TRANSPORTATION LAWS Shipper- gives rise to contract
-Merchants spreading wares to sell goods
-catalyst for law today
Contract of Transportation
-A contract whereby a person, natural or juridical,
obligates to transport persons, goods, or both, from
one place to another, by land, air or water, for a price
or compensation.
Classifications:
1. Common or Private
2. Goods or Passengers
3. For a fee (for hire) or Gratuitous
4. Land, Water/maritime, or Air
5. Domestic/inter-island/coastwise or
International/foreign It is a relationship which is
imbued with the public interest
Parties to a Contract of Transportation
General Parties – SHIPPER & CARRIER
“Shipper” –passenger
“Carrier “– provider of Transportation from point of
Origin to the point of Destination
Transportation of Things
1) Shipper
2) Carrier
3) Consignee – one who will receive things
*Shipper and Consignee can be one and the same
person
*While there may be 3 parties there can only be 2
persons
Transportation of News
2-3 persons
Shipper, Carrier, Consignee
Baliwag Transit v CA – 169 S 849
George – injured passenger
Carrier was remiss in duties from point of origin to
point of destination
-when accident occurs carrier is liable for breach of
contract
 George executed a waiver/release of his
claims and received 8k compensation
 Parents complained that 200k was incurred as
medical expenses – they seeked moral
damages
COURT: Parents are not proper party in interest;
Contract of Carriage is only between shipper and
carrier
Carrier/Conductee – binds himself to transport
Passengers/ Thing/ News
-may be the one employed or engaged in the
delivery of goods (FOR HIRE)
Consignee- to whom goods are delivered by carrier
NOTE: Shipper and Consignee may be one and the
same person
Freight-
1) Payment/ price for carriage (Freightage)
2) May also mean goods which are carried or to be
delivered
CONSTITUTIONAL BASIS ART XII Sec 11
No Franchise, certificate, or any other form of
authorization for the operation of a public utility shall
be granted except to citizens of the Philippines or to
corporations or associations organized under the
laws of the Philippines at least sixty per centum of
whose capital is owned by such citizens, nor shall
such franchise, certificate or authorization be
exclusive in character or for a longer period than fifty
years.
Neither shall any such franchise or right be granted
except under the condition that it shall be subject to
amendment, alteration, or repeal by the Congress
when the common good so requires. The State shall
encourage equity participation in public utilities by
the general public. The participation of foreign
investors in the governing body of any public utility
enterprise shall be limited to their proportionate
share in its capital, and all the executive and
managing officers of such corporation or association
must be citizens of the Philippines.
Q: May Foreign Corporation own Public Utility?
A: Tatad v Hon Garcia
EDSA LRT – Owned by Foreign Corporation
SC: Ownership and Operation are different
-the tracks, building, carriage are owned by EDSA
and not operate the LRT
1. Any loss/damage due to the operation of the LRT
-DOTC is liable
2. Any loss/damage due to the defect of LRT –
Foreign Corporation is liable
Transportation Laws in the Philippines
ART 1732-1766 of Civil Code
Matters not regulated by the code,
common carriers are covered by the Code
of Commerce and special laws such as the
COGSA
[Type the company name]
Laws applicable to different kinds of Transportation
LAND TRANSPORTATION
1. Civil Code
2. Code of Commerce (suppletory)
3. Public Service Act
4. RA 4136 – created the Land Transportation
Commission
AIR
1. Civil Code
2. Code of Commerce (suppletory)
3. Warsaw Convention
SEA
To Philippines (Inside Territory)
1. Civil Code
2. Code of Commerce (suppletory)
3. Salvage Law
From Philippines (Outside Territory)
1. Law of Destination
2. COGSA – Carriage of Goods by Sea Act
Q: What is a common carrier?
A: Art 1732 – offers service to public
COMMON CARRIERS
Article 1732. Common carriers are persons,
corporations, firms or associations engaged in the
business of carrying or transporting passengers
or goods or both, by land, water, or air, for
compensation, offering their services to the
public.
