TRANSPORTATION LAW I. IntRopucTION Governing Laws (a) Articles 1732 to 1763 of the Civil Code; (b) Sections 349 to 379, 573 to 736, and 806-869 of the Code of Commerce. In case of conflict between the two (2) sets of laws, the Civil Code, being the later law, generally prevails. There are special laws that also govern particular cases such as the Public Service Act, the Carriage of Goods by Sea Act, the Land Transportation and Traffic Code, etc. 2, Concept of “Common Carrier” ‘A“common carrier” is a person, corporation, firm or association, engaged in the business of carrying or transporting passengers and/or goods, by land, water, or air, for compensation, offering their services to the public. (Art. 1732, Civil Codey’ A.common carrier is a person or corporation whose regular business is to carry passenger or property for all persons who may choose to employ and to remunerate him. Caltex (Philigpines), Inc, v, Suipicio Lines, Ine., 315 SCRA 709 (1999) Acommon carrier is one who holds himself out to the public as eng aged in the business of transporting persons or property from place to place, for compensation, offering his services to the public generally. First Philippine Industrial Corp. v. Court of Appeals, 300 SCRA. 661 (1998). Perena v. Zarate 679 SCRA 208 (2012) A carrier is a person or corporation who undertakes to transport or convey goods or persons from one place to another, gratuitously or ‘Cada! definition reiterated in Lea IMer Indus, Inc. v. Malayan Insurance Co., Inc, 471 SCRA 698 (2005); Aracia v. Caurt of Appeals, 210 SGRA 624 (199%), 129130 COMMERCIAL LAW REVIEW for hire. The true test for a common cartier 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. Thus, despite catering to a limited clientele, the Perenas operated as a common carrier because they 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. As such, there were bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances cf each case. Cruz v. Sun Holidays, Inc. 622 SCRA 389 (2010) Art. 1732 of Civil Code defining "common carriers’ has deliberately refrained from making distinctions on whether the carrying of persons or goods is the carrier's principal business, whether it is offered on a regular basis, or whether it is offered to the general public. Fram the nature of their business and public policy, common carriers are bound to observe extraordinary diligence for the safety of the passengers transported by them according to all the circumstances of each case. Crisostomo v. Court of Appeals 409 SCRA 528 (2003) Travel Agent Not a Common Carrier. - By definition, a contract of carriage is one whereby a certain person or association of persons obligate themselves. to transport persons, things, or news from one place to another for a fixed price, and they may constitute as private or special carriers and common or public carriers. A travel agent is not a common carrier since he does not undertake to transport @ person from one piace to another, but simply to make travel arrangements in their behalf, which includes the procuring of tickets and facilitating travel permits or visas as well as booking customers for tours. Atravel agent is bound to observe the due diligence of a good father of a family and not the extraordinary diligence imposed on common carriers, First Phil. Industrial v. Court of Appeals 300 SCRA 661 (1998) ‘The test for determining whether a party is @ common carrier is that he must: (2) Be engaged in the business of carrying goods for others as ‘a public employment, and must hold himself out as ready to engage in transportation of goods for person generally as @ business and not as a casual occupation;TRANSPORTATION LAW (b) Undertake to carry goods of the kind to which his business is confined; (c) Undertake to carry by the method by which his business is condueted and over his established roads; (@) Be for transport hire.* ‘entity engaged in carrying of petroleum products over its pipeline network for hire as a public employment is deemed to be a common carrier, because 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 it has limited clientele does not exclude it from the definition of a common carrier. Common Carrier versus Private Carrier National Steel Corp. v. Court of Appeals 283 SCRA 45 (1997) At the outset, it is essential to establish whether the contract of carriage was entered into as a common carrier or as @ private carrier, since the resolution of this preliminary question determines: (a) the law applicable to the case; (b) standard of diligence required of the carrier; and (©) burden of proof applicable to the case. Loadmaster Customs Services v. Glodel Brokerage Corp. 639 SCRA 69 (2011) ‘One engaged in the business of transporting goods by land, through its trucking service, is a common carrier, as distinguished from a private carrier wherein the carriage is generally undertaken by special agreement and it does not hold itself out to carry goods for the general public. Also, a customs broker where the transportation of goods is an integral part of its business. is also regarded as a common carrier.” Loadstar Shipping Co. v. Pioneer Asia Ins. 479 SCRA 655 (2006) Where a company is