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.

Article 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 the goods and for the safety of the
passengers transported by them, according to all the circumstances
of each case.

Such extraordinary diligence in the vigilance over the goods is

further expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and
7, while the extraordinary diligence for the safety of the passengers
is further set forth in articles 1755 and 1756.

SUBSECTION 2. Vigilance Over 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.

Article 1735. In all cases other than those mentioned in Nos. 1, 2,

3, 4, and 5 of the preceding article, if the goods are lost, destroyed
or deteriorated, common carriers are presumed to have been at fault
or to have acted negligently, unless they prove that they observed
extraordinary diligence as required in article 1733.

Article 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.

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.

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.

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.

Article 1740. If the common carrier negligently incurs in delay in

transporting the goods, a natural disaster shall not free such carrier
from responsibility.

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.

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.

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.

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.

Article 1745. Any of the following or similar stipulations shall be

considered unreasonable, unjust and contrary to public policy:

(1) That the goods are transported at the risk of the owner or
shipper;

(2) That the common carrier will not be liable for any 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 1746. An agreement limiting the common carrier's liability

may be annulled by the shipper or owner if the common carrier
refused to carry the goods unless the former agreed to such
stipulation.

Article 1747. If the common carrier, without just cause, delays the
transportation of the goods or changes the stipulated or usual
route, the contract limiting the common carrier's liability cannot be
availed of in case of the loss, destruction, or deterioration of the
goods.

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.

Article 1751. The fact that the common carrier has no competitor
along the line or route, or a part thereof, to which the contract refers
shall be taken into consideration on the question of whether or not
a stipulation limiting the common carrier's liability is reasonable,
just and in consonance with public policy.

Article 1752. Even when there is an agreement limiting the liability

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

Article 1753. The law of the country to which the goods are to be
transported shall govern the liability of the common carrier for their
loss, destruction or deterioration.

Article 1754. The provisions of articles 1733 to 1753 shall apply to

the passenger's baggage which is not in his personal custody or in
that of his employee. As to other baggage, the rules in articles 1998
and 2000 to 2003 concerning the responsibility of hotel-keepers
shall be applicable.

SUBSECTION 3. Safety of Passengers

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.

Article 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.

Article 1757. The responsibility of a common carrier for the safety

of passengers as required in articles 1733 and 1755 cannot be
dispensed with or lessened by stipulation, by the posting of notices,
by statements on tickets, or otherwise.

Article 1758. When a passenger is carried gratuitously, a

stipulation limiting the common carrier's liability for negligence is
valid, but not for wilful acts or gross negligence.

The reduction of fare does not justify any limitation of the common
carrier's liability.

Article 1759. Common carriers are liable for the death of or

injuries to passengers through the negligence or wilful acts of the
former's employees, although such employees may have acted
beyond the scope of their authority or in violation of the orders of
the common carriers.

This liability of the common carriers does not cease upon proof that
they exercised all the diligence of a good father of a family in the
selection and supervision of their employees.

Article 1760. The common carrier's responsibility prescribed in the

preceding article cannot be eliminated or limited by stipulation, by
the posting of notices, by statements on the tickets or otherwise.

Article 1761. The passenger must observe the diligence of a good

father of a family to avoid injury to himself.

Article 1762. The contributory negligence of the passenger does

not bar recovery of damages for his death or injuries, if the
proximate cause thereof is the negligence of the common carrier,
but the amount of damages shall be equitably reduced.

Article 1763. A common carrier is responsible for injuries suffered

by a passenger on account of the wilful acts or negligence of other
passengers or of strangers, if the common carrier's employees
through the exercise of the diligence of a good father of a family
could have prevented or stopped the act or omission.
 I. COMMON CARRIERS

Requisites for an entity to be classified as a common carrier

(1996, 1997, 2000, 2002 BAR)

1. Must be a Person, corporation, firm, or association;

2. Engaged in the Business of carrying or transporting
passengers or goods or both;
3. The carriage or transport must either be by Land,
Water or Air;
4. The service is for a Fee; and
5. The service is offered to the Public. (Art. 1732, NCC)

NOTE: A pipeline operator who carries oil and other petroleum

products through pipes or pipelines is a common carrier. The law
does not distinguish as to the means by which transportation is
carried out, as long as it is by land, water, or air. Neither does the
law require that transportation be through a motor vehicle. (First
Phil. Industrial Corp. v. CA, G.R. No. 125948, 29 Dec. 1998)

Q: The Pereñas were engaged in the business of transporting

students from their respective residences in Parañaque City to
Don Bosco in Pasong Tamo, Makati City and back. They
employed Alfaro as driver of the van. The Zarates contracted
the Pereñas to transport their son, Aaron, to and from Don
Bosco. However, a train hit the rear end of the van driven by
Alfaro, and the impact threw nine (9) students in the rear,
including Aaron, out of the van. Aaron landed on the path of
the train, which dragged his body and severed his head,
instantaneously killing him.

The Zarates commenced an action for damages against Alfaro,

the Pereñas, PNR, and Alano. The Zarates’ claim against the
Pereñas was based on breach of the contract of carriage and
based on quasi-delict under Art. 2176 of the Civil Code against
PNR.

The Pereñas argued that they exercised the diligence of a good

father of a family in the selection and supervision of Alfaro by
making sure that Alfaro had been issued a driver’s license and
had not been involved in any vehicular accident prior to the
collision. Is the operation of a school bus service considered as
a private carrier?

A: NO. The Pereñas, as the operators of a school bus service, were:

1. Engaged in transporting passengers generally as a
business, not just as a casual occupation;
2. Undertaking to carry passengers over established
roads by the method by which the business was
conducted; and
3. Transporting students for a fee.

