I.

Governing Laws
a. Constitution
Article III, Section 6 “(t)he liberty of abode and of changing the same within the
limits prescribed by law shall not be impaired except upon lawful order of the court.
Neither shall the right to travel be impaired except in the interest of national security,
public safety, or public health, as may be provided by law.”
b. Civil Code
Article 1732 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
c. Code of Commerce
Article 349 -374
d. COGSA
"Carriage of Goods by Sea Act";
e. Warsaw Convention
is an international convention which regulates liability for international
carriage of persons, luggage, or goods performed by aircraft for reward.
II. Constitutional Provisions
a. Article XII Sec. 11 (Franchise)
Section 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.
b. Article XII Sec. 17 (Temporary Take Over the Operation)
Section 17. In times of national emergency, when the public interest so requires,
the State may, during the emergency and under reasonable terms prescribed by it,
 temporarily take over or direct the operation of any privately-owned public utility or
business affected with public interest.
c. Article XII Sec. 18 (Transfer to Public Ownership)
Section 18. The State may, in the interest of national welfare or defense, establish
and operate vital industries and, upon payment of just compensation, transfer to public
ownership utilities and other private enterprises to be operated by the Government.
d. Article XII Sec. 19 (Prohibit Monopolies)
Section 19. The State shall regulate or prohibit monopolies when the public
interest so requires. No combinations in restraint of trade or unfair competition shall be
allowed.
III. Contract of Transportation (Definition, Elements, and Types)
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.
Elements:
Natural/ Juridical Person
Obligates transport persons, goods, or both
from one place to another, by land, air or water
for a price or compensation
TYPE:
CARRIAGE OF PERSON - PASSENGER

CARRIAGE OF GOODS – SHIPPER/CARRIER

IV. Classifications of a Contract of Carriage (5)

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

V. Parties to a Contract of Transportation

 I. Carriage of Passengers (CC & P) Who are not considered a Passenger? Vda. De Nueca
v Manila Rail Road Co., CA No. 31731 – R, January 30, 1968
A passenger is one who travels in a public conveyance by virtue of a contract, express or
implied, with the carrier as to the payment of the fare, or that which is accepted as an equivalent.
The relation of passenger and carrier commences when one puts himself in the care of the
carrier, or directly under its control, with the bona fide intention of becoming a passenger, and is
accepted as such by the carrier – as where he makes a contract for trasportation and presents
himself at the proper place and in a proper manner to be transported.
II. Carriage of Goods
Shipper – the person who delivers the goods to the carrier for transportation; pays
the consideration or on whose behalf payment is made.
Consignee – person to whom the goods are to be delivered. May be the shipper
himself or a third person who is not actually a party to the contract
VI. Perfection of Contract of Transportation
a. Contract to Carry
perfected by mere consent
b. Contract of Carriage or CC
; perfected by actual use.
contract of carriage - act of delivery of goods ( goods are unconditionally placed
in the possession and control of the carrier and upon their receipt by the carrier for
transportation)
VII. Continuous Offer Rule (Buses, Jeepneys, Street Cars) Dangwa Transportation Co., Inc. v.
CA, GR No. 95582, October 7, 1991
Continuous offer RULE
VIII. Carriage of Passengers (CC & P)
IX. Tests for a Common Carrier (4) First Philippine Industrial Corp., v. CA, GR No. 125948,
December 29, 1998
1. He must be engaged in the business of carrying goods for others as a public
employment, and must hold himself out as ready to engage in the transportation of goods for
person generally as a business and not as a casual occupation;
2. He must undertake to carry goods of the kind to which his business is confined;
3. He must undertake to carry by the method by which his business is conducted and
over his established roads; and
 4. The transportation must be for hire.
X. Characteristics of a Common Carrier
XI. Private Carrier
Home Insurance Co., v. American Steamship Agency, GR No. L – 25599, April 4, 1968 XII.

Distinctions between Common Carrier and Private Carrier (7)

XIII. Conversion of Common Carrier into Private Carrier (Charter by Demise/ Bareboat) Caltex
[Phils] Inc., v. Sulpicio Lines, GR No. 131166, September 30, 1999

