notice of loss or damage
and the nature of such loss or damage be given in writing
to the carrier or his agent at the port of discharge or at the
time of the removal of the goods into the custody of the
person entitled to delivery thereof under the contract of
carriage, such removal shall be prima facie evidence of
delivery. If the loss or damage is not apparent, the notice
must be given within 3 days of delivery.
Said notice of loss or damage may be endorsed upon the
receipt for the goods given by the person taking delivery.
Notice in writing need not be given if the state of the goods
has at the time of their receipt been the subject of a joint
survey or inspection.
In any event, the carrier and the ship shall be discharged
from all liability in respect of loss or damage unless suit is
brought within 1 year after delivery or date when goods
should have been delivered: Provided, That if notice of loss
or damage, either apparent or concealed, is not given, that
fact shall not affect or prejudice the right of the shipper to
bring suit within 1 year after delivery or date when goods
should have been delivered.
In the case of any actual or apprehended loss or damage,
the carrier and receiver shall give all reasonable facilities
to each other for inspecting and tallying the goods.
- If damage is apparent, claim must be filed immediately
 If damage is not apparent, claim must be filed
within 3 days from delivery
>> But failure to file a notice of claim will not bar
recovery in international carriage of goods by sea
- With no specific provision in land transportation and
coastwise shipping, the 6-year prescriptive period if
there is no written contract or 10 years if there is a
contract apply to actions for damages
- ‘Carriage of goods’ covers the period when the goods
are loaded to the time when they are discharged from
the ship
 Does not cover time when goods have been
discharged from the ship and given to the custody of
the arrastre operator
>> Thus, arrastre operator may not invoke 1-year
prescriptive period
- Extrajudicial demand does not suspend the 1-year
prescriptive period
- Does not apply to conversion or misdelivery as the
provision only covers loss
 Loss: when a thing perishes, goes out of commerce,
or disappears in such a way that its existence is
unknown or it cannot be recovered
 Period applicable is 10 years for breach of written
contract or 4 years for quasi-delict
- Period does not apply to cases of delay
- 1-year period apply to collisions
- Period may be extended by agreement of parties
- An insurer who is exercising its right of subrogation is
also bound by the 1-year prescriptive period
 But claim against insurer for insurance proceeds is
based on contract that prescribes in 10 years
- Under the Warsaw Convention, the complaint or claim
against the carrier must be filed within 3 days from
receipt of the baggage or 7 days in case of goods
 Notice of claim is a condition precedent
 Prescriptive period is 2 years from the date of
arrival at the destination or date the aircraft ought to
have arrived, or from the date transport stopped
CHAPTER 5: BILL OF LADING AND OTHER FORMALITIES
- A contract of carriage is not a formal contract
- A bill of lading or ticket is not necessary for the
perfection of a contract of carriage
A354 of CC: In the absence of a bill of lading, disputes shall
be determined by the legal proofs, which parties may
present in support of their respective claims, according to
general provisions in this Code for commercial contracts.
- Modified by Civil Code as primary governing law with
Code of Commerce applying suppletorily
- Electronic Commerce Act provides that data messages
or electronic documents may be used in lieu of written
papers
- LTFRB conditions for issuance of Certificate of Public
Convenience for PUVs include the requirement that all
PUB and taxi operators shall issue tickets/receipts to
passengers in accordance with BIR requirements
 Exact amount of fare collected and the points of
embarkation and destination shall be clearly indicated
>> No requirement imposed on jeeps
- Bill of Lading: written acknowledgment, signed by the
master of the vessel or authorized agent of the carrier,
that he has received the goods to be transported on the
express terms, to the described place, and to the
designated consignee or parties
 Comprehends all forms of transport like freight
tickets of bus companies
>> If it contains an acknowledgment by the carrier of
receipt of goods for transportation, it is, in legal effect,
a bill of lading
- Kinds:
1) Negotiable/ Non-negotiable
2) Clean (one that does not contain any notation
indicating defects) /Foul
3) On Board (states that the goods have been received
on board the vessel; shipment is as good as on its
way) /Received for Shipment (states that the goods
have been received for shipment with or without
specifying the vessel by which the goods are shipped;
issued when there is insufficiency of shipping space)
4) Spent- when carrier already delivered but did not
retrieve the covering bill of lading he issued
5) Through- one issued by a carrier who is obliged to
use the facilities of other carriers to transport goods
from the city of the seller to the city of the buyer
 The second and other interested carriers who do
not issue their own bill honors bill
6) Custody- carrier already received the goods but
vessel has yet to arrive at the port
7) Port- vessel indicated in the bill to transport the
goods is already in the port
- Nature of a Bill of Lading in carriage of goods:
a) Receipt- by carrier of goods
b) Contract- stipulates rights and obligations assumed
by parties
 Recites the date and place of shipment, quantity,
weight, dimensions, identification marks, condition,
value, and quality of goods
 Names contracting parties, fixes routes,
destinations, rates
c) Title
- Nature of Bill of Lading as a contract applies to tickets
issued to passengers
 Name given to a bill is not important ex. Shipping
receipts or forwarders receipts
- Bill of Lading usually becomes effective upon its
delivery to and acceptance by the shipper
- It is presumed that the stipulations are known to the
shipper and he is generally bound by his acceptance
- Consignee, although not a signatory to the contract of
carriage, becomes a party to the Bill by reason of:
a) Agency between consignee and shipper
b) Acceptance of Bill
c) Availment of stipulation pour autrui
- Bills of Lading and tickets constitute a class of
contracts of adhesion that should be liberally
construed in favor of the passenger or shipper
 Courts cannot ignore monopolies, cartels, and
concentration of capital that may impose prepared
take it or leave it agreements
A24 of CC: In all contractual property or other relations,
when one of the parties is at a disadvantage on account of
his moral dependence, ignorance, indigence, mental
weakness, tender age, and other handicap, the courts must
be vigilant for his protection.