Elements of Common CARRIER
1. Person/Corporatttion/Association/Franchise
2. Engaged in the business of carrying, transporting
passengers, goods or both
3. Means of Transportation is by Land, Water, Air
4. For a fee or compensation
5. Services rendered to public is without distinction
De Guzman v CA - 168 S 612
Occasional, episodic basis may be considered as
Common carrier
SC: Art 1732 does not make any distinction between a
person or enterprise offering transportation service on
a regular or scheduled basis and one offering such
service on an occasional, episodic or unscheduled
basis.
Neither does Art 1732 distinguish between a carrier
offering its services to the general public and one who
offers services or solicits business only from a narrow
segment of the general population.
A certificate of public convenience is not necessary to
incur liability as a common carrier. As long as services
for compensation is made one is deemed a common
carrier.
Characteristics of a Common Carrier
1) Undertakes to carry for all people differently
2)Cannot lawfully decline to accept goods for carriage
Except for sufficient reasons (mere prejudice or whim
will not suffice)
3) No monopoly is favored
4) It is for public convenience
PRIVATE CARRIER
1.undertakes transportation for particular instance for
hire
NOTE: No one can consider himself as a Common
Carrier unless he held himself as a carrier liable for
general public (offers services to anyone)
2.Private carrier is not bound to carry goods except if it
enters into a special agreement
3.
A common carrier public service and subject to
regulation (ex. LTFRB)
A Private carrier does not hold itself as engaged in
business for public
4. Diligence Required
Common Carrier – extraordinary diligence in its
obligation
Private Carrier – only exercise diligence of a good
father of a family
Test to Determine nature of Carrier
1) Engaged in the business of carriage of goods for
others
2)It must undertake to carry the goods
3)It must undertake to carry by the method by which
business is conducted and over its established roads
4) Transportation must be for hire
ART 1733 Common Carriers, from the nature of
their business and for reasons of public policy, are
bound to observe extraordinary diligence in the
vigilance over goods and for the safety of the
passengers transported by them, according to all
the circumstances of each case.
Such extraordinary diligence in vigilance over the
goods is further expressed in Articles 1734, 1735,
and 1745 Nos 5, 6 and 7, while the extraordinary
diligence for the safety of the passengers is further
set forth in Articles 1755 and 1756.
EO Diligence – going over and above
[Type the company name]
National Trucking and Forwarding
Corporation v. Lorenzo Shipping
Corporation
G.R. No. 153563 Feb 07, 2005
ISSUE: Is respondent presumed at fault or
negligent as common carrier for the loss or
deterioration of the goods?
HELD: NO
GR: Yes
However, the presumption of fault or
negligence, may be overturned by
competent evidence showing that the
common carrier has observed
extraordinary diligence over the goods.
Article 1733 of the Civil Code demands that a
common carrier observe extraordinary
diligence over the goods transported by it.
Extraordinary diligence is that extreme
measure of care and caution which persons of
unusual prudence and circumspection use for
securing and preserving their own property or
rights
This exacting standard imposed on common
carriers in a contract of carriage of goods is
intended to tilt the scales in favor of the
shipper who is at the mercy of the common
carrier once the goods have been lodged for
shipment. Hence, in case of loss of goods in
transit, the common carrier is presumed under
the law to have been at fault or negligent.
However, the presumption of fault or
negligence, may be overturned by competent
evidence showing that the common carrier has
observed extraordinary diligence over the
goods.
Sps Dante Cruz v Sun Holidays
GR No. 186312; Jun 29, 2010
EO Diligence required of Common Carrier
demands that they take care of goods or lives
in their hand as if it is their own.
Q: Why is Extraordinary Diligence required?
A: Because Common Carriage is a public duty
and impressed with public interest. The public
will rely on the skill and competence of
Common carriers.
CARRIAGE OF GOODS
Article 1734. Common carriers are
responsible for the loss, destruction, or
deterioration of the goods, unless the same
is due to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or
other natural disaster or calamity;
(2) Act of the public enemy in war, whether
international or civil;
(3) Act or omission of the shipper or owner
of the goods;
(4) The character of the goods or defects in
the packing or in the containers;
(5) Order or act of competent public
authority.