Despite catering to a limited clientèle, the Pereñas 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. (Sps. Pereña v. Sps. Zarate, G.R. No. 157917, 29 Aug. 2012)

Test for determining whether one is a common carrier (1996

BAR)

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. 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. (Sps. Pereña v. Sps.
Zarate, supra)

The concept of common carriers contemplated under Art. 1732 of

the NCC and the fact that the said concept corresponds to the
concept of “public service” under the Public Service Act results in
the application of the following rules or principles:

1. Art. 1732 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.
(De Guzman v. CA, G.R. No. L-47822, 22 Dec. 1988)

2. Art. 1732 also carefully avoids making 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.
(Ibid.)

3. Art. 1732 does not distinguish between a carrier offering its

services to the “general public,” and one who offers services
or solicits its business only from a narrow segment of the
general population. (Ibid.)

4. A person or entity is a common carrier and has the

obligations of the common carrier under the Civil Code even
if he did not secure a Certificate of Public Convenience. (Ibid.)

5. The Civil Code makes no distinction as to the means of

transporting, as long as it is by land, water or air. (First
Philippine Industrial Corporation v. CA, G.R. No. 125948, 29
Dec. 1998)

6. The Civil Code does not provide that the transportation

should be by motor vehicle. (Ibid.)

7. A person or entity may be a common carrier even if he has

no fixed and publicly known route, maintains no terminals,
and issues no tickets. (Asia Lighterage and Shipping, Inc. v.
CA, G.R. No. 147246, 19 Aug. 2003)

8. A person or entity need not be engaged in the business of

public transportation for the provisions of the Civil Code on
common carriers to apply to them. (Fabre, Jr. v. CA, G.R. No.
111127, 26 July 1996)

9. The carrier can also be a common carrier even if the operator

does not own the vehicle or vessel that he or she operates.
 (Cebu Salvage Corporation v. Philippine Home Assurance
Corp., G.R. No. 150403, 25 Jan. 2007; Aquino and Hernando,
2016)

Q: Alejandro Camaling is engaged in buying copra, charcoal,

firewood, and used bottles and in reselling them in Cebu City.
He uses two (2) big Isuzu trucks for the purpose; however, he
has no certificate of public convenience or franchise to do
business as a common carrier. On the return trips to Alegria,
he loads his trucks with various merchandise of other
merchants in Alegria and in the two neighboring
municipalities. He charges them freight rates much lower than
the regular rates. In one of the return trips, one cargo truck
was loaded with several boxes of sardines, owned by Pedro
Rabor. While passing the zigzag road between Carcar and Barili,
the truck was hijacked by three (3) armed men who took all the
boxes of sardines and kidnapped the driver and his helper,
releasing them only two (2) days later. Rabor sought to recover
from Alejandro the value of the sardines. The latter argued that
he is not a common carrier. If you were the judge, would you
sustain the contention of Alejandro? (1991 BAR)

A: NO. If I were the judge, I would rule that Alejandro is a common

carrier. A person who offers his services to carry passengers or
goods for a fee is a common carrier, regardless of whether he has a
certificate of public convenience or not, whether it is his main
business or is incidental to such business, whether it is scheduled
or unscheduled service, and whether he offers his services to the
general public or to a limited few. (De Guzman v. CA, G.R. No.
47822, 27 Dec. 1988)

Q: Maria shipped 3,000 bags of Australian delicacies to Pauline

in the Philippines. Such goods were insured with PH insurance.
Pauline then hired B Brokerage as its customs broker. When the
goods arrived at the Port of Manila, the same was loaded into
the barge owned by AVL Shipping’s barge, called ANYA-I. When
the barge traversed Pasig River, the goods got wet as it was
found that the barge had a hole, thereby allowing river water to
flow inside the same. This resulted to the goods being wet
which now became inedible. Pauline asserted her insurance
claim with PH Insurance, to which the latter paid. PH Insurance
now filed a claim against B Brokerage and AVL Shipping. AVL
Shipping contends that its barge, ANYA-I cannot be considered
as a common carrier. Is ANYA-I a common carrier?

A: YES. ANYA-I is a common carrier. Art. 1732 of the NCC defines

common carriers as “persons, corporations, firms, or associations
engaged in the business of carrying or transporting passengers or
goods or both, by land, water, or air, for compensation, offering their
services to the public”. Art. 1732 does not make any distinction
between one whose principal business activity is the carrying of
persons or goods or both, and one who does the carrying only as an
ancillary activity; between a person or enterprise offering
transportation service on a regular or scheduled basis, and one
offering the service on an occasional, episodic or unscheduled basis;
and 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. (C.V. Gaspar Salvage & Lighterage
Corporation v. LG Insurance Company Ltd., G.R. Nos. 206892 &
207035, 3 Feb. 2021)

Private Carrier

A private carrier is one who, without making the activity a

vocation, or without holding himself or itself out to the public
as ready to act for all who may desire his or its services,
undertakes, by special agreement in a particular instance
only, to transport goods or persons from one place to another
either gratuitously or for hire. (Sps Pereña v. Sps Zarate,
supra) A carrier which does not qualify under the requisites
of a common carrier is deemed a private carrier. (National
Steel Corporation v. CA, G.R. No. 112287, 12 Dec. 1997)

Common Carrier vs. Private Carrier

As to whom the carrier caters its services, a common

carrier undertakes to carry passengers or goods for the
public. On the other hand, in the case of a private carrier,
carriage is generally undertaken by special agreement and it
does not hold itself out ot carry goods for the general public.

As to governing laws, common carriers are governed by

Civil Code provisions on Common Carriers, Public Service
act, and other Special Laws relating to transportation. On
the other hand, private carriers are governed by the Civil
Code provisions on ordinary contracts.