- Jurisprudence has held that plane tickets are contracts
not entirely prohibited and parties who adheres gives
their consent
 Parties cannot escape liability by adverting to the
Bill of Lading as a contract of adhesion
- Bills of Lading are covered by the parol evidence rule
 Parol evidence rule- terms of a contract are
rendered conclusive upon the parties and evidence
aliunde is not admissible
>> Based on the logic that parties include all matters in
writing
>> An exception to the parol evidence rule is when
there is a mutual mistake of fact between the parties
A353: Legal evidence of the contract between shipper and
carrier shall be the bills of lading, by the contents of which
the disputes which may arise regarding their execution
and performance shall be decided, no exceptions being
admissible other than those of falsity and material error in
the drafting.
After the contract has been complied with, the bill of lading
which the carrier has issued shall be returned to him, and
by virtue of the exchange of this title with the thing
transported, the respective obligations and actions shall be
considered cancelled, unless in the same act the claim
which the parties may wish to reserve be reduced to
writing, with the exception of that provided in A366.
In case the consignee, upon receiving the goods, cannot
return the bill of lading subscribed by the carrier, because
of its loss or of any other cause, he must give the latter a
receipt for the goods delivered, this receipt producing the
same effects as the return of the bill of lading.
A709 of CCom: A bill of lading drawn up shall be proof as
between all those interested in the cargo between the
latter and the insurers, proof to the contrary being
reserved for the latter.
- A710 of CCom posit that if bills of lading are
contradictory and no erasure can be observed, those
possessed by the shipper or consignee signed by the
captain shall be proof against the captain or ship agent;
and those possessed by the captain or ship agent
signed by the shipper shall be proof against the
shipper or consignee
- Cause or consideration of the contract of carriage is the
fare paid
 The object is transportation of passengers
- A Bill of Lading is an actionable document in a case
where the shipper enforces a contractual obligation
 Must be properly pleaded as a cause of action or
defense and genuineness and due execution is deemed
admitted unless specifically denied under oath
>> Failure to deny genuineness and due execution
amounts to a judicial admission
- Inadequacy of property law caused merchants to
develop shipment terms to regulate rights of parties
 F.O.B (Free on board)- seller assumes risk until the
F.O.B point
>> F.O.B point of destination or F.O.B. Surigao
 F.A.S (Free alongside)- seller relinquishes the risk
the moment goods are delivered alongside the vessel
>> In F.A.S Vessel, the seller is under no obligation to
see to the loading and delivery to the wharf
>> In F.O.B Vessel, seller must see to it that goods are
loaded and his responsibility does not cease until then
 C.I.F (Cost, Insurance, Freight)- price quoted by
seller includes invoice price plus insurance and freight
>> Seller completes his performance by procuring the
bill of lading, insurance policy, and invoice and
forwarding them to the buyer
>> Insurance is payable to the buyer
- The general rule under A1523 of the CC is that delivery
to the carrier is delivery to the buyer
 Upon delivery to carrier, risk of loss falls on the
buyer according to the principle of res perit domino
>> However, parties may stipulate F.O.B destination
wherein the seller retains the risk even if goods are
with the carrier
- Under A1503 of CC, ownership over goods are not
transferred to the buyer even if goods are already
delivered to the carrier if the bill provides that goods
are deliverable to the seller or his agent
- Other terms that are widely accepted have been
labeled International Commercial Terms or ‘Incoterms’
published in the International Chamber of Commerce
 EXW or Ex Works- seller has goods available for
pick up by the buyer in the seller’s premises
A350 of CC: Shipper and carrier of merchandise or goods
may mutually demand that a bill of lading be made, stating:
(SCODTDPPI
1) Name, surname, and residence of shipper
2) Name, surname, and residence of carrier
3) Name, surname, and residence of person to whom or
whose order goods are to be sent or whether they are to be
delivered to the bearer of said bill
4) Description of goods with a statement of their kind,
weight, and of external marks or signs of the packages in
which they are contained
5) Cost of transportation
6) Date shipment is made
7) Place of delivery to the carrier
8) Place and time delivery to consignee shall be made
9) Indemnity to be paid by carrier in case of delay, if there
should be any agreement on this matter
A351: In transportation made by railroads or other
enterprises subject to regulation rate and time schedules,
it shall be sufficient for the bills of lading or declaration of
shipment furnished by the shipper to refer, with respect to
the cost, time, and special conditions of the carriage, to the
schedules and regulations the application of which he
requests; and if shipper does not determine the schedule,
the carrier must apply the rate of those which appear to be
the lowest, with the conditions inherent thereto, always
including a statement or reference to in the bill of lading
which he delivers to the shipper.
A352: The bills of lading or tickets may be diverse, some
for persons and others for baggage; but all of them shall
bear the name of the carrier, date of shipment, points of
departure and arrival, cost, and with respect to baggage,
the number and weight of the packages, with such other
manifestations necessary for easy identification.