engaged in the business of transporting car- go by water and for compensation, offering its services indiscriminately to the public, itis, without doubt, a common carrier. The voyage-charter agreement in this case did not in any way convert the common carrier into a private carrier. We have already resolved this issue with finality in Planters Products, Inc. v. Court of Appeals, where we ruled that: First enunciated in Lastimoso v Daliente, 1 CAR 769 (1961). Westwind Shipping Corp. v. UCPB General insurance, 710 SORIA S44 (2013) 131192 COMMERCIAL LAW REVIEW = @ public carrier shall remain as such, notwithstanding the charter of the whole or portion of the vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a time- charter or voyage-charter. It is only when the charter includes both the vessel and its crew, as in a bareboat or demise, that a common carrier becomes private, at least insofar as the particular voyage covering the charter-party is concerned. Indubitably, a shipowner in a time or voyage charter retains possession and control of the ship, although her holds may, for the moment, be the property of the charterer.” PHILAMGEN v. PKS Shipping Co. 401 SCRA 222 (2003) Common Carrier as Public Service = The definition of “common carrier’ can best be shown by looking at the provisions of Art. 1732 of the Civil Code and Sec. 13(b) of the Public Service Act. Much of the distinction between a “common or public carrier’ and a “private or special carrier’ lies in the character of the business, such that if the undertaking is an isolated transaction, not a part of the business or occupation, and the carrier does not hold itself out to carry the goods for the general public or to a limited clientele, although invotving the carriage of goods for a fee, the person or corporation providing such service could very well be just a private carrier. The fact that a person or corporation engaged itself in the business of carrying goods for others, although for a limited clientele, undertaking to carry such for a fee, then the regularity of its activities indicates more than just casual activity on its part, and make it a common carrier.* Neither can the concept of a common carrier change merely because individual contracts are executed or entered into with patrons of the carrier, since such restrictive interpretation would make It easy for @ common carrier to escape liability by the simple expedient of entering into those distinct agreements with clients Asia Lighterage v. Court of Appeals 409 SCRA 340 (2003) Petitioner is clearly a common carrier because its principal business is that of lighterage, offering its barges to the public for carrying or transporting goods by water for compensation, done on an irregular rather than scheduled manner, albeit with an only limited clientele. A common carrier need not have fixed and publicly known routes, nor does it have to maintain terminals or issue tickets. “Tho doctrine that the concept of "common carrier” under Art. 1732 coincides neatly with the nation of “public service," under the Public Service Act (C.A. 1416, as amended) has been reltarated in Calva v. UCPS, General Insurance Co., 379 SCRA 510 (2002).‘TRANSPORTATION LAW National Steel Corp. v. Court of Appeals 283 SCRA 45 (1997) The true nature of a common carriers the carriage of passengers OF ewer Provided it has space, for ail who opt to avail themecce of its transportation service for a fee. A carrier which does nor qualify under the above test is deemed a private carrier. “Generally, private carriage, such as the rendering of tramping setvices, is underiare, by Special agreement and the carrier does not hold himself out to carry in Private carriage, the rights and obligations of parties, including fabilties for damage to cargo, are determined prima ‘ily by stipulations in their contract of carriage or charter party. In such case, the burden of proof is on the other party to show that the private carrier was Tesponsible for the loss of, or injury to, the cargo, ICLV: SC decision was more in conformity with the findings of eth lower court and CA that petitioner was a private carrier san is not In agreement with Bulk of SC decision on the matter] Planters Products v. Court of Appeals 228 SCRA 476 (1993) When carrier in the ordinary course of business transports goods as a common carrier and thereby bound by law to observe A common carrier shall remain as such, notwithstanding the Charter of the whole or portion of a vessel, provided the charter is itis only when the charter includes both the vessel and itr crew, as in & bareboat or demise charter, that a common carrier becomes private, at least insofar as the particular voyage covering the charter party is concerned. "Gling Hersunoez 110 PERSIE, p. 243, uhieh in tum ced Soxoenens & Yusosrouios, p, 364, 183134 be COMMERCIAL LAW REVIEW De Guzman v. Court of Appeals 168 SCRA 612 (1988) Art. 1732 of Civil Code makes no distinction between one ‘whose principal business activity is the carrying of persons or goods ‘or both, and one who does such carrying only as an ancillary activity, nor dogs it make distinctions between one who offers the service to the “general public’ or a narrow segment of the general population, Therefore, one who “back-hauled” goods for other merchants from Manila to Pangasinan, even when such activity was only periodical or ‘occasional and was not its principal line of business would be subject to the responsibilities and obligations of a common carrier.