Liability on Goods (Common Carriers)
GR: For Loss and deterioration, CC is liable
-under Article 1735 the presumption is CC is
always at fault and acted negligently
Q: How do you rebut the presumption?
A: They observed Extraordinary Diligence
Q: Who has the burden of proof?
A: Shippers have the burden of proof that the
goods are lost/destroyed/ suffered
deterioration
*The burden of proof is shifted to Common
Carriers where it must show that it exercised
EO Diligence as required by law
Coastwise Lighterage Corporation v. CA
GR No. 1144167 July 12, 1995
*Mere delivery of goods to point of destination
which is damaged brings prima facie case
against carrier.
“CC is presumed already at fault”
-May be rebutted by exercise of EO Diligence
ARTICLE 1734 provides exemptions from
liability
IMPORTANT:
CC has duty to properly ship, carry, handle
and exercise due care, consider the nature of
goods or equipment during voyage of
shipment. CC may ask for the value of goods.
Shipment made for valuable
consideration
*CC can refuse if package is poorly packed
IF he accepts – CC is held liable if any loss,
damage or deterioration may occur.
[Type the company name]
 Regional Container Lines (RCL) of Singapore
v The Netherlands Insurance Company
GR. No. 168151 Sept 4, 2009
Because of the presumption, there is no need for
the express finding of negligence.
-shipper need not prove that CC is at fault
because burden of proof in showing EO diligence
is shifted to CC.
VIGILANCE OVER GOODS
Ways for common carrier to be exempted from
liability (1734)
1. FORCE MAJURE
2. ACTS OF PUBLIC ENEMY
3. ACTS/OMISSIONS OF SHIPPER
4.CHARACTER OF GOODS
1734 (1) Flood, storm, earthquake, lightning, or
other natural disaster or calamity;
ELEMENTS OF FORTUITOUS EVENT -ART
1174
a)the cause of the unforeseen and unexpected
occurrence, or the failure of the debtors to comply
with their obligations, must have been
independent of human will;
(b) the event that constituted the caso fortuito
must have been impossible to foresee or, if
foreseeable, impossible to avoid;
(c) the occurrence must have been such as to
render it impossible for the debtors to fulfill their
obligation in a normal manner; and
(d) the obligor must have been free from any
participation in the aggravation of the resulting
injury to the creditor
To fully free a common carrier from any liability,
the fortuitous event must have been the proximate
and only cause of the loss. And it should have
exercised due diligence to prevent or minimize the
loss before, during and after the occurrence of the
fortuitous event.
(Sps Dante Cruz v Sun Holiday)
Q: Defenses of Common Carriers
A: ART1739
1)The proximate and only cause of loss must be
natural disaster
2)Exercise of Due diligence – preventing loss
before, during and after
3)Carrier not negligently incurred delay in
transporting goods
*Proximate cause must be the fortuitous event
Article 1739. 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 in order that the common carrier
may be exempted from liability for the
loss, destruction, or deterioration of the
goods. The same duty is incumbent upon
the common carrier in case of an act of the
public enemy referred to in article 1734,
No. 2.
Q:What is the effect of delay?
A: ART 1740
If the CC negligently incurs in delay in
transporting the goods, a natural disaster
shall not free such carrier from
responsibility.
*To make CC liable it must be stated that CC
committed willful or negligent act
EX.
-Shipper wanted CC to ship boxes of goods
-CC was expected to embark on Dec 4
-Goods got wet by reason of a storm
CC is not liable because it delivered the goods
on Dec 5.
There was intervention from the willful and
negligent act of CC and the act of god. Shipper
did not contribute to the loss, destruction or
deterioration.
Q: is Fire a Fortuitous event?
A: No. Because fire arises almost invariably
from the act of man. It does not exempt CC
from liability.
Q: Mechanical defect a fortuitous event?
A: Not fortuitous event
1734(2) Act of the public enemy in war,
whether international or civil;
ACTS OF PUBLIC ENEMY
1) Must be the proximate cause and the only cause
of loss
2) EO Diligence is exercised by the CC , before,
during and after to minimize the loss
Q: Pirate a public enemy?
A: Yes. Enemy of all mankind
Q: Terrorist?