Maritime Commerce
- A706 of CCom provides for information that must be
included in a bill of lading
- A707: Four true copies of the original bill of lading
shall be made and the captain and shipper shall sign all
of them. Of these, the shipper shall keep one and send
another to the consignee
- Under COGSA, after the carrier shall issue to the
shipper a bill of lading
 Bill shall indicate loading marks, the number of
packages or weight, condition
Electronic Documents
- E-Commerce Act now allows issuance of tickets in the
form of electronic documents
Prohibited and Limiting Stipulations
- 3 usual kinds of limiting stipulations in a Bill of Lading:
1) Exempting carrier from any and all liability
2) Providing an agreed valuation
3) Agreed valuation is subject to shipper’s declaration
of a higher value and payment of a higher freight
 1 and 2 are void for being against public policy
while 3 is valid and enforceable
A1745 of CC: Any of the following or similar stipulations
shall be considered unreasonable, unjust and contrary to
public policy:
(1) That the goods are transported at the risk of the owner
or shipper;
(2) That the common carrier will not be liable for any loss,
destruction, or deterioration of the goods;
(3) That the common carrier need not observe any
diligence in the custody of the goods;
(4) That the common carrier shall exercise a degree of
diligence less than that of a good father of a family, or of a
man of ordinary prudence in the vigilance over the
movables transported;
(5) That the common carrier shall not be responsible for
the acts or omission of his or its employees;
(6) That the common carrier's liability for acts committed
by thieves, or of robbers who do not act with grave or
irresistible threat, violence or force, is dispensed with or
diminished;
(7) That the common carrier is not responsible for the loss,
destruction, or deterioration of goods on account of the
defective condition of the car, vehicle, ship, airplane or
other equipment used in the contract of carriage.
A1746: 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.
A1747: 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.
A1748: An agreement limiting the common carrier's
liability for delay on account of strikes or riots is valid.
A1749: A stipulation that the common carrier's liability is
limited to the value of the goods appearing in the bill of
lading, unless the shipper or owner declares a greater
value, is binding.
A1750: Contract fixing the sum that may be recovered by
the owner or shipper for 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.
- The purpose of limiting stipulations in the Bill of
Lading is to protect the common carrier
 Common carrier can take appropriate measures like
procuring insurance to protect itself when a shipper
undervalues his goods
A1752: Even when there is an agreement limiting the
liability of the common carrier in the vigilance over goods,
the common carrier is disputably presumed to have been
negligent in case of their loss, destruction, or deterioration.
- Parties cannot stipulate to totally exempt the carrier
from exercising any degree of diligence or anything
less than the diligence of a good father of a family
- Under A1744 of the CC, parties may stipulate that the
diligence to be exercised by the common carrier in the
carriage of goods be less than extraordinary diligence
provided:
1) Stipulation be in writing signed by the parties
2) Stipulation be supported by valuable consideration
other than the service rendered by the common carrier
3) Stipulation be reasonable, just, and not contrary to
law
- A1750 allows parties to stipulate amount that may be
recovered which requires that it be reasonable and
just and freely agreed upon
A1757: The responsibility of a common carrier for safety of
passengers as required in A1733 and A1755 cannot be
dispensed with or lessened by stipulation, by posting
notices, by statements on tickets, or otherwise.
- Stipulation whether a stipulation is just or reasonable
depend on the prevailing circumstances
A1751: Fact that the common carrier has no competitor
along the line or route, or part thereof, to which the
contract refers shall be taken into consideration on the
question of whether or not a stipulation limiting the
common carrier’s liability is reasonable, just, in
consonance with public policy.
- A1748 allows limitation of liability of carriers for delay
on account of strikes or riots
Sec. 4 (5) of COGSA: Neither the carrier 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 exceeding $500 or in case of goods not shipped in
packages, per customary freight unit, or the equivalent of
that sum in other currency, unless the nature and value of
such goods have been declared by the shipper before
shipment and inserted in the bill of lading. This
declaration, if embodied in the bill of lading, shall be prima
facie evidence but shall not be conclusive on the carrier.
By agreement between the carrier, master, or agent of the
carrier, and the shipper, another max amount may be
fixed: Provided, that such maximum shall not be less than
the figure above named. In no event shall the carrier be
liable for more than the amount of damage actually
sustained.
Neither the carrier nor the ship shall be responsible in any
event for loss or damage to the transportation of goods if
the nature or value thereof has been knowingly and
fraudulently misstated by the shipper in the bill of lading.
- A package may be cartons or even 1 coil
- Carrier cannot invoke the limiting stipulation in
carriage of goods when:
1) Agreement limiting liability is annulled by the
shipper or owner if the common carrier refused to
carry the goods, unless former agreed to such
stipulation
2) Carrier delays in the transport of goods
3) Carrier changes the stipulated or usual route
- US and PH Jurisprudence has held that issuance of a
bill of lading carries the presumption that goods were
delivered to the carrier for immediate shipment
- ‘Said to weight’ clause: nobody knows the actual
weight of cargo with the weight written on the bill of
lading based only on the declaration of the shipper
 Material to the presumption of negligence since
shipper must first prove the allege loss
A1507: A document of title in which it is stated that the
goods referred to therein will be delivered to the bearer or
to the order of any person named in such document is a
negotiable document of title.
- Words of negotiability makes an instrument negotiable
even if the words not-negotiable are placed thereon
A708 of CCom: Bills of lading issued to bearer and sent to
the consignee shall be transferable by actual delivery of
the instrument; and those issued to order, by virtue of an
endorsement.
In either case, the person to whom the bill of lading is
transferred shall acquire all the rights and actions of
the transferor or endorser with regard to the
merchandise mentioned in the same.