XIV. Rules on the ff:

a. Tour Package – the object of a contract of carriage is the transportation of passengers
or goods. It is in this sense that the contract between the parties in this case was an ordinary one
for services and not one of carriage. a common carrier in a contract of carriage is bound by law
to carry passengers as far as human care and foresight can provide using the utmost diligence of
very cautious persons and with due regard for all the circumstances. Tour Package is contract
between the parties is an ordinary one for services, the standard of care required of respondent is
that of a good father of a family under Article 1173 of the Civil Code.12 This connotes
reasonable care consistent with that which an ordinarily prudent person would have observed
when confronted with a similar situation. (Crisostomo vs CA GR 138334 August 25, 2003)
b. Junk Dealer - The true test for a common carrier is not the quantity or extent of the
business actually transacted, or the number and character of the conveyances used in the activity,
but whether the undertaking is a part of the activity engaged in by the carrier that he has held out
to the general public as his business or occupation. If the undertaking is a single transaction, not
a part of the general business or occupation engaged in, as advertised and held out to the general
public, the individual or the entity rendering such service is a private, not a common, carrier. The
question must be determined by the character of the business actually carried on by the carrier,
not by any secret intention or mental reservation it may entertain or assert when charged with the
duties and obligations that the law imposes.”
 –Spouses Teodoro v. Spouses Zarate, 2012
extraordinary diligence
c. Pipeline
“It is engaged in the business of transporting or carrying goods, i.e. petroleum
products, for hire as a public employment. It undertakes to carry for all persons indifferently, that
is, to all persons who choose to employ its services, and transports the goods by land and for
compensation. The fact that petitioner has a limited clientele does not exclude it from the
definition of a common carrier.”
–First Philippine Industrial Corp. v. CA, 1998
d. School Bus
- usually regarded as a private carrier, primarily because he only caters to some
specific or privileged individuals, and his operation is neither open to the indefinite public nor
for public use
However, if such school bus held themselves out as a ready transportation
indiscriminately to the students of a particular school living within or near where they operated
the service and for a fee, it can now be regarded as common carrier
e. Lighterage and Dryage – A common carrier need not have fixed and publicly known
routes. Neither does it have to maintain terminals or issue tickets. To be sure, petitioner fits the
test of a common carrier as laid down in Bascos vs. Court of Appeals. The test to determine a
common carrier is "whether the given undertaking is a part of the business engaged in by the
carrier which he has held out to the general public as his occupation rather than the quantity or
extent of the business transacted." In the case at bar, the petitioner admitted that it is engaged in
the business of shipping and lighterage, offering its barges to the public, despite its limited
clientele for carrying or transporting goods by water for compensation.
f. Travel Agency
g. Towage
h. Arrastre Service (Nature of Business)
i. Stevedoring Service
XV. Registered Owner Rule
a. General Rule
b. Reason
c. Exception to the GR Duavit v. CA, GR No. 82318, May 18, 1989
d. Lease of Vehicle (Registered vs Not Registered)
e. Remedy of the Registered Owner against the Transferee Villanueva v. Domingo, GR No.
144274, September 20, 2004
f. Kabit System
g. Liability against Third Person Zamboanga Transportation Co. v. CA, GR No. L – 25292,
November 29, 1969 h. Boundary System
i. Relationship between Operator and Driver
XVI. Obligations of a Common Carrier in the Carriage of Goods (PASTE) Saludo Jr v. CA, GR
No. 95536, March 23, 1992
XVII. Defenses of a Common Carrier in the Carriage of Goods
1. Ordinary Circumstances : exercised extraordinary diligence
2. Special Circumstances:
a. 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:
i. Flood, storm, earthquake, lightning, or other natural disaster or
calamity;
1. Force majeure, - refer to any event beyond the reasonable
control of the Owner or the Contractor, as the case may be, and
which is unavoidable notwithstanding the reasonable care of
the party affected.
Requisites:
a. Must be the proximate and only cause of the loss
b. Exercise of due diligence to prevent or minimize the loss before,
during or after the occurrence of the disaster (Art. 1739)
c. Carrier has not negligently incurred in delay in transporting the
goods (Art. 1740)
ii. Act of the public enemy in war, whether international or civil;
Requisites:
a. Must be the proximate and only cause of the loss
b. Exercise of due diligence to prevent or minimize the loss before,
during or after the act causing the loss, deterioration or destruction of the
goods (Art. 1739)
iii. Act or omission of the shipper or owner of the goods;
Can be:
 a. Sole and proximate cause: absolute defense
b. Contributory: partial defense. (Art. 1741)
iv. The character of the goods or defects in the packing or in the
containers;
v. Order or act of competent public authority.
b. 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.
c. 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.
XVIII. Defenses of common carrier of passenger
- Extraordinary diligence
o extreme care and caution which very prudent and thoughtful persons use in
securing and preserving their own property.
XIX. Obligations/duties of common Carrier in Passenger
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.

Cases:
ANICETO G. SALUDO, JR., MARIA SALVACION SALUDO, LEOPOLDO G. SALUDO
and SATURNINO G. SALUDO, petitioners, vs. HON. COURT OF APPEALS, TRANS
WORLD AIRLINES, INC., and PHILIPPINE AIRLINES, INC., respondents.

G.R. No. 95536, March 23, 1992, Second Division, REGALADO, J.

The carrier has the right to accept shipper's marks as to the contents of the package
offered for transportation and is not bound to inquire particularly about them in order to take
advantage of a false classification and where a shipper expressly represents the contents of a
package to be of a designated character, it is not the duty of the carrier to ask for a repetition of
the statement nor disbelieve it and open the box and see for itself.