A: Yes. Civil and internationally
[Type the company name]
1734 (3) Act or omission of the shipper or
owner of the goods;
ACTS/NEGLIGENCE OF SHIPPER
-act or omission of Shipper or owner of goods
is the proximate cause
Ex.
Delay in transport of goods is caused by the
owner shipper
Q: May CC be exempted by reason of
contributory negligence of the owner?
A: Under article 1741 No.
Article 1741. If the 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.
To fully exempt CC from liability due to Shipper
or owners negligence is willful or negligent
-if merely contributory under 1741 CC will still
be liable, however damages will be equally
reduced.
1734(4) The character of the goods or
defects in the packing or in the containers;
CHARACTER OF GOODS/ PACKING IN A
CONTAINER
-to exempt CC form Liabilty
GR: By reason of goods/ packaging as long as
the loss/damage/ deterioration was due to the
character of the goods, CC will be exonerated
or not liable
Article 1742. Even if the loss, destruction,
or deterioration of the goods should be
caused by the character of the goods, or
the faulty nature of the packing or of the
containers, the common carrier must
exercise due diligence to forestall or lessen
the loss.
REQTS:
1) Loss, damage, deterioration due to
character of goods or defects in packaging
2) CC must also exercise EO diligence to
lessen or prevent loss
EX. Perishable goods
Saludo v CA
GR No. 95536; March 22, 1992
SC: Carrier is entitled to fair representation of
goods to be delivered. Statements made is
taken as is by common carrier.
*There is no need for inspection; the
representations made by shipper is relied
upon and CC need not go beyond
* CC has no obligation inquire on the
correctness of the representations made
Q: When does the duty to inspect arise?
A: In the event there is
1) Reason to doubt the veracity of statement or
representations made
2) There exists proof that there is cause for
inspection or there danger is present
1734 (5) Order or act of competent public
authority.
ORDER/ACT OF PUBLIC AUTHORITY
-due to the destruction or seizure of illegal goods
Ex. Drugs; those infected with disease;
*Those dangerous to life and property may be
recalled
Article 1743. If through the order of public
authority the goods are seized or destroyed, the
common carrier is not responsible, provided
said public authority had power to issue the
order.
REQTS:
1) Public officer issuing notice has authority under
law
-public authority must have the right to issue such
orders
*IF WITHOUT legal process, CC is liable
IMPT:
Over and above contractual relations, Police power
prevails
Q: Is Hijacking included in 1734?
A: No.
Acts of thieves and robbers are not included in 1734
which exonerate CC from liability
****
Under ART 1735 CC is presumed to be at fault
unless proved he exercised extraordinary diligence.
Under ART 1745(6)
GR: CC is liable for acts of thieves and robbers
EXC: Act of robbers/thieves is with grave or
irresistible threat, violence or force.
Article 1745. Any of the following or
similar stipulations shall be considered
[Type the company name]
 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.
ARTICLE 1734 – EXCLUSIVE LIST
-if not found within 1734 refer to 1735 – EO
diligence must be exercised
SAFETY PASSENGERS
ART 1755 Duty of CC
-bound to carry passengers safely
-high degree of care and EO diligence is required in
carriage of passengers BECAUSE it is demanded
by preciousness of human beings
Article 1755. A common carrier is bound to
carry the passengers safely as far as human
care and foresight can provide, using the
utmost diligence of very cautious persons, with
a due regard for all the circumstances.
Q: What is a passenger?
A: Persons who enters into a contract of carriage
whether express/implied with carrier
*Any injury or death of a passenger constitutes
breach of contract
Implications/ effects
Q: If passenger boards with knowledge of driver?
A: CC is liable.
-includes concessionaires (peddlers of food etc)
Q: One who boards wrong train or bus?
A: Presumption is that there is a contract of
carriage entered into
Q: If with consent of employees an individual
rides on a dangerous area?
A: If with knowledge of the driver, person is
deemed a passenger.
Q: Are CC still liable if passenger passed his
point of destination?
A: CC must provide safety to its passengers not
only during the course of the trip but for so long
as passenger is within the premises, a contract
of carriage exists.