® Malayan Insurance Co. v. Philippines First Insurance Co. 676 SCRA 268 (2012) Accommon carrier becomes a private carrier when it undertakes to carry a special cargo or chartered to a special person only. In such case, the Civil Code provisions on common carriers should not be applied where the carrier is not acting as such but as a private carrier. Mindanao Terminal and Brokerage Services v. Phoenix Assurance Co. of New York 587 SCRA 429 (2009) Stevedoring Not a Gommon Carrier - Mindanao Terminal, a stevedoring company which was charged with the loading and stowing the cargoes, does not operate a business that is classified as a common carrier. Consequently, it had duly exercised the required degree of diligence in loading and stowing the cargoes, which is the ordinary diligence of a good father of a family. There is no specific provision of law that imposes a higher degree of diligence than ordinary diligence for a stevedoring company or one who is charged only with the loading and stowing of cargoes Customs Broker as Common Carrier Schmitz Transport v. Transport Venture, Inc. 456 SCRA 587 (2005) Facts: Schmitz Transport, as customs broker, undertook to transport the cargoes from vessel's shipside to consignee’s warehouse at Cainta. It then retained TVI to send a barge and tugboat at shipside The operation was done outside of the breakwaters and while a storm signal was raised, and cargo was lost due to the rough waves. *Reiterated in Asia Lighterage and Shipping v. Court of Appeals, 409 SCRA. 340 (2002): Calvo v: UCPB General Insurance Co., 378 SORAS10 (2002).TRANSPORTATION LAW Issue 1: Schmitz puts liability solely on TVI, and posits that it ‘cannot be liable for the obligations of a carrier, and that any negligence committed by it was deemed the negligence of its principal. Held 1; Schmitz is liable as a common carrier, As long as a person holds itself to the public for the purpose of transporting goods as.a business, it is already considered a common cartier regardless if it owns the vehicle used or has to hire ane. The fact of loss of the cargo therefore made Schmitz liable to the consignee. Issue 2: TVI posits that its contract was with Schmitz and had no contract of carriage with the consignee, and therefore cannot be liable to the consignee. Held 2:Censignee'sclaim against TVI cannotbe based on the breach of contract of carriage. While TVI acted as private carrier for Schmitz, for which it was under no duty to observe extraordinary diligence, it was stil required to observe ordinary diligence to ensure the proper and careful handling, care and discharge of the carried goods. The gross negligence of TVIis discharging the cargo outside of the breakwaters under a storm signal constituted negligence for which it can be held liable to consignee. A.F, Sanchez Brokerage v. Court of Appeals 44T SCRA 427 (2005) Facts: Brokerage firm was engaged as customs broker but with duties to pay the customs duties, taxes and storage fees for the cargo and to deliver the merchandise to the client's premises. Evidence showed that the merchandise were in good condition when delivered to the brokerage firm atthe NAIA, but were damaged when delivered to the client. Brokerage firm contends that it was the defect in the packaging of the merchandise which it raised at the NAIA that was the main cause for the damage, and therefore its negligence cannot be presumed, and was not liable for the obligations of a common carrier. Held; Brokerage firm is also considered a common carrier, and for which the delivery of the merchandise in bad condition raises the presumption of negligence. Art, 1732 does not distinguish between one whose principal business activity is the carrying of goods and one who does such carrying only as an ancillary activity. The rule is that if the improper packing is known to the carrier or his employees or is apparent upon ordinary observation, but the common cartier nevertheless accepts the same without protest or exception, he is not relieved of liability for the resulting damage. Calvo v. UCPB Gen. Insurance Co., Inc. 379 SCRA 510 (2002) When transportation of goods is an integral part of a customs broker's functions, it is also a common carrier, for to declare otherwise 195138 COMMERCIAL LAW REVIEW would be to deprive those with whom it contracts the protection which the law affords them notwithstanding the fact that the obligation to carry goods for its customers, is part and parcel of its business. Lack of Certificate of Public Convenience Loadstar Shipping v. Court of Appeals 315 SCRA 338 (1999) Certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers, which liability arises from the moment a person or firm acts as a common carrier, without regard to whether or not such carrier has also complied with the requirements of the applicable regulatory statute and implementing regulations