As to the degree of diligence required, common carriers

are required to have extraordinary diligence while private
carriers are only required to have ordinary diligence or
diligence of a good father of a family.

As to presumption of negligence, in the case of common

carriers, if the goods are lost, destroyed or deteriorated, and
in case of death of or injuries to passengers. On the other
hand, for private carriers, no presumption as to negligence.

As to whether subject to regulation or not, a common

carrier is subject to regulation by a regulatory agency while
private carriers are not subject to regulation by a regulatory
agency.

As to exemption from liability, a common carrier cannot

stipulate that it ex exempt from liability for negligence of its
agents or employees. Such stipulation is void as it is against
public policy. A private carrier may validly enter into a
stipulation exempting it from liability.

1. National Steel Corporation vs. CA (G.R. No. 112287,

December 12, 1997)

At the outset, it is essential to establish whether VSI contracted

with NSC as a common carrier or as a private carrier. The resolution
of this preliminary question determines the law, standard of
diligence and burden of proof applicable to the present case.
Article 1732 of the Civil Code defines a common carrier as "persons,
corporations, firms or associations engaged in the business of
carrying or transporting passengers or goods or both, by land,
water, or air, for compensation, offering their services to the public."
It has been held that the true test of a common carrier is the
carriage of passengers or goods, provided it has space, for all who
opt to avail themselves of its transportation service for a fee. 11 A
carrier which does not qualify under the above test is deemed a
private carrier. "Generally, private carriage is undertaken by special
agreement and the carrier does not hold himself out to carry goods
for the general public. The most typical, although not the only form
of private carriage, is the charter party, a maritime contract by
which the charterer, a party other than the shipowner, obtains the
use and service of all or some part of a ship for a period of time or
a voyage or voyages."12

In the instant case, it is undisputed that VSI did not offer its
services to the general public. As found by the Regional Trial Court,
it carried passengers or goods only for those it chose under a
"special contract of charter party." 13 As correctly concluded by the
Court of Appeals, the MV Vlasons I "was not a common but a private
carrier."14 Consequently, the rights and obligations of VSI and NSC,
including their respective liability for damage to the cargo, are
determined primarily by stipulations in their contract of private
carriage or charter party.15 Recently, in Valenzuela Hardwood and
Industrial Supply, Inc., vs. Court of Appeals and Seven Brothers
Shipping Corporation,16 the Court ruled:

. . . in a contract of private carriage, the parties may freely

stipulate their duties and obligations which perforce would
be binding on them. Unlike in a contract involving a common
carrier, private carriage does not involve the general public.
Hence, the stringent provisions of the Civil Code on common
carriers protecting the general public cannot justifiably be
applied to a ship transporting commercial goods as a private
carrier. Consequently, the public policy embodied therein is
not contravened by stipulations in a charter party that lessen
or remove the protection given by law in contracts involving
common carriers.

Diligence Required

The diligence required of common carriers is extraordinary

diligence. (Art. 1733, NCC)

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. The law requires common carriers to
render service with the greatest skill and utmost foresight.
(Loadmasters Services v. Glodel Brokerage, G.R. 179446, 10
Jan. 2011)

Reasons for the requirement of extraordinary diligence:

1. Because of the nature of the business of common carrier

which is public service; and
2. For public policy consideration - the common carriers are
supposed to serve the public interest and therefore, they
have to exercise extraordinary diligence. (Martin, 1989)

Q: Are common carriers liable for injuries to passengers even if

they have observed ordinary diligence and care? Explain. (2015
BAR)

A: YES, common carriers are liable to injuries to passengers even if

the carriers observed ordinary diligence and care because the
obligation imposed upon them by law is to exercise extraordinary
diligence. Common carriers are 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.

Exercise of extraordinary diligence in the carriage of goods and

transport of passengers

As to Commencement:

Carriage of Goods: Commences from the time the

goods are unconditionally placed in the possession of
and received by the carrier for transportation.

Transport of Passengers: Commences from the

moment the person who purchases the ticket from the
carrier presents himself at the proper place and in a
proper manner to be transported.

As to Duration:

Carriage of Goods; GR: Continues until the goods are

delivered, actually or constructively, by the carrier to
the consignee or to the person who has a right to
receive them, and even when they are temporarily
unloaded or stored in transit; XPN: The shipper or
owner had made use of the right or stoppage in
transit.

Continues even during the time the goods are stored

in a warehouse of the carrier at the place of
destination until the consignee has been advised of
the arrival of the goods and has been given a
reasonable opportunity thereafter to remove them or
otherwise dispose of them.

Transport of Passengers: Continues until the

passenger has been landed at the port of destination
and has left the vessel owner’s dock or premises.

The requirement to observe extraordinary diligence begins

with the actual delivery of the goods for transportation, and
not merely with the formal execution of a receipt or bill of
lading; the issuance of a bill of lading is not necessary to
complete delivery and acceptance by the carrier. (Compañia
Maritima v. Insurance Co. of North America, G.R. No. L-18965,
30 Oct. 1964)
Q: In cases where the cargoes are damaged when it is being
unloaded from the vessel, is the vessel owner relieved of its
responsibility to observe extraordinary diligence from the
moment the cargoes were delivered to the arrastre operator?