CHAPTER 6: ACTIONS AND DAMAGES IN CASE OF
BREACH
- Culpa-contractual is a separate and distinct source of
obligation from culpa-aquilana
 In culpa-contractual, the source of obligation is the
contract and the source of liability is breach of contract
to exercise extraordinary diligence
>> Liability was direct and immediate as opposed to
culpa-aquilana where the source of obligation is quasi-
delict which may be rebutted by proof of due care in
selection and supervision of employees
- In culpa-contractual, the employee is not liable for
having no privity of contract with the injured
 In culpa-aquilana, the employee is solidarily liable
with the employer
- In culpa-contractual, liability of the employer is in his
capacity as a contracting party
 In culpa-aquilana, his liability arise from being an
employer
- The same act that breaches a contract may give rise to
liability as a quasi-delict
 For the employee directly responsible, his liability
may arise from the delict or criminal liability (culpa
delictual) and quasi-delict (culpa aquilana)
>> Employee may be captain, officer, or crew
>> Employer is subsidiarily liable
- If negligence of third persons concurs with breach,
third person is liable on quasi-delict and the drivers
and owners of the vehicles involved are severally liable
for damages
 If owner or driver of the other vehicle is not
impleaded, carrier may implead them by filing a third
party complaint
>> Plaintiff may allege alternative causes of action like
breach of contract and quasi-delict against several
parties so long as there is no double recovery
- Mandatory insurance of common carriers are for
easier recovery of damages
- In culpa contractual, the elements of the cause of
action of passenger or owner are:
1) Right under the contract
2) Obligation under the contract
3) Violation or breach of contract that need not be
proven so long as the contract and the damage or
injury is proven
A2201 of CC: In contracts and quasi-contracts, damages for
which the obligor who acted in good faith is liable shall be
the natural and probable consequences of the breach of the
obligation, and which the parties have foreseen or could
have reasonably foreseen at the time the obligation was
constituted.
In case of fraud, bad faith, malice, or wanton attitude, the
obligor shall be responsible for all damages reasonably
attributed to non-performance of the obligation.
- Carrier is in ‘bad faith’ if there is gross negligence
- Carrier made liable for damages due to loss or damage
of goods has the right of recourse against the employee
who committed the negligent, intentional, or
fraudulent act
- Damages: pecuniary compensation, recompense, or
satisfaction for an injury sustained that the law
imposes for breach of duty or violation of rights
 Kinds of damages: (MANTLE)
1) Moral
2) Actual or compensatory
3) Nominal
4) Temperate or moderate
5) Liquidated
6) Exemplary or corrective
>> In MNTLE, no proof of pecuniary damage is needed
>> In MNTE, it is left to the discretion of court
 Under A2200, indemnification for damages shall
comprehend not only the value of actual loss suffered
but also the profits failed to be obtain
A2205: Damages may be recovered:
1) For loss or impairment of earning capacity in cases of
temporary or permanent personal injury
2) For injury to the plaintiff’s business standing or
commercial credit
- Damages cannot be presumed and courts must specify
facts that serve as basis for measuring compensatory
or actual damages
 Burden of proof rests on the plaintiff who is
claiming actual damages
A372 of CCom: The value of goods the carrier must pay in
cases of loss or misplacement shall be determined in
accordance with that declared in the bill of lading, the
shipper not being allowed to present proof that there were
articles of greater value and money.
Horses, vehicles, vessels, equipment and all other principal
and accessory means of transportation shall be especially
bound in favor of the shipper, although with respect to
railroads, said liability shall be subordinated to provisions
of laws of concession with respect to property, and to what
this Code established as the manner and form of effecting
seizures and attachments against said companies.
- In international carriage of goods, the COGSA provides
that the carrier or ship shall not be liable for any loss
or damage in amount exceeding $500 per package or
per customary freight unit, unless the nature and value
of goods have been declared in the bill of lading
 Plaintiff is entitled to the value of his goods at the
time of destruction
>> Usually market value
- In case of personal injury and even death, the claimant
is entitled to all medical and reasonable expenses that
he incurred to treat his injuries
 Includes plastic surgery or expenses for the wake
and funeral
>> Does not include expenses after burial such as 40 th
day or death anniversary
A2206: Damages for death caused by a crime or quasi-
delict shall be at least 3K even though there may have been
mitigating circumstances. In addition:
(1) Defendant shall be liable for loss of earning capacity of
deceased assessed and awarded by the court, unless the
deceased had a prior permanent physical disability
(2) If deceased was obliged to give support, recipient who
is not an heir may demand support from the person
causing the death for a period not exceeding 5 years, the
exact duration to be fixed by the court
(3) The spouse, legitimate, and illegitimate descendants
and ascendants of the deceased may demand moral
damages for mental anguish by reason of the death.
- Applies to contract of carriage by express provision
- Fixed damage for death has been amended to 50K
- Amount of the loss of earning capacity is measured by
the life expectancy multiplied by (gross annual income
minus necessary living expenses)
 Life expectancy is 2/3 x (80-age of death) in
accordance with the American Expectancy Table of
Mortality
 Living expenses is fixed at 50% of the gross income
in the absence of proof of living expenses
- Loss of earning capacity must be established through
documentary proof except for self-employed
individuals earning less than minimum wage or daily
wage earner earning less than minimum
- Even an unemployed victim may recover damages
A2208: In absence of stipulation, attorney’s fees and
expenses of litigation other than judicial costs cannot be
recovered, except when:
1) Exemplary damages are awarded
2) Defendant’s act or omission compelled plaintiff to
litigate with 3rd persons or incur expenses to protect his
interest
3) Criminal cases of malicious prosecution against plaintiff
4) Clearly unfounded civil proceeding against plaintiff
5) Defendant acted in gross and evident bad faith in
refusing plaintiffs just claim
6) Actions for legal support
7) Actions for recovered of wages of household help,
laborers, and skilled workers
8) Actions for indemnity under workmen’s compensation
and employer’s liability laws
9) Separate civil action to recover civil liability arising
from crime
10) When at least double judicial costs are awarded
11) Any other case court deems just and equitable that
attorney’s fees and litigation expenses should be recovered
- Award of attorney’s fees is the exception
- Text of decision must state reason behind the award
- Underlined are paragraphs applicable to a contract of
carriage
A2219: Moral damages may be recovered in the following
and analogous cases:
(1) A criminal offense resulting in physical injuries
(2) Quasi-delicts causing physical injuries
(3) Seduction, abduction, rape, or other lascivious acts
(4) Adultery or concubinage
(5) Illegal or arbitrary detention or arrest
(6) Illegal search
(7) Libel, slander or any other form of defamation
(8) Malicious prosecution
(9) Acts mentioned in article 309
(10) Acts and actions referred to in articles 21, 26, 27, 28,
29, 30, 32, 34, and 35.