Facts:

Petitioners herein together with Pomierski and Son Funeral Home of Chicago brought the
remains of petitioners’ mother to Continental Mortuary Air Services (CMAS) which booked the
shipment of the remains from Chicago to San Francisco by Trans World Airways (TWA) and
from San Francisco to Manila with Philippine Airlines (PAL).

The remains were taken to the Chicago Airport, but it turned out that there were two (2)
bodies in the said airport. Somehow the two (2) bodies were switched, and the remains of
petitioners’ mother was shipped to Mexico instead.

The shipment was immediately loaded on another PAL flight and it arrived the day after
the expected arrival. Petitioners filed a claim for damages in court. Petitioners consider TWA's
statement that "it had to rely on the information furnished by the shipper" a lame excuse and that
its failure to prove that its personnel verified and identified the contents of the casket before
loading the same constituted negligence on the part of TWA.

The lower court absolved both airlines and upon appeal it was affirmed by the court.

Issue:
Whether or not private respondents is liable for damages for the switching of the two
caskets.

Ruling:

No. The Supreme Court concluded that the switching occurred or, more accurately, was
discovered on October 27, 1976; and based on the above findings of the Court of appeals, it
happened while the cargo was still with CMAS, well before the same was place in the custody of
private respondents. Verily, no amount of inspection by respondent airline companies could have
guarded against the switching that had already taken place. Or, granting that they could have
opened the casket to inspect its contents, private respondents had no means of ascertaining
whether the body therein contained was indeed that of Crispina Saludo except, possibly, if the
body was that of a male person and such fact was visually apparent upon opening the casket.
However, to repeat, private respondents had no authority to unseal and open the same nor did
they have any reason or justification to resort thereto.

It is the right of the carrier to require good faith on the part of those persons who deliver
goods to be carried, or enter into contracts with it, and inasmuch as the freight may depend on
the value of the article to be carried, the carrier ordinarily has the right to inquire as to its value.
Ordinarily, too, it is the duty of the carrier to make inquiry as to the general nature of the articles
shipped and of their value before it consents to carry them; and its failure to do so cannot defeat
the shipper's right to recovery of the full value of the package if lost, in the absence of showing
of fraud or deceit on the part of the shipper. In the absence of more definite information, the
carrier has a the right to accept shipper's marks as to the contents of the package offered for
transportation and is not bound to inquire particularly about them in order to take advantage of a
false classification and where a shipper expressly represents the contents of a package to be of a
designated character, it is not the duty of the carrier to ask for a repetition of the statement nor
disbelieve it and open the box and see for itself. However, where a common carrier has
reasonable ground to suspect that the offered goods are of a dangerous or illegal character, the
carrier has the right to know the character of such goods and to insist on an inspection, if
reasonable and practical under the circumstances, as a condition of receiving and transporting
such goods.

It can safely be said then that a common carrier is entitled to fair representation of the
nature and value of the goods to be carried, with the concomitant right to rely thereon, and
further noting at this juncture that a carrier has no obligation to inquire into the correctness or
sufficiency of such information. The consequent duty to conduct an inspection thereof arises in
the event that there should be reason to doubt the veracity of such representations. Therefore, to
be subjected to unusual search, other than the routinary inspection procedure customarily
undertaken, there must exist proof that would justify cause for apprehension that the baggage is
dangerous as to warrant exhaustive inspection, or even refusal to accept carriage of the same; and
it is the failure of the carrier to act accordingly in the face of such proof that constitutes the basis
of the common carrier's liability.

In the case at bar, private respondents had no reason whatsoever to doubt the truth of the
shipper's representations. The airway bill expressly providing that "carrier certifies goods
received below were received for carriage," and that the cargo contained "casketed human
remains of Crispina Saludo," was issued on the basis of such representations. The reliance
thereon by private respondents was reasonable and, for so doing, they cannot be said to have
acted negligently. Likewise, no evidence was adduced to suggest even an iota of suspicion that
the cargo presented for transportation was anything other than what it was declared to be, as
would require more than routine inspection or call for the carrier to insist that the same be
opened for scrutiny of its contents per declaration.

Dangwa Transportation Co., Inc. v CA GR No. 95582 Oct. 7, 1991

Facts: On May 13, 1985, private respondents filed a complaint for damages against petitioners
for the death of Pedrito Cudiamat as a result of a vehicular accident which occurred on March
25, 1985 at Marivic, Sapid, Mankayan, Benguet. Among others, it was alleged that on said date,
while petitioner Theodore M. Lardizabal was driving a passenger bus belonging to petitioner
corporation in a reckless and imprudent manner and without due regard to traffic rules and
regulations and safety to persons and property, it ran over its passenger, Pedrito Cudiamat.
However, instead of bringing Pedrito immediately to the nearest hospital, the said driver, in utter
bad faith and without regard to the welfare of the victim, first brought his other passengers and
cargo to their respective destinations before bringing said victim to the Lepanto Hospital where
he expired.

Issue: W/N respondent court erred in reversing the decision of the trial court and in finding
petitioners negligent and liable for the damages claimed.