A: NO. Under the Civil Code, other pertinent laws and

jurisprudence, the extraordinary responsibility of common carriers
lasts until the time the goods are actually or constructively delivered
by the carrier to the consignee or the person who has the right to
receive. There is actual delivery in contracts for the transport of
goods when possession has been turned over to the consignee or to
his duly authorized agent and a reasonable time is given him to
remove the goods. In this case, since the discharging of the
containers had not yet been completed at the time the damage
occurred, there was still no delivery, actual or constructive, of the
cargoes. (Westwind Shipping Corp v. UCPB General Insurance Co.,
G.R. No. 200289, 25 Nov. 2013)

Q: X, while driving his Toyota Altis, tried to cross the railway

tract of PNR along Blumentritt Avenida Ext., Manila. The train,
as it approached Blumentritt Avenida Ext., applied its horn as
a warning to all the vehicles that might be crossing the railway
tract, but there was really nobody manning the crossing. X was
listening to his lpod Touch, hence, he did not hear the sound
of the horn of the train and so his car was hit by the train. As
a result of the accident, X suffered some injuries and his car
was totally destroyed as a result of the impact. Is PNR liable?
(2012 BAR)

A: NO. PNR is not liable because X should have known that he was
crossing a place designated as crossing for train, and therefore
should have been more careful.

Presumption of negligence in the carriage of goods (1997, 2001,

2008 BAR)

GR: There is a presumption of negligence if the goods are lost,

destroyed, or deteriorated.

XPNs: (Di-Ca-W-A-C-O-A-ED)

1. Natural Disaster or Calamity which is the proximate

cause of the loss (flood, storm, earthquake, lightning);
2. Acts of public enemy in War, whether international or
civil;
3. Act or omission of the shipper or the owner of the goods;
4. Character of the goods or defects in the packing or
container;
5. Order or Act of competent public authority (Art. 1734,
NCC); or
6. Exercise of Extraordinary Diligence. (Art. 1735, NCC)

Presumption of Negligence in the transportation of passengers

(1990, 1994 BAR)

In case of death of or injuries to passengers, common carriers are

presumed to have been at fault or to have acted negligently. (Art.
1756, NCC) However, such presumption may be refuted by proving
observance of extraordinary diligence as prescribed by Art. 1733 of
the NCC.

Q: Is it important that the plaintiff still prove that the subject

shipment suffered actual shortage before the burden is shifted
to the defendant common carrier to prove that it exercised
extraordinary diligence?

A: YES. Though it is true that common carriers are presumed to

have been at fault or to have acted negligently if the goods
transported by them are lost, destroyed, or deteriorated, and that
the common carrier must prove that it exercised extraordinary
diligence in order to overcome the presumption, the plaintiff must
still, before the burden is shifted to the defendant, prove that the
subject shipment suffered actual shortage. This can only be done if
the weight of the shipment at the port of origin and its subsequent
weight at the port of arrival have been proven by a preponderance
of evidence, and it can be seen that the former weight is
considerably greater than the latter weight, taking into
consideration the exceptions provided in Article 1734 of the Civil
Code. (Asian Terminals, Inc. v. Simon Enterprises, Inc., G.R. No.
177116, 27 Feb. 2013)

Q: Peter hailed a taxicab owned and operated by Jimmy Cheng

and driven by Hermie Cortez. On the way to Malate, the taxicab
collided with a passenger jeepney, as a result of which Peter’s
left leg was fractured. Peter sued Jimmy for damages, based on
contract of carriage, and Peter won. Jimmy wanted to challenge
the decision before the SC on the ground that the trial court
erred in not making an express finding as to whether or not
Jimmy was responsible for the collision and, hence, civilly
liable to Peter. He went to see you for advice. What will you tell
him? Explain. (1990 BAR)

A: I will advise Jimmy to desist from challenging the decision. The

action of Peter being based on culpa contractual, the carrier’s
negligence is presumed upon the breach of contract. The burden of
proof instead would lie on Jimmy to establish that despite an
exercise of utmost diligence, the collision could not have been
avoided.

Q: In a court case involving claims for damages arising from

death and injury of bus passengers, counsel for the bus operator
filed a demurrer to evidence arguing that the complaint should
be dismissed because the plaintiffs did not submit any evidence
that the operator or its employees were negligent. If you were
the judge, would you dismiss the complaint? (1997 BAR)

A: NO. In the carriage of passengers, the failure of the common

carrier to bring the passengers safely to their destination
immediately raises the presumption that such failure is attributable
to the carrier’s fault or negligence, the plaintiff need not adduce
proof of specific acts of negligence committed by the carrier. It is for
the carrier to rebut such presumption.
Presumption of Negligence

The court need not make an express finding of fault or

negligence of common carriers, the law imposes liability
upon common carriers, as long as it shown that:

1. There exists a Contract between the passenger or

the shipper and the common carrier; and
2. That the Loss, Deterioration, Injury or Death took
place during the existence of the contract. (Air
France v. Gillego, G.R. No. 165266, 15 Dec. 2010)

Q: SEACOL, a foreign company, received shipment of musical

instruments from Melbourne, Australia for delivery at the port
of Manila. Upon arriving in Manila, the shipment was received
by Unitrans Inc., which delivered the same to the consignee,
where it was found that said instruments were damaged and
could no longer be used. After paying the consignee, ICNA filed
a complaint to recover from the marine insurance coverage on
the imported instruments against SEACOL doing business in
the Philippines through its local ship agent Unitrans Inc.
Unitrans Inc. denied liability alleging that it is not a ship agent
of SEACOL but was only engaged by the consignee as customs
broker for the subject shipment with the limited obligation to
pay fees in the BOC and to transport and deliver the said
shipment to the consignee’s premises in good condition.

Is Unitrans Inc.’s contention tenable?

A: NO. Emphasis must be placed on the fact that Unitrans itself

admitted that in handling the subject shipment and making sure
that it was delivered to the consignee’s premises in good condition
as the delivery/forwarding agent, Unitrans was acting as a freight
forwarding entity and an accredited non- vessel operating common
carrier.