-contract of carriage continues and the persons
is considered as a passenger
Contract of Carriage ends when passenger
refused to go down and is given every
reasonable opportunity to alight from the vehicle.
Q: WHO ARE NOT PASSENGERS?
A:
1) Those who have not yet stepped on any
part of the vehicle
2) Those who refuse to pay
Q: Non payment of fare – are they still
considered passengers?
A: It depends
a)If with intention to pay – Passenger
b)Refused to pay/ No intention of paying
– Not Passenger
3) Those who employ fraud and deceit
(even with payment) – as long as driver is not
aware of the on committing fraud or deceit
Ex. Point of destination is supposed to be only
until DAU , but passenger stayed until Manila
4) One who attempts to board moving
vehicle although purchased a ticket is not a
passenger ( IF W/O consent of CC)
-unless there is knowledge or negligence found
on the part of the driver
IMPT:
IF W/O Consent
- Ordinary diligence of CC is only required
Ex. When boarding a moving vehicle
IF W/ Consent
-person who suffers damage/ injury may file an
action for damages on the ground of Culpa
Aquiliana (quasi-delict)
Q: What if wrong bus was boarded and
person was informed. Is he still considered
a passenger?
[Type the company name]
A: Yes. But if he suffers damage after, No
contract of Carriage exists
GR: When person alighted from vehicle – not
considered a passenger
EXC: when still within the premises
Presumption of Negligence
-death or injury on passenger, CC is presumed at
fault or acted negligently
BUT CC may rebut by proving exercise of EO
Diligence and that Fortuitous event was the
proximate cause of death or injury
Q: Does CC exercise EO diligence with respect to
its employees?
A:
Philippine Airlines vs. CA 106 SCRA 391
- yes it also extends to crew members because
any lapse of carriers can hold them liable
SC said that PAL is liable, as a common
carrier, even though this is not a breach of
common carriage, because its duty to
exercise extraordinary diligence is not only for
the safety of its passengers but also for the
crew.
It let the main pilot fly even though he had a
nose tumor that affected his sinus, breathing
and his eyes. As a result they almost hit
Mayon and overshot the runway. A co-pilot
suffered injuries when the aircraft they were
on overshot its landing, and afterwards he
was not referred to expert medical
assistance, but rather left to suffer his
dizziness spells and the airline denying that
these were ever brought by the crash landing.
He was then dismissed by the airline because
he couldn't pilot anymore as a result of the
disability.
Q: When can CC be liable to passengers?
A:
Driver – recklessness, flagrant violation of
elementary considerations of the road, failure to
maintain good working condition of vehicle
Pilapil v CA ; 180 SCRA 546
While the law requires the highest degree of
diligence from Common Carriers, it cannot
make Common Carriers absolute insurers of
passengers safety
RATIONALE: Because not at all times are
passengers safe due to unforeseeable
circuimstances
Q: In case of injuries suffered by
Passengers, what causes of action are
available to them?
A:
1) institute a civil case based on culpa
contractual (Breach of contract)
2) Institute a criminal case with the civil
aspect based on culpa criminal OR waive
and file a separate civil action
3) Institute an Independent Civil Action based
on the count of physical injuries received as
found in Article 33 of the Civil Code
4) Quasi Delict
Fabre v CA
Gr No. 11127 ; July 26, 1996
Comoon Carrier and driver is jointly and
severally liable because of separate and
disitinct acts in safety of passengers
*Jointly and Severally – anyone may be
sought after
ART 2181 Whoever pays for the damage
caused by his dependents or employees
may recover from the latter what he has
paid or delivered in satisfaction of the
claim.
Q: May CC apply 2181 such that he
exercised the diligence of a good father of a
family in selecting the proper employees and
supervising them properly to be exonerated
from liability?
A: NO. Because the liability of CC arises out
of breach of contract while ART 2181 refers
to acts culpa aquiliana.
Therefore not a ground to exempt CC from
liability.
BUTT CC has duty to teach drivers as part of
EO diligence - train crew, drivers and remind
them of the proper rules for driving
KABIT SYSTEM – person granted a
certificiate of public convenience allows
others to operate them; selling or lending
franchises
*Not prohibited criminally but such is contrary
to public policy and deemed void and
inexistent
Q: In the event a person uses a franchise
and meets an accident. Who is liable?