Held: No.After a careful review of the evidence on record, we find no reason to disturb the above
holding of the Court of Appeals.
The contention of petitioners that the driver and the conductor had no knowledge that the victim
would ride on the bus, since the latter had supposedly not manifested his intention to board the
same, does not merit consideration. When the bus is not in motion there is no necessity for a
person who wants to ride the same to signal his intention to board. A public utility bus, once it
stops, is in effect making a continuous offer to bus riders.

It is the duty of common carriers of passengers, including common carriers by railroad train,
streetcar, or motorbus, to stop their conveyances a reasonable length of time in order to afford
passengers an opportunity to board and enter, and they are liable for injuries suffered by
boarding passengers resulting from the sudden starting up or jerking of their conveyances while
they are doing so.

It has also been repeatedly held that in an action based on a contract of carriage, the court need
not make an express finding of fault or negligence on the part of the carrier in order to hold it
responsible to pay the damages sought by the passenger. By the contract of carriage, the carrier
assumes the express obligation to transport the passenger to destination safely and to 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. This
is an exception to the general rule that negligence must be proved, and it is therefore incumbent
upon the carrier to prove that it has exercised extraordinary diligence as prescribed in Articles
1733 and 1755 of the Civil Code.

Light Rail Transit Authority & Rodolfo Roman v. Marjorie Navidad & Prudent Security
Agency
G.R. No. 145804, February 6, 2003
Vitug, J.
FACTS:
On 14 October 1993, about 7:30 in the evening, Nicanor Navidad, then drunk, entered the
EDSA LRT station after purchasing a token. While Navidad was standing on the platform near
the LRT tracks, the assigned security guard Junelito Escartin approached Navidad. A
misunderstanding between them was apparently ensued that led to a fist fight. No evidencewas
adduced to indicate how the fight started or who, between the two, delivered the first blow or
how Navidad later fell on the LRT tracks. At the exact moment that Navidad fell, an LRT train,
operated by petitioner Rodolfo Roman, was coming in. Navidad was struck by the moving train,
and he was killed instantaneously.
The widow of Nicanor, Marjorie Navidad, along with her children, filed a complaint for
damages against Junelito Escartin, Rodolfo Roman, the LRTA, the Metro Transit Organization,
Inc. (Metro Transit), and Prudent Security Agency for the death of her husband.Prudent Security
Agency denied liability and averred that it had exercised due diligence in the selection and
supervision of its security guards.The LRTA and Roman presented their evidence while Prudent
and Escartinfiled a demurrer contending that Navidad had failed to prove that Escartin was
negligent in his assigned task. 
 The RTC Pasig ruled against Prudent Security Agency and Junelito Escartin ordering them
to pay for actual and moral damages, the attorney’s fees and cost of suit, and dismissed the
complaint against LRTA and Roman for lack of merit
Prudent appealed to the Court of Appeals and the court modified the lower court’s decision
by exonerating Prudent from any liability for the death of Nicanor Navidad and, instead, holding
the LRTA and Roman jointly and severally liable.
ISSUE:
Is the LRTA liable for the death of Nicanor Navidad?
RULING:
Yes, LRTA is liable.
The law requires common carriers to carry passengers safely using the utmost diligence of very
cautious persons with due regard for all circumstances. Such duty of a common carrier to provide
safety to its passengers so obligates it not only during the course of the trip but for so long as the
passengers are within its premises and where they ought to be in pursuance to the contract of
carriage. The statutory provisions render a common carrier liable for death of or injury to
passengers (a) through the negligence or willful acts of its employees or b) on account of willful
acts or negligence of other passengers or of strangers if the common carriers employees through
the exercise of due diligence could have prevented or stopped the act or omission. In case of such
death or injury, a carrier is presumed to have been at fault or been negligent, and by simple proof
of injury, the passenger is relieved of the duty to still establish the fault or negligence of the
carrier or of its employees and the burden shifts upon the carrier to prove that the injury is due to
an unforeseen event or to force majeure.
The foundation of LRTA’s liability is the contract of carriage and its obligation to indemnify
the victim arises from the breach of that contract by reason of its failure to exercise the high
diligence required of the common carrier. In the discharge of its commitment to ensure the safety
of passengers, a carrier may choose to hire its own employees or avail itself of the services of an
outsider or an independent firm to undertake the task. In either case, the common carrier is not
relieved of its responsibilities under the contract of carriage.