Parents of female seduced, abducted, raped, or abused,
referred to in No. 3, may also recover moral damages.
Spouse, descendants, ascendants, and brothers and sisters
may bring action mentioned in No. 9, in the order named.
- Include physical suffering, mental anguish, serious
anxiety, besmirched reputation, wounded feelings,
moral shock, and social humiliation that was the
proximate result of the defendant’s wrongful act or
omission
 In breach of contract of air carriage, moral damages
may be recovered where it resulted to death, fraud or
bad faith in securing and executing contract, or carrier
is guilty of gross and reckless negligence (absence of
even slight care)
 Generally, no moral damages may be awarded
where breach of contract is not malicious or carrier
exercised some degree of care
- Moral damages has been awarded against a taxi
overtaking in a flyover, a school bus negligently
crossing a railroad causing the death of a 15-year-old
child, a bus bumping a tree and a house
- In air transport, moral damages had been awarded in
the ff cases:
 Loss luggage where the only attempt to locate had
been through phone calls
 Failure to provide accommodations for stranded
passengers
 Cancelling the reservation and not relaying the
same to passengers
 Promising 1st-class accommodation to a passenger
who compromised but ended up not getting said
accommodation
 Ejecting a passenger arbitrarily
 Erroneous entries of departure times leading to
passengers being bumped off
- Amount to be recovered may be affected by factors
established by jurisprudence like: (HPOA)
1) Extent of humiliation
2) Extent of pain and suffering
3) Official, political, social, and financial position
4) Age of claimant
A2221: Nominal damages are adjudicated in order that a
right of the plaintiff, which has been violated or invaded by
the defendant, may be vindicated or recognized, and not
for the purpose of indemnifying the plaintiff for any loss
suffered by him.
A2222: Court may award nominal damages in every
obligation arising from any source enumerated in article
1157, or in every case where any property right is invaded.
A2223: Adjudication of nominal damages shall preclude
further contest upon the right involved and all accessory
questions, as between the parties to the suit, or their
respective heirs and assigns.
- Awarded to passengers in Japan who were stranded
due to Mt. Pinatubo erupting and were not scheduled
for the first connecting flight
- Awarded to Commissioner of Public Highways bumped
off first-class who was travelling in his official capacity
A2224: Temperate or moderate damages, which are more
than nominal but less than compensatory damages, may be
recovered when court finds that some pecuniary loss has
been suffered but its amount cannot, from the nature of the
case, be provided with certainty.
A2225: Temperate damages must be reasonable under the
circumstances.

A2226: Liquidated damages are those agreed upon by the

parties to a contract, to be paid in case of breach thereof.
A2227: Liquidated damages, whether intended as an
indemnity or a penalty, shall be equitably reduced if they
are iniquitous or unconscionable.
A2228: When the breach of the contract committed by the
defendant is not the one contemplated by the parties in
agreeing upon the liquidated damages, the law shall
determine measure of damages, and not the stipulation.
- Normally, court cannot change but may be subject to
equitable reduction if unconscionable or if the breach
is not the one contemplated by the parties

A2229: Exemplary or corrective damages are imposed, by

way of example or correction for the public good, in
addition to the moral, temperate, liquidated or
compensatory damages
A2231: In quasi-delicts, exemplary damages may be
granted if the defendant acted with gross negligence.
A2232: In contracts and quasi-contracts, court may award
exemplary damages if the defendant acted in a wanton,
fraudulent, reckless, oppressive, or malevolent manner.
A2233: Exemplary damages cannot be recovered as a
matter of right; the court will decide whether or not they
should be adjudicated.
A2234: While the amount of exemplary damages need not
be proved, plaintiff must show that he is entitled to moral,
temperate or compensatory damages before court may
consider whether or not exemplary damages should be
awarded. In case liquidated damages have been agreed
upon, although no proof of loss is necessary for such,
nevertheless, before court may consider the question of
granting exemplary in addition to the liquidated damages,
plaintiff must show that he would be entitled to moral,
temperate or compensatory damages were it not for the
stipulation for liquidated damages.
A2235: Stipulation whereby exemplary damages are
renounced in advance shall be null and void.
- Awarded to deter airlines from being discourteous
- Awarded in negligence that lead to sinking of vessel
- Awarded where bus hit a house and tree
PART II: AVIATION LAW
CHAPTER 7: AIRCRAFT AND CIVIL AVIATION
- Primarily governed by Civil Aviation Authority Act of
2008, regulations issued by Civil Aviation Authority of
the PH, and economic regulations of the Civil
Aeronautics Board
 Treaties and convention like the Warsaw
Convention also have the effect of law
- Different regulatory perspective since authority arises
from legislative franchise, subject to special law, and
has international aspect
- Aeronautics or aviation: science and art of flight
- Civil aviation: operation of any civil aircraft
- PH aircraft: aircraft registered in PH in accordance
with the Civil Aviation Authority of the PH
 The Chicago Convention mandates that every
aircraft engaged in international travel shall bear its
appropriate nationality and registration marks
>> Aircraft cannot be registered in more than 1 state
>> The nationality marks of the PH is ‘RP’
S43 of Civil Aviation Authority Act of 2008: Establishment
of Registry
The Authority shall:
(a) Establish and maintain a system for the national
registration of aircraft in the Philippines;
(b) Establish and maintain a system for the registration of
liens, mortgages or other interests in aircraft or aircraft
engines; and
(c) Have sole authority to register aircraft and liens,
mortgages or other interests in aircraft or aircraft engines.