Jurisprudence holds that a common carrier is presumed to have

been negligent if it fails to prove that it exercised extraordinary
vigilance over the goods it transported. When the goods shipped are
either lost or arrived in damaged condition, a presumption arises
against the carrier of its failure to observe that diligence, and there
need not be an express finding of negligence to hold it liable. To
overcome the presumption of negligence, the common carrier must
establish by adequate proof that it exercised extraordinary diligence
over the goods. It must do more than merely show that some other
party could be responsible for the damage. (Unitrans International
Forwarders, Inc. v. Insurance Company of North America, G.R. No.
203865, 13 Mar. 2019)

Effect of Acquittal

The acquittal of the employee of the common carrier in the

criminal case is immaterial to the case for breach of contract.
(Heirs of Marcial K. Ochoa v. G&S Transport Corp., G.R. Nos.
170071 and 170125, 09 Mar. 2011)

Q: Vivian Martin was booked by PAL, which acted as ticketing

agent of Far East Airlines, for a round trip flight on the latter’s
aircraft, from Manila–Hong Kong-Manila. The ticket was cut by
an employee of PAL. The ticket showed that Vivian was
scheduled to leave Manila at 5:30p.m. Vivian arrived at NAIA
an hour before the time scheduled in her ticket, but was told
her flight had left at 12:10 p.m. It turned out that the ticket
was inadvertently cut and wrongly worded. PAL employees
nevertheless scheduled her to fly two hours later aboard their
plane. She agreed and arrived in Hong Kong safely. The aircraft
used by Far East Airlines had an engine trouble, and did not
make it to HK but returned to Manila. Vivian sued both PAL
and Far East. Could either or both airlines be held liable to
Vivian? Why? (2003 BAR)

A: Only Far East Airline is liable. The instant petition was based
on breach of contract of carriage; therefore, Vivian can only sue Far
East Airlines alone, and not PAL, since the latter was not a party to
the contract. However, this is not to say that PAL is relieved from
any liability due to any of its negligent acts. In China Air Lines, Ltd.
v. CA, while not exactly in point, however, illustrates the principle
which governs this particular situation.

In that case, the carrier (PAL), acting as an agent of another carrier,

was also liable for its own negligent acts or omission in the
performance of its duties. Far East Airlines may also file a third-
party complaint against PAL for the purpose of determining who
was primarily at fault between them. It is but logical, fair, and
equitable to allow Far East Airlines to sue PAL for indemnification,
if it is proven that the latter’s negligence was the proximate cause
of Vivian’s unfortunate experience, instead of totally absolving PAL
from any liability. (British Airways v. CA, G.R. No. 121824, 29 Jan.
1998)

Diligence Required; Sea

1. Trans-Asia Shipping vs. CA (G.R. No. 118126, March 04,

1996)

Undoubtedly, there was, between the petitioner and the private

respondent, a contract of common carriage. The laws of primary
application then are the provisions on common carriers under
Section 4, Chapter 3, Title VIII, Book IV of the Civil Code, while for
all other matters not regulated thereby, the Code of Commerce and
special laws.20

Under Article 1733 of the Civil Code, the petitioner was bound to
observe extraordinary diligence in ensuring the safety of the private
respondent. That meant that the petitioner was, pursuant to Article
1755 of the said Code, bound to carry the private respondent safely
as far as human care and foresight could provide, using the utmost
diligence of very cautious persons, with due regard for all the
circumstances. In this case, we are in full accord with the Court of
Appeals that the petitioner failed to discharge this obligation.

Before commencing the contracted voyage, the petitioner undertook

some repairs on the cylinder head of one of the vessel's engines. But
even before it could finish these repairs, it allowed the vessel to leave
the port of origin on only one functioning engine, instead of two.
Moreover, even the lone functioning engine was not in perfect
condition as sometime after it had run its course, it conked out.
This caused the vessel to stop and remain a drift at sea, thus in
order to prevent the ship from capsizing, it had to drop anchor.
Plainly, the vessel was unseaworthy even before the voyage began.
For a vessel to be seaworthy, it must be adequately equipped for the
voyage and manned with a sufficient number of competent officers
and crew. 21 The failure of a common carrier to maintain in
seaworthy condition its vessel involved in a contract of carriage is a
clear breach of its duty prescribed in Article 1755 of the Civil Code.

2. Negros Navigation vs. CA (G.R. No. 110398, November 07,

1997)

In finding petitioner guilty of negligence and in failing to exercise

the extraordinary diligence required of it in the carriage of
passengers, both the trial court and the appellate court relied on
the findings of this Court in Mecenas v. Intermediate Appellate
Court,4 which case was brought for the death of other passengers.
In that case it was found that although the proximate cause of the
mishap was the negligence of the crew of the M/T Tacloban City,
the crew of the Don Juan was equally negligent as it found that the
latter's master, Capt. Rogelio Santisteban, was playing mahjong at
the time of collision, and the officer on watch, Senior Third Mate
Rogelio De Vera, admitted that he failed to call the attention of
Santisteban to the imminent danger facing them. This Court found
that Capt. Santisteban and the crew of the M/V Don Juan failed to
take steps to prevent the collision or at least delay the sinking of
the ship and supervise the abandoning of the ship.

Petitioner Negros Navigation was found equally negligent in

tolerating the playing of mahjong by the ship captain and other crew
members while on board the ship and failing to keep the M/V Don
Juan seaworthy so much so that the ship sank within 10 to 15
minutes of its impact with the M/T Tacloban City.

In addition, the Court found that the Don Juan was overloaded. The
Certificate of Inspection, dated August 27, 1979, issued by the
Philippine Coast Guard Commander at Iloilo City stated that the
total number of persons allowed on the ship was 864, of whom 810
are passengers, but there were actually 1,004 on board the vessel
when it sank, 140 persons more than the maximum number that
could be safely carried by it.