Del Prado v. MERALCO, G.R. No. L-29462 (March 7, 1929)

Facts: Teodorico Florenciano, Meralco’s motorman, was driving the company’s street car along
Hidalgo Street. Plaintiff Ignacio Del Prado ran across the street to catch the car. The motorman
eased up but did not put the car into complete stop. Plaintiff was able to get hold of the rail and
step his left foot when the car accelerated. As a result, plaintiff slipped off and fell to the ground.
His foot was crushed by the wheel of the car. He filed a complaint for culpa contractual.
Issues:
(1) Whether the motorman was negligent
(2) Whether Meralco is liable for breach of contract of carriage
(3) Whether there was contributory negligence on the part of the plaintiff
Held:
(1) We may observe at the outset that there is no obligation on the part of a street railway
company to stop its cars to let on intending passengers at other points than those appointed for
stoppage. Nevertheless, although the motorman of this car was not bound to stop to let the
plaintiff on, it was his duty to do no act that would have the effect of increasing the plaintiff's
peril while he was attempting to board the car. The premature acceleration of the car was, in our
opinion, a breach of this duty.
(2) The relation between a carrier of passengers for hire and its patrons is of a contractual nature;
and a failure on the part of the carrier to use due care in carrying its passengers safely is a breach
of duty (culpa contractual). Furthermore, the duty that the carrier of passengers owes to its
patrons extends to persons boarding the cars as well as to those alighting therefrom. Where
liability arises from a mere tort (culpa aquiliana), not involving a breach of positive obligation,
an employer, or master, may exculpate himself by proving that he had exercised due diligence to
prevent the damage; whereas this defense is not available if the liability of the master arises from
a breach of contractual duty (culpa contractual). In the case before us the company pleaded as a
special defense that it had used all the diligence of a good father of a family to prevent the
damage suffered by the plaintiff; and to establish this contention the company introduced
testimony showing that due care had been used in training and instructing the motorman in
charge of this car in his art. But this proof is irrelevant in view of the fact that the liability
involved was derived from a breach of obligation.
(3) It is obvious that the plaintiff's negligence in attempting to board the moving car was not the
proximate cause of the injury. The direct and proximate cause of the injury was the act of
appellant's motorman in putting on the power prematurely. Again, the situation before us is one
where the negligent act of the company's servant succeeded the negligent act of the plaintiff, and
the negligence of the company must be considered the proximate cause of the injury. The rule
here applicable seems to be analogous to, if not identical with that which is sometimes referred
to as the doctrine of "the last clear chance." In accordance with this doctrine, the contributory
negligence of the party injured will not defeat the action if it be shown that the defendant might,
by the exercise of reasonable care and prudence, have avoided the consequences of the
negligence of the injured party. The negligence of the plaintiff was, however, contributory to the
accident and must be considered as a mitigating circumstance.
PNR v BRUNTY [G.R. No. 169891. November 2, 2006.] PHILIPPINE
NATIONAL RAILWAYS, petitioner, vs. ETHEL BRUNTY and JUAN
MANUEL M. GARCIA, respondents.

FACTS:
Rhonda Brunty, daughter of respondent Ethel Brunty and an American citizen,
came to the Philippines for a visit sometime in January 1980. Prior to her
departure, she, together with her Filipino host Juan Manuel M. Garcia, traveled to
Baguio City on board a Mercedes Benz sedan with plate number FU 799, driven by
Rodolfo L. Mercelita. It was about 12:00 midnight, January 25, 1980. By then,
PNR Train No. T- 71, driven by Alfonso Reyes, was on its way to Tutuban, Metro
Manila 4 as it had left the La Union station at 11:00 p.m., January 24, 1980.

By 2:00 a.m., Rhonda Brunty, Garcia and Mercelita were already approaching the
railroad crossing at Barangay Rizal, Moncada, Tarlac. Mercelita, driving at
approximately 70 km/hr, drove past a vehicle, unaware of the railroad track up
ahead and that they were about to collide with PNR Train No. T-71. Mercelita was
instantly killed when the Mercedes Benz smashed into the train; the two other
passengers suffered serious physical injuries. 5 A certain James Harrow 6 brought
Rhonda Brunty to the Central Luzon Doctor's Hospital in Tarlac, where she was
pronounced dead after ten minutes from arrival. Garcia, who had suffered severe
head injuries, was brought via ambulance to the same hospital. He was transferred
to the Manila Doctor's Hospital, and later to the Makati Medical Center for further
treatment. 7

On July 28, 1981, Ethel Brunty sent a demand letter 8 to the PNR demanding
payment of actual, compensatory, and moral damages, as a result of her daughter's
death. When PNR did not respond, Ethel Brunty and Garcia, filed a complaint 9 for
damages against the PNR before the RTC of Manila.

Allegations:
1. direct and proximate result of the gross and reckless negligence of PNR in not
providing the necessary equipment at the railroad crossing in Barangay Rizal,
Municipality of Moncada, Tarlac.

2. there was no flagbar or red light signal to warn motorists who were about to
cross the railroad track, and that the flagman or switchman was only equipped with
a hand flashlight
3. failed to supervise its employees in the performance of their respective tasks and
duties, more particularly the pilot and operator of the train

Defenses:
1. right of way on the railroad crossing in question, and that it has no legal duty to
put up a bar or red light signal in any such crossing. 2. there were adequate, visible,
and clear warning signs strategically posted on the sides of the road before the
railroad crossing.
3. the immediate and proximate cause of the accident was Mercelita's negligence,
and that he had the last clear chance to avoid the accident. The driver disregarded
the warning signs, the whistle blasts of the oncoming train and the flashlight
signals to stop given by the guard

DECISION OF LOWER COURTS:

1. RTC: directed PNR to pay

2. CA: affirmed RTC with modification as to amount of damages

ISSUE:
Is PNR liable?