S44: Eligibility for Registration
Except as otherwise provided in Constitution and existing
treaty or treaties, no aircraft shall be eligible for
registration unless it is owned by or leased to a PH citizen
or corporations or associations organized under laws of
the PH at least 60% of whose capital is owned by Filipino
citizens. Under such rules and regulations promulgated by
the Board, foreign-owned or registered aircraft may be
registered if utilized by members of aero clubs organized
for recreation, sport or development of flying skills as a
prerequisite to any aeronautical activities of such clubs
within the Philippine airspace. (
Such certificate shall be conclusive evidence of nationality
for international purposes, but not in any proceeding
under the laws of the Republic of the Philippines.
Certificate of registration is conclusive evidence of
ownership, except in proceeding where ownership is at
issue.
S45: Application for Aircraft Registration
Applications for certificate of registration shall be made in
writing, signed and sworn to by the owner or lessee of any
aircraft or aircraft engine eligible for registration. The
application shall also state:
(a) Date and place of filing;
(b) Specification, construction and technical description of
the aircraft or aircraft engine;
(c) Other information as may be required by the Authority
in such manner and form as the Authority may prescribe.
S46: Issuance of Certificate of Registration
Should the Director General, upon considering the
application for registration, find the aircraft or aircraft
engine eligible for registration, such aircraft shall be
registered under the provisions of this Act and the owner
thereof shall be issued a certificate of registration.
S47: Nationality
An aircraft shall acquire Philippine nationality when
registered pursuant to this Act.
S48: Revocation
Any certificate of registration may be revoked by the
Authority for any cause, which renders the aircraft
ineligible for registration.
S49: Conveyance to be Recorded
No conveyance made or executed, which affects the title to,
or interest in, any aircraft of Philippine registry, or any
portion thereof shall be valid in respect to such aircraft or
portion thereof against any person other than the person
by whom the conveyance is made or executed, his heirs,
assignees, executors, administrators, devisees, or
successors in interest, and any person having actual notice
thereof, until such conveyance is recorded in the Authority.
Every such conveyance so recorded shall be valid as
against all persons. Any instrument, recording of which is
required by the provisions of this Act, shall take effect from
the date of its record in the books of the Authority, and not
from the date of its execution.
S50. Form of Conveyance
No conveyance may be recorded under the provisions of
this Act unless it complies with the requirements for the
registration of documents similar to the land registration
process. The conveyance to be recorded shall also state: (a)
the interest in the aircraft of the person by whom such
conveyance is made or executed or, in the case of a
contract of conditional sale, the interest of the vendor; and
(b) the interest transferred by the conveyance.
S51: Establishment of System of Recording.
The Authority shall establish a national system for
recording documents that affect the title to or any interest
in any aircraft registered in accordance with this Act and in
any aircraft engine, propeller, appliance or spare parts
intended for use on any such aircraft.
S52: Method of Recording
The Authority shall record conveyances delivered to it in
the order of their receipt, in files kept for that purpose,
indexed to show:
(a) The identifying description of the aircraft;
(b) The names of the parties to the conveyance;
(c) The date of the instrument and the date and time it is
recorded;
(d) The interest in the aircraft transferred by the
conveyance;
(e) If such conveyance is made as security for
indebtedness, the amount and date of maturity of such
indebtedness; and
(f) All particular estates, mortgages, liens, leases, orders
and other encumbrances and all decrees, instruments,
attachments or entries affecting aircraft and other matters
properly determined under this Act.
S53: Upon establishment of a recording system in
accordance with this Act, no document affecting title to or
any interest in such registered aircraft, aircraft engines,
propellers, appliances, or spare parts shall be valid except
between parties thereto, unless document is registered in 6) Right of transporting via the home State of the
such recording system. carrier, traffic moving between two other States
- Insurance over aircraft falls within the coverage of 7) Di ko na gets
Marine Insurance 8)
- Air commerce/Commercial air transport: scheduled or 9)
non-scheduled air transport services of passengers, - Cabotage: transport of goods or passengers between
cargo, or mail for pay or hire in furtherance of business two places in same country by a transport operator
- Foreign air transport: from PH to foreign country or from another country
wholly outside PH  PH has not granted the right of cabotage in its
- International commercial air transport: carriage of jurisdiction
persons or property for remuneration between any
two or more countries
- Airman: any individual who engages as the pilot,
mechanic, engineer, flight radio operator, or
crewmember in an aircraft or those who inspect,
overhaul, repair the plane and its parts
- The Civil Aeronautics Board governs the economic
aspect of air transport including sales agents
charterers, freight forwarders, etc.