[Type the company name]
A: Registered owner is liable even if vehicle used is
sold or leased to other persons
*Registered owner and driver are jointly and
severally liable to injured parties or third persons
RATIONALE: If registered owners were allowed to
evade liability, it would cause problems.
There would be a transfer to indefinite persons to
one who possess no property and in effect may be a
way to circumvent liability
Q: Recourse of the Registered owner?
A: File a 3rd party complaint against the owner of the
vehicle to recover civil liability
Dangwa Transportation Co. Inc. V. CA Et Al.
GR No. 95582 ; Octover 7,1991
SC:
1) Stepping and standing on the platform of the
bus, he is entitled to rights of a passenger and
deemed to have contractual relations of Common
carriage
2) If within Premises of Bus Terminal
-deemed a passenger when purchasing a ticket
FACTS:
-May 13, 1985: Theodore M. Lardizabal was driving
a passenger bus belonging to Dangwa
Transportation Co. Inc. (Dangwa)
-The bus was at full stop bet. Bunkhouses 53 and
54 when Pedro alighted
-Pedro Cudiamat fell from the platform of the bus
when it suddenly accelerated forward
-Pedro was run over by the rear right tires of the
vehicle
-Theodore first brought his other passengers and
cargo to their respective destinations before
bringing Pedro to Lepanto Hospital where he
expired
-Private respondents filed a complaint for damages
against Dangwa for the death of Pedro Cudiamat
-Dangwa: observed and continued to observe the
extraordinary diligence required in the operation of
the co. and the supervision of the employees even
as they are not absolute insurers of the public at
large
-RTC: in favour of Dangwa holding Pedrito as
negligent and his negligence was the cause of his
death but still ordered to pay in equity P 10,000 to
the heirs of Pedrito
-CA: reversed and ordered to pay Pedrito
indemnity, moral damages, actual and
compensatory damages and cost of the suit
ISSUE: W/N Dangwa should be held liable for
the negligence of its driver Theodore
HELD: YES. CA affirmed.
A public utility once it stops, is in effect making
a continuous offer to bus riders (EVEN when
moving as long as it is still slow in motion)
-Duty of the driver: do NOT make acts that would
have the effect of increasing peril to a passenger
while he is attempting to board the same
-Premature acceleration of the bus in this case =
breach of duty
-Stepping and standing on the platform of the bus is
already considered a passenger and is entitled all
the rights and protection pertaining to such a
contractual relation
-Duty extends to boarding and alighting
GR: By contract of carriage, the carrier assumes the
express obligation to transport the passenger to his
destination safely and observe extraordinary
diligence with a due regard for all the circumstances,
and any injury that might be suffered by the
passenger is right away attributable to the fault or
negligence of the carrier
EXC: carrier to prove that it has exercised
extraordinary diligence as prescribed in Art. 1733
and 1755 of the Civil Code
Failure to immediately bring Pedrito to the hospital
despite his serious condition = patent and
incontrovertible proof of their negligence
(Digest from internet)
*CC has duty to stop when individual boards
moving vehicle
Article 1736. The extraordinary
responsibility of the common carrier lasts
from the time the goods are unconditionally
placed in the possession of, and received
by the carrier for transportation until the
same are delivered, actually or
constructively, by the carrier to the
consignee, or to the person who has a right
to receive them, without prejudice to the
provisions of article 1738.
1736 When goods are placed
unconditionally in the possession of CC
Q: When control and possession of goods
passes to the carrier and nothing remains to
be done by the shipper. Effect?
A: Goods are deemed to be in control and
possession of CC
[Type the company name]
 Q: When does the responsibility to deliver
goods terminate?
A: When delivered to the consignee.
Q: When is there Constructive Delivery?
A: When notice has been given to the
consignee that the goods have arrived at the
place of destination
-It must be made known (DUE NOTICE)
IMPLICATION:
Common Carrier is released from exercising
Extra Ordinary Diligence
IMPT:
Because the CC is in control and possession of
goods, his obligation is to deliver and not to
delay the delivery of goods.