RULING:
Yes

the alleged safety measures installed by the PNR at the railroad crossing is not only
inadequate but does not satisfy well-settled safety standards in transportation

An examination of the photographs of the railroad crossing at Moncada, Tarlac

presented as evidence by PNR itself would yield the following:

(1.) absence of flagbars or safety railroad bars;

(2.) inadequacy of the installed warning signals; and
(3.) lack of proper lighting within the area. Thus, even if there was a flagman
stationed at the site as claimed by PNR (petitioner), it would still be impossible to
know or see that there is a railroad crossing/tracks ahead, or that there is an
approaching train from the Moncada side of the road since one's view would be
blocked by a cockpit arena
To prove contributory negligence, it is still necessary to establish a causal link,
although not proximate, between the negligence of the party and the succeeding
injury. In a legal sense, negligence is contributory only when it contributes
proximately to the injury, and not simply a condition for its occurrence.

The court below found that there was a slight curve before approaching the tracks;
the place was not properly illuminated; one's view was blocked by a cockpit arena;
and Mercelita was not familiar with the road. Yet, it was also established that
Mercelita was then driving the Mercedes Benz at a speed of 70 km/hr and, in fact,
had overtaken a vehicle a few yards before reaching the railroad track. Mercelita
should not have driven the car the way he did. However, while his acts contributed
to the collision, they nevertheless do not negate petitioner's liability. The record is
bereft of any allegation and proof as to the relationship between Mercelita (the
driver) and Rhonda Brunty. Hence, the earlier finding of contributory negligence
on the part of Mercelita, which generally has the effect of mitigation of liability,
does not apply. 

Vicente Calalas vs. Court of Appeals, Eliza Jujeurche Sunga and Francisco Salva
G.R. No. 122039, May 31, 2000
332 SCRA 356
FACTS:
Respondent, Eliza Sunga took a passenger jeepney owned and operated by petitioner Vicente
Calalas. The jeepney was already filled with passengers so she was given by the conductor an
“extension seat,” a wooden stool at the back of the door. As she was seated at the rear end of the
vehicle, Sunga gave way to the outgoing passenger. Unfortunately, a truck driven by Iglecerio
Verena and owned by Francisco Salva bumped the left rear portion of the jeepney. As a result,
Sunga was injured.
Sunga then filed a complaint for damages against Calalas, alleging violation of the contract of
carriage by the former in failing to exercise the diligence required of him as a common carrier.
Calalas, on the other hand, filed a third-party complaint against Francisco Salva, the owner of the
truck.

RTC’s decision: Absolved Calalas of liability and ruled that Salva as third-party defendant was
responsible for the accident. It took cognizance of another case (Civil Case No. 3490), filed by
Calalas against Salva and Verena, for quasi-delict, in which Branch 37 of the same court held
Salva and his driver Verena jointly liable to Calalas for the damage to his jeepney.
CA’s decision: reversed RTC’s ruling on the ground that Sunga’s cause of action was based on a
contract of carriage, not quasi-delict, and that the common carrier failed to exercise the diligence
required under the Civil Code. It also dismissed the third-party complaint against Salva and
adjudged Calalas liable for damages to Sunga.
ISSUES:
1. Whether or not respondent passenger is bound by the ruling in Civil Case No. 3490 finding the
driver and the owner of the truck liable for quasi-delict.
2. Whether or not respondent carrier is responsible for the injury caused to its passenger when
the accident was caused by another vehicle.
3. Whether or not the bumping of the jeepney by the truck owned by Salva was a caso fortuito.

4. Whether or not respondent passenger is entitled to moral damages.

RULING:
1. No. The principle of res judicata does not apply where a party in a pending case was never a
party in a previous one. And besides, the issues in Civil Case No. 3490 and in the present case
are not the same. The issue in Civil Case No. 3490 was whether Salva and his driver Verena
were liable for quasi-delict for the damage caused to petitioner’s jeepney. On the other hand, the
issue in this case is whether petitioner is liable on his contract of carriage. The first, quasi-delict,
also known as culpa aquiliana or culpa extra contractual, has as its source the negligence of the
tortfeasor. The second, breach of contract or culpa contractual, is premised upon the negligence
in the performance of a contractual obligation.

2. Yes. The liability of petitioner arises from his negligence in the performance of his contractual
obligation or breach of contract of carriage. Art. 1756 of the Civil Code provides that common
carriers are presumed to have been at fault or to have acted negligently in case of death or
injuries to passengers, unless they prove that they observed extraordinary diligence as defined in
Arts. 1733 and 1755 of the Code. This provision necessarily shifts to the common carrier the
burden of proof. It is now the duty of petitioner to prove that he observed extraordinary diligence
in the care of his passengers. However, in this case, petitioner failed to prove that he observed
extraordinary diligence in the care of his passengers. It was found that the jeepney was not
properly parked and he took more passengers than the allowed seating capacity.