Taking these circumstances together, and the fact that the M/V Don
Juan, as the faster and better-equipped vessel, could have avoided
a collision with the PNOC tanker, this Court held that even if
the Tacloban City had been at fault for failing to observe an
internationally-recognized rule of navigation, the Don Juan was
guilty of contributory negligence. Through Justice Feliciano, this
Court held:

The grossness of the negligence of the "Don Juan" is

underscored when one considers the foregoing
circumstances in the context of the following facts: Firstly,
the "Don Juan" was more than twice as fast as the "Tacloban
City." The "Don Juan's" top speed was 17 knots; while that
of the "Tacloban City" was 6.3. knots. Secondly, the "Don
Juan" carried the full complement of officers and crew
members specified for a passenger vessel of her class.
Thirdly, the "Don Juan" was equipped with radar which was
functioning that night. Fourthly, the "Don Juan's officer on-
watch had sighted the "Tacloban City" on his radar screen
while the latter was still four (4) nautical miles away. Visual
confirmation of radar contact was established by the "Don
Juan" while the "Tacloban City" was still 2.7 miles away. In
the total set of circumstances which existed in the instant
case, the "Don Juan," had it taken seriously its duty of
extraordinary diligence, could have easily avoided the
collision with the "Tacloban City." Indeed, the "Don Juan"
might well have avoided the collision even if it had
exercised ordinary diligence merely.

It is true that the "Tacloban City" failed to follow Rule 18 of

the International Rules of the Road which requires two (2)
power-driven vessels meeting end on or nearly end on each
to alter her course to starboard (right) so that each vessel
may pass on the port side (left) of the other. The "Tacloban
City," when the two (2) vessels were only three-tenths (0.3) of
a mile apart, turned (for the second time) 15° to port side
while the "Don Juan" veered hard to starboard. . . . [But]
"route observance" of the International Rules of the Road will
not relieve a vessel from responsibility if the collision could
have been avoided by proper care and skill on her part or
even by a departure from the rules.

In the petition at bar, the "Don Juan" having sighted the

"Tacloban City" when it was still a long way off was negligent
in failing to take early preventive action and in allowing the
two (2) vessels to come to such close quarters as to render
the collision inevitable when there was no necessity for
passing so near to the "Tacloban City" as to create that
hazard or inevitability, for the "Don Juan" could choose its
own distance. It is noteworthy that the "Tacloban City," upon
turning hard to port shortly before the moment of collision,
signalled its intention to do so by giving two (2) short blasts
with its horn. The "Don Juan" gave no answering horn blast
to signal its own intention and proceeded to turn hard to
starboard.

We conclude that Capt. Santisteban and Negros Navigation

are properly held liable for gross negligence in connection
with the collision of the "Don Juan" and "Tacloban City" and
the sinking of the "Don Juan" leading to the death of
hundreds of passengers. . . .5

Commencement of Liability; Goods

1. Compania Maritima vs. Insurance Co. of North America

(G.R. No. L-18965, Oct. 30, 1964)

The test as to whether the relation of shipper and carrier had been
established is: Had the control and possession of the goods been
completely surrendered by the shipper to the carrier? As such,
the carrier’s liability as a common carrier begins with the actual
delivery of the goods for transportation and not with the mere formal
execution of a receipt or bill of lading because the issuance of such is
not necessary to complete delivery and acceptance. Even where it is
provided by statute that liability commences with the issuance of the
bill of lading, actual delivery and acceptance are sufficient to bind the
carrier.

In the case at bar, the fact that the carrier sent its lighters free of
charge to take the hemp from Macleod's wharf preparatory to its
loading onto Bowline Knot does not in any way impair the contract of
carriage already entered into between the carrier and the shipper
because that preparatory step is but part and parcel of said contract
of carriage. In fact, the consummation of the said contract has
already begun: Macleod delivering the cargo to the carrier and the
latter taking possession thereof by placing it on a lighter manned by
its authorized employees.

FACTS: Macleod and Company of the Philippines contracted by

telephone the services of the Compañia Maritima for the shipment
of 2,645 bales of hemp from the former's private pier at Davao City
to Manila and for their subsequent transhipment to Boston,
Massachusetts, U.S.A. on board the S.S. Steel Navigator. After the
oral contract was confirmed by a formal and written booking,
Compañia Maritima sent LCT Nos. 1023 and 1025. Carrier’s
receipts where the issued upon loading of the hemp.

The two loaded barges subsequently left Macleod's wharf and waited
in the marginal wharf for the arrival of S.S. Bowline Knot on which
the hemp was to be loaded. During the night, however, LCT No.
1025 sank resulting in the damage or loss of 1,162 bales of hemp
loaded therein. Macleod also incurred expenses for the checking,
grading, rebating, washing, cleaning and redrying of any
salvaged hemp.

Macleod filed a claim for the loss it suffered against Insurance

Company of North America. After the latter paid the former, it filed
a claim against Compañia Maritima. Having failed to recover from
the carrier, the insurance company instituted the present action.

ISSUE: A. Whether there was a contract of carriage between the

carrier and the shipper even if the loss occurred when the hemp
was loaded on a barge owned by the carrier, free of charge and no
bill of lading was issued therefore. (YES)

B. Whether the insurance company can sue the carrier as assignee

of Macleod in spite of the fact that the liability of the carrier as
insurer is not recognized in this jurisdiction. (YES)

RULING: (A) The test as to whether the relation of shipper and

carrier had been established is: Had the control and possession of
the goods been completely surrendered by the shipper to the
carrier? Whenever the control and possession of goods passes to the
carrier and nothing remains to be done by the shipper, it can be
said with certainty that the relation of shipper and carrier has been
established. As such, the carrier’s liability as a common carrier
begins with the actual delivery of the goods for transportation and
not with the mere formal execution of a receipt or bill of lading
because the issuance of such is not necessary to complete delivery
and acceptance. Even where it is provided by statute that liability
commences with the issuance of the bill of lading, actual delivery
and acceptance are sufficient to bind the carrier.