Q: If there is misdelivery. What is the effect?
A: It is considered to be undelivered.
Responsibility still attaches to the Common
Carrier until it has delivered to the consignee or
person who has a right to receive them.
MISDELIVERY – Prescriptive period
1) If W/ contract – 10 years
2) If based on QDelict – 4 years
3) If there is loss of cargo – 1 year from cause
of action accrued
Q: If there is temporary unloading.Is CC still
required to exercise EO diligence?
A: YES. Even if temporary unloading of goods
is undertaken, the responsibility of EO
diligence is in force and effect until delivered to
the consignee.
EXCEPT: if shipper exercises right of stoppage
in transitu
Article 1737. The common carrier’s duty to
observe extraordinary diligence over the
goods remains in full force and effect even
when they are temporarily unloaded or
stored in transit, unless the shipper or
owner has made use of the right of
stoppage in transitu.
* “Stoppage in transitu”
- the act by which the unpaid vendor of goods
tops their progress and resumes possession of
them
 Q: When may it be exercised?
A: When buyer/purchaser becomes insolvent
Q: What is the effect of Stoppage in transitu?
A: The exercise of Extraordinary Diligence of
Common Carrier cease
-CC is only required to exercise diligence of a good
father of a family, as a bailee/depositary
Article 1738. The extraordinary liability of the
common carrier continues to be operative even
during the time the goods are stored in a
warehouse of the carrier at the place 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.
Q: Obligation of CC once stored in warehouse?
A:
1)Still exercise EO diligence because it is placed in
its possession until delivery is made to the
consignee
2)If placed in warehouse responsibility ceases once
notice is given – consignee must be given a
reasonable opportunity to dispose or hold of them or
remove the goods, otherwise liability of the Common
Carrier attaches as found under ART 1738.
Q: If the goods are with the Bureau of Customs.
Does the responsibility of Extraordinary Diligence
still attach?
A:
Amparo Servando v Philippine Steam Navigation
Co.
GR No. L-36481-2 ; October 23, 1982
CC will not be liable if goods are in warehouse of
BOC
Case: consignee was in process of redeeming
goods when burned or destroyed in the warehouse
of BOC
SC:
The storage of the goods in the Customs
warehouse pending withdrawal thereof by the
appellees was undoubtedly made with their
knowledge and consent. Since the warehouse
belonged to and was maintained by the
government, it would be unfair to impute
negligence to the appellant, the latter having no
control whatsoever over the same.
LU DO & LU YM Corp. v I.V. Binamira
G.R. No. L-9840 ; April 22, 1957
ISSUE:
Is the carrier responsible for the loss considering
that the same occurred after the shipment was
discharged from the ship and placed in the
possession and custody of the customs
authorities?
SC:
[Type the company name]
-CC is still liable but such is limited; CC has no
control over the goods of the consignee
-Losing goods by virtue of law of customs, CC
has no control over the same
This is a situation where we may say that the
carrier loses control of the goods because of a
custom regulation and it is unfair that it be
made responsible for what may happen during
the interregnum.
*A shipper has no cause of action after a
reasonable opportunity has passed
*CC in turn may claim for demurrage
DEMURRAGE – Charge which is permitted
and recognized not only as payment for added
waiting time but because the usefulness of
the object and to obtain prompt release of
goods which interfere with the general traffic of
the carrier
Q: What is the required time of delivery of
goods?
A:
1)Within a reasonable time – IF W/O
contracted stipulation
2) Within specified time – IF W/ contract
stipulation
Saludo Jr. V CA
G.R. No. 95536; March 23, 1992
SC: Delivery of goods should be within a
reasonable time in absence of an agreement
as to delivery
Q: Why reasonable time?
A: Because CC is not insurer against delay of
transportation of goods
Article 1744. A stipulation between the
common carrier and the shipper or owner
limiting the liability of the former for the
loss, destruction, or deterioration of the
goods to a degree less than extraordinary
diligence shall be valid, provided it be:
(1) In writing, signed by the shipper or
owner;
(2) Supported by a valuable consideration
other than the service rendered by the
common carrier; and
(3) Reasonable, just and not contrary to
public policy.