3. No. The taking of an “extension seat” is not an implied assumption of risk on the part of the
passenger. A caso fortuito is an event which could not be foreseen, or which, though foreseen,
was inevitable. This requires that the following requirements be present: (a) the cause of the
breach is independent of the obligor’s will; (b) the event is unforeseeable or unavoidable; (c) the
event is such as to render it impossible for the obligor to fulfill his obligation in a normal
manner, and (d) the obligor did not take part in causing the injury to the creditor. Petitioner
should have foreseen the danger of parking his jeepney with its body protruding two meters into
the highway.

4. No. Petitioner did not act in bad faith in the performance of the contract of carriage. As a
general rule, moral damages are not recoverable in actions for damages predicated on a breach of
contract for it is not one of the items enumerated under Art. 2219 of the Civil Code. As an
exception, such damages are recoverable: (1) in cases in which the mishap results in the death of
a passenger, as provided in Art. 1764, in relation to Art. 2206(3) of the Civil Code; and (2) in the
cases in which the carrier is guilty of fraud or bad faith, as provided in Art. 2220.

XX. Obligations of Shipper, Consignee and Passenger

a. Twin Duty
 It is the obligation of the shipper to exercise due diligence in avoiding damage to
the goods that are being transported. It is likewise an obligation of the carrier to ensure that the
exercise of due diligence is observe I the transportation of the goods and deliver such goods to its
destination.
b. When is the CC not liable
Common carrier may not be held liable if the common carrier can show that he
observe extraordinary diligence and proved that it is the negligence of the shipper is the
proximate and only cause of the loss. the shipper can overcome the presumption of negligence if
they can prove any of the following acts of the shipper:
1. failure of the shipper to disclose the nature of goods
2. improper marking or direction as to destination
3. improper loading when he assumes such responsibility
*the shipper must see to it that the goods are properly packed, otherwise the liability of
the carrier may be mitigated or barred depending on the circumstances.
c. Assumption of Risk (Calalas v. CA., GR No. 122039, May 31, 2000)
The doctrine of assumption of risk is a defense in negligence cases involving
quasi-delicts, wherein one who voluntarily assumed the risk of injury from a known danger is
debarred from a recovery. It is said that one who knows, appreciates, and deliberately exposes
himself to a danger ‘assumes the risk’ thereof. The doctrine of assumption of risk is in effect, a
waiver of a right to recover. According to the Civil Code, “Rights may be waived, unless the
waiver is contrary to law, public order, public policy, morals, or good customs or prejudicial to a
third person with a right recognized by law.” In this regard, such may be waived by express
consent, or by implied assumption, considering the nature and circumstances surrounding the act
or omission.
Elements:
a. the plaintiff must know that the risk is present;
b. he must further understand its nature;
c. his choice to incur it is free and voluntary
*. In assumption of risk, the knowledge of the risk is present, while in fortuitous
event, a defendant is not liable when an event which could not be foreseen, or which though
foreseen, was inevitable
XXI. Extraordinary Diligence
a. Definitions
Extraordinary diligence is that extreme care and caution which very prudent and
thoughtful persons exercise under the same or similar circumstances.

b. Reasons
A common carrier is bound to carry the passengers safely as far as human care
and foresight can provide, using the utmost deligence of very cautions persons, with due regard
for all circumstances. This extraordinary diligence required of common carriers is calculated to
protect the passengers from the tragic mishaps that frequently occur in connection with rapid
modern transportation. This high standard of care is imperatively demanded by the
precariousness of human life and by the consideration that every person must in every way be
safeguarded against all injury
 c. Doctrine of Presumption of Negligence
As provided by ART. 1756. In case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted negligently, unless they prove that
they observed extraordinary diligence as prescribed in articles 1733 and 1755.

d. Stipulations Limiting the Carrier’s Liability (3 Requisites)

As provided by 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.

e. Passengers (Lara v. Valencia, GR No. 9907, June 30, 1958)