In the case at bar, the fact that the carrier sent its lighters free of
charge to take the hemp from Macleod's wharf preparatory to its
loading onto Bowline Knot does not in any way impair the contract
of carriage already entered into between the carrier and the
shipper because that preparatory step is but part and parcel of
said contract of carriage. In fact, the consummation of the said
contract has already begun: Macleod delivering the cargo to the
carrier and the latter taking possession thereof by placing it on a
lighter manned by its authorized employees.

(B) The insurance company can recover the amount it paid to

Macleod under the insurance contract since the cargo that was
damaged was insured and the former paid the amount represented
by the loss to the latter. It is but fair that it be given the right to
recover from the party responsible for the loss.

The instant case is not one between the insured and the insurer but
one between the shipper and the carrier because the insurance
company merely stepped into the shoes of the shipper. Since the
shipper has a direct cause of action against the carrier, no valid
reason is seen why such action cannot be asserted or availed of by
the insurance company as a subrogee of the shipper. In any case,
the carrier set up as a defense any defect in the insurance policy
not only because it is not a privy to it but also because it cannot
avoid its liability to the shipper under the contract of carriage which
binds it to pay any loss that may be caused to the cargo involved
therein.

Commencement of Liability; Passengers

1. Aboitiz Shipping Corp. vs. CA (G.R. No. 84458, Nov. 6,

1989)

It is of common knowledge that, by the very nature of the business

of a shipper, the passengers of vessels are allotted a longer period
of time to disembark from the ship than the passengers of other
common carriers considering the bulk of cargoes and the
number of passengers it can load. Consequently, such passenger
will need at least an hour to disembark from the vessel and claim
his baggage.

In the case at bar, when the accident occurred, the victim was in
the act of unloading his cargoes which he had every right to do. As
such, even if he had already disembarked an hour earlier, his
presence in the carrier’s premises was not without cause. The victim
had to claim his baggage which was possible only 1 hour after the
vessel arrived. It was admitted that it is Aboitiz’s standard
procedure that the unloading operations shall start only at such
time. Consequently, Anacleto is still deemed a passenger of said
carrier at the time of his tragic death. It must further be noted that
a carrier is duty bound not only to bring its passengers safely to
their destination but also to afford them a reasonable time to claim
their baggage.
Excepting Cases

1. Southern Lines In., vs. CA (G.R. No. L-11629, Jan. 31,

1962)

Sometime in 1948, the City of Iloilo requisitioned for rice from the
National Rice and Corn Corporation (hereafter referred to as NARIC)
in Manila. On August 24 of the same year, NARIC, pursuant to the
order, shipped 1,726 sacks of rice consigned to the City of Iloilo on
board the SS "General Wright" belonging to the Southern Lines, Inc.
Each sack of rice weighed 75 kilos and the entire shipment as
indicated in the bill of lading had a total weight of 129,450 kilos.

On September 3, 1948, the City of Iloilo received the shipment and

paid the amount of P63,115.50. However, it was noted that the foot
of the bill of lading that the City of Iloilo 'Received the above
mentioned merchandise apparently in same condition as when
shipped, save as noted below: actually received 1685 sacks with a
gross weight of 116,131 kilos upon actual weighing. Total shortage
ascertained 13,319 kilos." The shortage was equivalent to 41 sacks
of rice with a net weight of 13,319 kilos, the proportionate value of
which was P6,486.35.

On February 14, 1951 the City of Iloilo filed a complaint in the Court
of First Instance of Iloilo against NARIC and the Southern Lines,
Inc. for the recovery of the amount of P6,486.35 representing the
value of the shortage of the shipment of rice. After trial, the lower
court absolved NARIC from the complaint, but sentenced the
Southern Lines, Inc. to pay the amount of P4,931.41 which is the
difference between the sum of P6,486.35 and P1,554.94
representing the latter's counterclaim for handling and freight.

The Southern Lines, Inc. appealed to the Court of Appeals which

affirmed the judgment of the trial court. Hence, this petition for
review.

The only question to be determined in this petition is whether or

not the defendant-carrier, the herein petitioner, is liable for the loss
or shortage of the rice shipped.

Article 361 of the Code of Commerce provides: .

ART. 361. — The merchandise shall be transported at the

risk and venture of the shipper, if the contrary has not been
expressly stipulated.

As a consequence, all the losses and deteriorations which the

goods may suffer during the transportation by reason of
fortuitous event, force majeure, or the inherent nature and
defect of the goods, shall be for the account and risk of the
shipper.1äwphï1.ñët

Proof of these accidents is incumbent upon the carrier.

Article 362 of the same Code provides: .

ART. 362. — Nevertheless, the carrier shall be liable for the

losses and damages resulting from the causes mentioned in
the preceding article if it is proved, as against him, that they
arose through his negligence or by reason of his having failed
to take the precautions which usage his establisbed among
careful persons, unless the shipper has committed fraud in
the bill of lading, representing the goods to be of a kind or
quality different from what they really were.

If, notwithstanding the precautions referred to in this article,

the goods transported run the risk of being lost, on account
of their nature or by reason of unavoidable accident, there
being no time for their owners to dispose of them, the carrier
may proceed to sell them, placing them for this purpose at
the disposal of the judicial authority or of the officials
designated by special provisions.

Under the provisions of Article 361, the defendant-carrier in order

to free itself from liability, was only obliged to prove that the
damages suffered by the goods were "by virtue of the nature or
defect of the articles." Under the provisions of Article 362, the
plaintiff, in order to hold the defendant liable, was obliged to prove
that the damages to the goods by virtue of their nature, occurred
on account of its negligence or because the defendant did not take
the precaution adopted by careful persons. (Government v.
Ynchausti & Co., 40 Phil. 219, 223).