and has been granted a certificate of public convenience or other franchise. Liability of the Registered Owner of Motor Vehicle Villanueva v. Domingo 438 SCRA 485 (2004) SRST: any voice is ci responsible to the public and third persons while irrelevant to determi of the registered owner whom the law holds primarily and directly responsible for any accident, injury or death cau: eration of the vehicle in the streets and highways. he main je th eany entiation cf the Or any at famage or injury caused by the vehicle, Equitable Leasing Corp. v. Suyong 388 SCRA 445 (2002) Registered Owner of Vehicle Liable for the Deaths and Injuries: Regardless of sale made of a motor vehicle, the registered owner is the lawful operator insofar as the public and third persons are concerned. In contemplation of law, the owner operator of record is the employer of the driver, the actual operator and employer being considered as merely its agent. 3. Nature of Business and Degree of Diligence of Common Carriers China Airlines v. Chiok 407 SCRA 432 (2003) The business of common carriers is imbued with public interest and duty, and the law governing them imposes an exacting standard. "Reiterated in RCJ Bus Lines, Inc. ¥.Standrd Insurance Co, Ine, 655 SCRA 893 (2011).TRANSPORTATION LAW Japan Airlines v. Simangan 552 SCRA 344 (2008) In an action for breach of contract of carriage, all that is required of plaintiff is to prove the existence of such contract and its non- performance by the carrier through the latter's failure to carry the passenger safely to his destination Northwest Airlines, Inc. v. Chiong 543 SCRA 308 (2008) Although initially, the burden of proof was with the passenger to prove that there was a breach af contract of carriage, the burden of evidence shifted to the airline when the former adduced sufficient evidence to prove the facts he had alleged ~ at that point, the airline had the burden of going forward to controvert [passenger's] prima facie case, the burden of evidence to establish its claim. Singapore Airlines Ltd. v. Fernandez 417 SCRA 474 (2003) The contract of air carriage is @ peculiar one. Imbued with public interest, the law requires commen carriers to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons with due regard for all the circumstances. In action for breach of contract of carriage, the aggrieved party does not have to prave that the commen carrier was at fault or was negligent. All that is necessary to prove is the existence of the contract and the fact of its non-performance by the carrier, Delsan Transport Lines v. Court of Appeals 368 SCRA 24 (2001) From the nature of their business and for reasons of public policy, common carriers até bound to observe extraordinary diligence in the vigilance over the goods and for the safety of passengers transported by them, according to all the circumstances of each case. In the event of loss, destruction or deterioration of the insured goods, common carriers shall be responsible unless the same is brought about. among others, by flood, storm, earthquake, lightning or other natural disaster or calamity. In all other cases, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence.* *R Transport Corp. v. Panta, 588 SCRA TAT (2008). 137138 COMMERCIAL LAW REVIEW Loadstar Shipping v. Court of Appeals 315 SCRA 339 (1999) The business of common carriers impinges directly and intimately upon the safety and well-being and property of the members of the general community who happen to deal them. The law imposes duties and liabilities upon common carriers for the safety and protection of those who utilize their services and the law cannot allow @ common carrier to render such duties and liabilities merely facultative by simply failing to obtain the necessary permits and authorizations Degree of Diligence Required; Presumption of Fault Victory Liner, Inc. v. Gammad 444 SCRA 355 (2004) In a contract of carriage, it is presumed that the common carrier was al faultinegligent when a passenger dies or is injured. Unless presumption is rebutted, the courts need not even make an express finding of fault or negligence on the part of the common carrier. Lea Mer Industries, Inc. v. Malayan Insurance Co., Inc. 471 SCRA 698 (2005) Extraordinary ciligence requires rendering service with the greatest skill and foresight to avoid damage and destruction to the goods: entrusted for carriage and delivery. Common carriers are presumed to have been at fault or to have acted negligently for loss of or damage to ‘the goods that they have transported. Loadmaster Customs Services v. Glodel Brokerage Corp. 639 SCRA 69 (2011) “Extraordinary diligence” is that extreme measure of care and caution which persons of unusual prudence and circumspection observe for securing or 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. The responsibility of two or more persons who are liable for a quasi-detict is solidary. Whenever an employee's negligence causes damage or injury to another, there instantly arises @ presumption juris tantum that the employer failed to exercise diligentissimi patris families in the selection (culpa in eligienda) or supervision (culpa in vigilando) of its ‘employees.