 General sales agent- person who, pursuant to an
authority from an airline, by himself or through an
agent, sells or offers air transport
 Cargo sales agent- any person who does not operate
an aircraft who, as principal or agent, offers for sale
any air transport of cargo
Air freight forwarders- any indirect air carrier that
assembles or consolidates property or provides for
distributing of consolidated shipments
 Off-line carrier- any foreign air carrier not certified
by the board that maintains agents or employees or
sells, solicits, or advertise air transport
 Air taxi operator- air carrier using a small aircraft
for charter trip or individual transport certified by the
CAB
- Charter trip/flight- where entire or less than entire
capacity of an aircraft is engaged for movement of
baggage or property on a time, mileage, or trip basis by
a person, representative of a group, or an airfreight
forwarder
 Types-
>> On route charter- service by air carrier where he is
authorized according to its certificate of public
convenience
>> Pro-rata charter- cost is divided among passengers
>> Singe entity charter- charter the cost of which is
borne by the charterer and not by the passengers
>> Mixed charter- cost is borne by charter participants
and partly by the charter
- According to the Chicago Convention, before airlines of
treaty partners go to and from another’s territory, the
two governments shall negotiate a bilateral treaty
- Freedoms of the air under the International Civil
Aviation Organization (ICAO):
1) Fly across territory of another State
2) Land in territory of another State
3) Put down traffic from the home State of the carrier
4) Take on traffic destined from the home State of
carrier
5) Putdown and take on traffic coming from or
destined to a 3rd State
CHAPTER 8: OBLIGATIONS OF CARRIER IN AIR 2) Has a handicap that can only be physically
TRANSPORTATION accommodated by an exit row seat
- Extraordinary diligence in air transportation includes - Burden of proving that passenger is a ‘no show’ rests
the following obligations: with the carrier
1) Airworthiness of aircraft - 22 pages of copy pasted Economic Regulation No. 7
2) Competent captain and crew and Bill of Rights for Air Passengers and Carrier
3) Extraordinary diligence in operation of aircraft Obligations (2012)
- Under S3 of the Civil Aeronautics Act of 2008, - Inspection of aircraft and cargois mandated under R.A.
airworthiness is: aircraft and its components are of 6235 or the Act Prohibiting Certain Acts Inimical To
proper design and construction consistent with Civil Aviation
accepted engineering practice, laws, and science and  Aircraft companies acting as public utilities are
safe for air navigation or against the rigors of flight authorized to open and investigate packages and cargo
 Registered owner or operator is responsible for in the presence of owner, shipper, or representative
maintaining airworthy condition >> If owner, shipper or representative refuses, air
- Tariff system: rule or condition of air travel regulating carrier can refuse loading
airlines and their passengers  Every airline ticket shall state that any holder
- Air carriers have been made liable for baggage of thereof and his hand-carried luggage is subject to
passengers in the following cases: search and seizure of prohibited materials
1) Damage to baggage or contents were lost or stolen >> If holder refuses, he shall not be allowed to board
2) Baggage diverted to another place - SC decisions posit that the duty to inspect includes
3) Off-loading of baggage duty to make inquiry as to the general nature of
4) Delay in delivery of baggage articles but air carrier has the right to rely on the
- Under the Civil Aviation Regulations, the stowage shipper’s marks as to the contents of a package
locations of carry-on baggage shall be capable of  Inspection shall ensue should there be doubt as to
restraining articles in crash impacts severe enough to the shipper’s or owner’s representations
cause emergency landing  Unlike land-based common carriers, inspection of
- Duty to passengers include the duty to require aircrafts are more rigorous
personnel to be more accommodating towards  Shipper or owner of baggage cannot claim damages
passengers and the general public due to inconvenience of inspecting
- Air carriers have breached their contract as enunciated
in the following cases:
 Inattention or lack of care towards passengers
 Rudeness or discourtesy to stranded passengers
 Cancellation of confirmed reservation
 Downgrading to another class or even upgrading
 Off-loading a passenger before reaching destination
 Refusal to accept passenger with confirmed tickets
 Prevention of passengers from boarding
replacement flight
 Physical injuries due to failure to latch the door of a
serving car or overhead luggage compartment
 Overbooking passengers which automatically
amounts to bad faith and consequently moral damages
>> Under the Economic Regulation No. 7 of the Civil
Aeronautics Board, only overbooking of more than
10% of the seating capacity is considered done with
bad faith and applies only for flights within or from PH
or those denied boarding for reasons other than no-
show or voluntary cancellations, delayed flights, or
cancelled flights
>> Limitation of liability for overbooking is only
applicable to honest mistakes
 Choosing another route for the passenger in case of
delay due to engine malfunction
- Delay or diversion of a flight due to a fortuitous event
does not terminate the contract of carriage
 Air carrier is still duty bound to provide comfort,
convenience, and to communicate to passengers
- Under the Civil Aviation Regulations, an operator may
deny transportation if a passenger:
1) Refuses to comply with instructions on exit seating
CHAPTER 9: WARSAW CONVENTION
- Formally called the Convention for Unification of
Certain Rules Relating to International Transportation
by Air
 Dated 1929 but only ratified by the PH in 1950
- Applies to all international transportation of persons,
baggage, and goods performed by an aircraft for hire
or gratuitously
- Seeks to balance the interest of passengers seeking
recovery for personal injuries and the interest of air
carries seeking to limit liability
- Treaty is a joint legislative and executive act that is
presumed to be Constitutional
 Doctrine of rebus sic stantibus does not apply as
the Warsaw Convention was prospectively issued
A17 of WC: Carrier is liable for damage sustained in the
event of death or wounding of a passenger or any other
bodily injury suffered by a passenger if the accident took
place on board the aircraft or in the course of embarking
or disembarking.
A18: (1) Carrier is liable for damage sustained in the event
of destruction or loss or damage to any checked baggage or
any goods, if the occurrence, which cause the damage took
place during transportation by air.
(2) Transportation by air within the meaning of the
preceding paragraph shall comprise the period during
which the baggage or goods are in charge of the carrier,
whether in an airport, on board the aircraft, or in case of a
landing outside the airport, in any place whatsoever.
(3) Period of transportation by air shall not extend to any
transport by land, sear, or by river performed outside an
airport. If, however, such transportation takes place in the
performance of a contract for transportation by air, for
purpose of loading, delivery, or transshipment, any
damage is presumed, subject to proof to the contrary, to
have been the result of an event, which took place during
the transportation by air.
A19: Carrier is liable for damage occasioned by delay.
A22: (1) In carriage of passengers, liability of the carrier
for each passenger is limited to the sum of 125,000 francs.