REQTS:
1) In writing and signed by parties
2) Reasonable, just and not contrary
to public policy
3) Valuable consideration other than
payment of services to transport
Q: What kind of Valuable Consideration?
A: Reduction of rate of transport/payment
-limit but not totally exempt CC
BILL OF LADING
3 Stipulations which limit the liability of CC
1) Exempting the carrier for any and all liability
2) Unqualified limit of liability
3) Limiting liability of CC to agreed valuation unless
shipper declares a higher value
1st and 2nd VOID
3rd VALID
Q: Does it apply to private carriers?
A: Yes it applies.
*The 3 Requisites are necessary under ART 1744
for limitation to be valid
Valenzuela v. CA
172 SCRA 316 ; June 30, 1997
Grounds to limit CC liability
1) Strikes/ riots – legal or illegal has no
difference
2) Stipulation limiting the liability of CC to
value
Article 1748. An agreement limiting the common
carrier’s liability for delay on account of strikes
or riots is valid.
Article 1749. A stipulation that the common
carrier’s liability is limited to the value of the
goods appearing in the bill of lading, unless the
shipper or owner declares a greater value, is
binding.
Article 1750. A contract fixing the sum that
may be recovered. by the owner or shipper
for the loss, destruction, or deterioration of
the goods is valid, if it is reasonable and
just under the circumstances, and has been
fairly and freely agreed upon.
REQTS:
1) Freely agreed upon by parties
2) Contract is reasonable and just under the
circumstances
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Q: Effect of limited liability?
A: Voidable – valid until annulled by Shipper as
found under ART 1746
Article 1746. An agreement limiting the
common carrier’s liability may be annulled
by the shipper or owner if the common
carrier refused to carry the goods unless the
former agreed to such stipulation.
*Liability is limited due to acceptance of a
voidable stipulation – such is voidable at the
instance of the shipper
RATIONALE : There may be threat and undue
influence on part of CC
Q: What is the effect of a stipulation limiting the
liability of CC by reason of delay of CC or
change of route?
A: Carrier is still liable – cannot avail of contract
limiting liability if there is violation
CC Cannot claim liability is limited because there
is a change of course – CC acted negligently
which casued the delay
ART 1751. The fact that the common carrier
has no competitor along the line or route, or
a part thereof, to which the contract refers
shall be taken into consideration on the
question of whether or not a stipulation
limiting the common carrier’s liability is
reasonable, just and in consonance with
public policy.
Q: What are the void stipulations?
A: ART 1745
Any of the following or similar stipulations
shall be considered unreasonable, unjust and
contrary to public policy:
(1) That the goods are transported at the risk
of the owner or shipper;
(2) That the common carrier will not be liable
for any loss, destruction, or deterioration of
the goods
(3) That the common carrier need not observe
any diligence in the custody of the goods;
(4) That the common carrier shall exercise a
degree of diligence less than that of a good
father of a family, or of a man of ordinary
prudence in the vigilance over the movables
transported;
(5) That the common carrier shall not be
responsible for the acts or omission of his or
its employees;
(6) That the common carrier’s liability for acts
committed by thieves, or of robbers who do
not act with grave or irresistible threat,
violence or force, is dispensed with or
diminished;
(7) That the common carrier is not responsible
for the loss, destruction, or deterioration of
goods on account of the defective condition of
the car, vehicle, ship, airplane or other
equipment used in the contract of carriage.

Q: Competition with Common Carriers. ART

1751?
A: Even if there is lack of competition,

Q:When there is a stipulation as to the limitation

of liability, what is the presumption?
A: The presumption is that the CC is negligent.

ART. 1752. Even when there is an agreement

limiting the liability of the common carrier in
the vigilance over the goods, the common
carrier is disputably presumed to have been
negligent in case of their loss, destruction or
deterioration.

Q: How to rebut the presumption?

A: CC must show exercise of EO Diligence

Q: How to construe stipulation of CC which is

couched in general terms?
A: Limiting liability of CC as an assurer but not in
exercise of Extraordinary Diligence

[Type the company name]