A person who has entered into a contract of carriage, express or implied, with the
carrier. They are entitled to extraordinary diligence from the common carrier.
 The following are not considered passengers, and are entitled to ordinary diligence
only:
 One who has not yet boarded any part of a vehicle regardless of whether or not he
has purchased a ticket;
 One who remains on a carrier for an unreasonable length of time after he has been
afforded every safe opportunity to alight;
 One who has boarded by fraud, stealth, or deceit;
 One who attempts to board a moving vehicle, although he has a ticket, unless the
attempt be with the knowledge and consent of the carrier;
 One who has boarded a wrong vehicle, has been properly informed of such fact,
and on alighting, is injured by the carrier;
 Invited guests and accommodation passengers. (Lara vs. Valencia)
 One who rides any part of the vehicle which is unsuitable or dangerous or which
he knows is not designed or intended for passengers

f. Res Ipsa Loquitor (3 Requisites) FGU Insurance v. GP Sarmiento Trucking, GR

No. 141910, August 6, 2002
Res ipsa loquitur may be allowed only when the following are present:
(a) the event is of a kind which does not ordinarily occur in the absence of
negligence;
(b) other responsible causes, including the conduct of the plaintiff and third
persons, are sufficiently eliminated by the evidence; and
(c) the indicated negligence is within the scope of the defendant's duty to the
plaintiff
g. EOD in Carriage by Sea
i. Seaworthiness Caltex [Phils], Inc. v. Sulpicio Lines, GR No. 131166,
September 30, 1999
As described in the case of caltex vs sulpicio lines, a vessel to be
seaworthy, it must be adequately equipped for the voyage and manned with a
 sufficient number of competent officers and crew. The failure of a common
carrier to maintain in seaworthy condition the vessel involved in its contract of
carriage is a clear breach of its duty prescribed in Article 1755 of the Civil Code."

ii. Cargoworthiness
it means that the ship must be an efficient store-house for the cargo. The
ship must be sufficiently strong and equipped to carry the particular cargo which
such vessel contracted to carry and such cargo must be loaded in a safe manner to
proceed the voyage.

iii. Overloading
it is a must that the ship should carry passenger and cargo within its
carrying capacity. Any passenger and cargo in excess constitutes over loading.
iv. Deviation

As provided by ARTICLE 359, If there is an agreement between the

shipper and the carrier as to the road over which the conveyance is to be made, the carrier
may not change the route, unless it be by reason of force majeure; and should he do so
without this cause, he shall be liable for all the losses which the goods he transports may
suffer from any other cause, beside paying the sum which may have been stipulated for
such case.
When on account of said cause of force majeure, the carrier had to take another
route which produced an increase in transportation charges, he shall be reimbursed for
such increase upon formal proof thereof.
v. Transshipment Magellan Corp. v. CA, GR No. 95529, August 22, 1991
Transshipment refers to the transfer of cargo from one (1) vessel or
conveyance to another vessel for further transit to complete the voyage and carry
the cargo to its final destination.

h. EOD in Carriage by Land

i. Condition of Vehicle
common carriers that offer transportation by land are required to make
sure that the vehicle that they are using are in good order and condition.
ii. Violation of Traffic Rules Marikina Auto Line Transport Corp. v. People,
GR No. 152040, March 31, 2006
as provided by Article 2185 of the New Civil Code "unless there is proof
to the contrary, it is presumed that a person driving a motor vehicle has been
negligent, if at the time of mishap, he was violating any traffic regulation."

I. EOD in Air Transportation

i. Airworthiness
Two main factors determine if an aircraft is airworthy: The aircraft
conforms to its type certificate and authorized modifications; and. The aircraft
must be in condition for safe operation.
ii. Passengers Denied Boarding
 Passengers who are denied boarding because the flight is over booked are
given denied-boarding compensation that should consist at least of the value of
the fare not flown plus damages of a fixed amount. (CAB)
iii. Overbooking
As defined by DOTC-DTI JOI no. Series of 2012, overbooking is the
practice by air carriers of selling confirmed reserved space beyond the actual seat
capacity of the aircraft.
“Airline flights may be overbooked, and there is a slight chance that a seat
will not be available on a flight for which a person has a confirmed reservation. If
the flight is overbooked, no one will be denied a seat until airline personnel first
ask for volunteers willing to give up their reservation in exchange for
compensation of the airline’s choosing. If there are not enough volunteers, the
airline will deny boarding to other persons in accordance with its particular
boarding priority. (PAL)
10.1 While it is an accepted practice for an air carrier to overbook its flights, any
expense, consequence, or inconvenience caused to affected passengers must be
borne by the air carrier, as follows:
(a) The air carrier shall determine the number of passengers in excess of
the actual seat capacity of the aircraft.
(b) The air carrier shall announce that the flight is overbooked, and that it
is looking for volunteers willing to give up their seats in exchange for air
carrier compensation.

(c) The air carrier shall provide the interested passengers or volunteers a
list of amenities and offers, which they can choose from, which list of
amenities shall always include the option to be given priority booking in
the next flight with available space or to be endorsed to another air carrier
upon payment of any fare difference, and provided that space and other
circumstances permit such accommodation, at the option of the passenger,
and/or a cash incentive.
(d) In case the number of volunteers is not enough to resolve the
overbooking, the air carrier shall increase the compensation package by
certain degrees or by adding more amenities/services until the required
number of volunteers is met.
i. Instances when a CC Failed to Exercise EOD (Macenas v. CA, GR No. 88052,
December 14, 1989)
In case of death of or injuries to passengers, common carriers are presumed to
have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence. Moreover, 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. (ART. 1756)

Bill of lading, maritime commerce