Where, in accordance with law of the Court to which the
case is submitted, damages may be awarded in periodical
payments, the equivalent capital value of the said
payments shall not exceed 125,000 francs. Nevertheless,
by special contract, carrier and passenger may agree to a
higher limit of liability.
2. In the carriage of registered luggage and of goods, the
liability of the carrier is limited to a sum of 250 francs per
kg, unless the consignor has made, at the time when the
package was handed over to the carrier, a special
declaration of the value at delivery and has paid a
supplementary sum if the case so requires. In that case the
carrier will be liable to pay a sum not exceeding the
declared sum, unless he proves that that sum is greater
than the actual value to the consignor at delivery.
3. As regards objects of which the passenger takes charge
himself the liability of the carrier is limited to 5,000 francs
per passenger.
4. The sums mentioned above shall be deemed to refer to
the French franc consisting of 65 1⁄2 milligrams gold of
millesimal fineness 900. These sums may be converted
into any national currency in round figures.
- A17 does not apply if injury results from the
passenger’s internal reaction to the usual operation of
the aircraft
 Must be caused by an unexpected or unusual event
external to the passenger that he must prove even if
the same is merely a part of a chain of causes
- A22 limits action and award for damages
- International transportation: transport within the
territories of 2 contracting parties, regardless of
whether there was a break in such
 Includes transport within the territory of 1
contracting party where the agreed stopping place is
within a territory subject to the sovereignty of another
power, even if the latter is not a party
- Carrier is liable if passenger is injured:
1) On board the aircraft
2) In the court of embarking or disembarking
3) Injury was during or because of delay
- With respect to baggage or goods that are checked in,
the carrier is liable if damage occurred during air
transportation or when there is delay
- The Guatemala Protocol (1971) amended the limit of
liability to $100K per passenger and $1K per baggage
but the SC in a case in 1992 posited that such Protocol
is ineffective
 S15 of the Economic Regulation No. 9 of the Civil
Aeronautics Board, in line with the 1966 Montreal
Inter-Carrier Agreement, set the limit to $75K for
death, injury, or bodily wounding of each passenger,
inclusive of legal fees or $58K if there is a separate
award for legal fees
>> In a 1998 case, the SC cited jurisprudence that an
air carrier is not liable for the loss of baggage in the
amount in excess of the limits specified in the tariff
that was file with proper authorities
- Defenses against limit of liability under the WC:
1) Willful misconduct-caused by agent of carrier acting
within the scope of his employment
2) Gross negligence- loss of baggage twice
3) Absence of ticket- mandated by WC including the
statement that transportation is subject to rules of WC
3) Absence of baggage check- unless personal effects of
passenger carried by himself
4) Waiver of carrier- failure to raise timely objections
5) Estoppel of carrier from invoking provision- false or
wrongful representation of employee of carrier
 Act or omission of carrier must still be the
proximate cause of the accident
- WC does not provide for an exclusive enumeration of
instances when the carrier is liable
 Does not provide absolute limit of liability
 Does not preclude application of local laws
>> Thus, prescriptive period of WC of 2 years is only
supplementary as long as action is filed within
prescriptive period of CC of 4 years
>> In a case where Singapore Airlines barred
passengers from boarding days before a flight, the tort
based on emotional harm was still valid under CC even
 if the WC only prescribes damages on board or in the  Fact that a successive carrier is considered an agent
course of air transport does not excuse it from liability
- Under A28 (1) of the WC, action for damages must be >> Agent is liable for its negligent acts or omissions
brought to: - Non-compliance with provisions on formality
1) Court where the carrier is domiciled pertaining to the passenger ticket, baggage check,
2) Court of carrier’s principal place of business airway bill (like bill of lading) may result in non-
3) Court where carrier has an establishment or where application of limit of liability
contract was made  Example is absence of baggage check
4) Court of place of destination
 Jurisdiction has dual concept under WC since only
when jurisdiction according to domestic law is
determined may venue be laid
- Allegation of tort does not bring the case outside the
ambit of the WC

A26: (1) Receipt by person entitled to delivery of luggage

or goods without complaint is prima facie evidence that
the same have been delivered in good condition and in
accordance with the document of carriage.
(2) In the case of damage, the person entitled to delivery
must complain to the carrier forthwith after the discovery
of the damage, and, at the latest, within 3 days from date of
receipt in the case of luggage and seven days from the date
of receipt in the case of goods. In the case of
delay the complaint must be made at the latest within
fourteen days from the date on which the luggage or goods
have been placed at his disposal.
(3) Every complaint must be made in writing upon the
document of carriage or by separate notice in writing
despatched within the times aforesaid.
(4) Failing complaint within the times aforesaid, no action
shall lie against the carrier, save in the case of fraud on his
part.
- Provides rules on notice of claim such as:
1) Filed within 3 days in case of baggage
2) Filed within 7 days in case of goods
3) Filed within 14 days in case of delay from time
baggage is placed in the disposal of passenger
 Jurisprudence held that a notice of claim is a
condition precedent to the accrual of a right of action
against a carrier for loss or damage
>> Informs carrier and gives it an opportunity to
examine the nature and extent of injury
- Notice of claim can be dispensed with if there is fraud
on the part of the carrier or delay in filing is
attributable to the carrier

A29: (1) Right to damages shall be extinguished if an

action is not brought within 2 years, reckoned from the
date of arrival at the destination, or from the date on which
the aircraft ought to have arrived, or from the date on
which the carriage stopped.
(2) Method of calculating the period of limitation is
determined by law of the court where case is submitted.
- 2-year prescriptive period does not apply if the cause
of action is based on a quasi-delict
- In A1(3) of WC, transport by several successive
carriers shall be deemed as one undivided transport
whether in 1 or a series of contracts
 Obligation of airline will not cease even if other
airlines carry the passenger in other portions