Petitioner claims exemption from liability by contending that the

shortage in the shipment of rice was due to such factors as the
shrinkage, leakage or spillage of the rice on account of the bad
condition of the sacks at the time it received the same and the
negligence of the agents of respondent City of Iloilo in receiving the
shipment. The contention is untenable, for, if the fact of improper
packing is known to the carrier or his servants, or apparent upon
ordinary observation, but it accepts the goods notwithstanding
such condition, it is not relieved of liability for loss or injury
resulting thereform. (9 Am Jur. 869.) Furthermore, according to the
Court of Appeals, "appellant (petitioner) itself frankly admitted that
the strings that tied the bags of rice were broken; some bags were
with holes and plenty of rice were spilled inside the hull of the boat,
and that the personnel of the boat collected no less than 26 sacks
of rice which they had distributed among themselves." This finding,
which is binding upon this Court, shows that the shortage resulted
from the negligence of petitioner.

Invoking the provisions of Article 366 of the Code of Commerce and

those of the bill of lading, petitioner further contends that
respondent is precluded from filing an action for damages on
account of its failure to present a claim within 24 hours from receipt
of the shipment. It also cites the cases of Government v. Ynchausti
& Co., 24 Phil. 315 and Triton Insurance Co. v. Jose, 33 Phil. 194,
ruling to the effect that the requirement that the claim for damages
must be made within 24 hours from delivery is a condition
precedent to the accrual of the right of action to recover damages.
These two cases above-cited are not applicable to the case at bar.
In the first cited case, the plaintiff never presented any claim at all
before filing the action. In the second case, there was payment of
the transportation charges which precludes the presentation of any
claim against the carrier. (See Article 366, Code of Commerce.) It is
significant to note that in the American case of Hoye v.
Pennsylvania Railroad Co., 13 Ann. Case. 414, it has been said: .

... "It has been held that a stipulation in the contract of

shipment requiring the owner of the goods to present a notice
of his claim to the carrier within a specified time after the
goods have arrived at their destination is in the nature of a
condition precedent to the owner's right to enforce a
recovery, that he must show in the first instance that be has
complied with the condition, or that the circumstances were
such that to have complied with it would have required him
to do an unreasonable thing. The weight of authority,
however, sustains the view that such a stipulation is more in
the nature of a limitation upon the owner's right to recovery,
and that the burden of proof is accordingly on the carrier to
show that the limitation was reasonable and in proper form
or within the time stated." (Hutchinson on Carrier, 3d ed.,
par. 44) Emphasis supplied.

2. Ganzon vs. CA (G.R. No. L-48757, May 30, 1988)

The shipper will suffer the losses and deterioration arising from the
causes enumerated in Art. 1734; and in these instances, the burden
of proving that damages were caused by the fault or negligence of
the carrier rests upon him. However, the carrier must first establish
that the loss or deterioration was occasioned by one of the excepted
causes or was due to an unforeseen event or to force majeure.

FACTS: On November 28, 1956, Gelacio Tumambing contracted the

services of Mauro B. Ganzon to haul 305 tons of scrap iron from
Mariveles, Bataan, to the port of Manila on board the lighter LCT
"Batman". Pursuant to that agreement, Mauro B. Ganzon sent his
lighter "Batman" to Mariveles where it docked in three feet of water.
On December 1, 1956, Gelacio Tumambing delivered the scrap iron
to defendant Filomeno Niza, captain of the lighter, for loading which
was actually begun on the same date by the crew of the lighter
under the captain's supervision. When about half of the scrap iron
was already loaded, Mayor Jose Advincula of Mariveles, Bataan,
arrived and demanded P5,000.00 from Gelacio Tumambing. The
latter resisted the shakedown and after a heated argument between
them, Mayor Jose Advincula drew his gun and fired at Gelacio
Tumambing. The gunshot was not fatal but Tumambing had to be
taken to a hospital in Balanga, Bataan, for treatment.

After sometime, the loading of the scrap iron was resumed. But on
December 4, 1956, Acting Mayor Basilio Rub, accompanied by three
policemen, ordered captain Filomeno Niza and his crew to dump the
scrap iron where the lighter was docked. The rest was brought to
the compound of NASSCO. Later on Acting Mayor Rub issued a
receipt stating that the Municipality of Mariveles had taken custody
of the scrap iron.

Tumambing instituted in the Court of First Instance of Manila an

action against Ganzon for damages based on culpa contractual.

ISSUE: A. Whether the petitioner is guilty of breach of cthe

contract. (YES)

B. Whether the loss of the scraps which was due mainly to the
intervention of the municipal officials of Mariveles constitutes a
caso fortuito as defined in Art. 1174 of the Civil Code. (NO)

RULING: A. By the said act of delivery, the scraps were

unconditionally placed in the possession and control of the common
carrier, and upon their receipt by the carrier for transportation, the
contract of carriage was deemed perfected. Consequently, the
petitioner-carrier's extraordinary responsibility for the loss,
destruction or deterioration of the goods commenced. Pursuant to
Art. 1736, such extraordinary responsibility would cease only upon
the delivery, actual or constructive, by the carrier to the consignee,
or to the person who has a right to receive them. The fact that part
of the shipment had not been loaded on board the lighter did
not impair the said contract of transportation as the goods
remained in the custody and control of the carrier, albeit still
unloaded.

The petitioner has failed to show that the loss of the scraps was due
to any of the following causes enumerated in Article 1734 of the
Civil Code, namely: (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.

Hence, the petitioner is presumed to have been at fault or to have

acted negligently. Still, the petitioner could have been exempted
from any liability had he been able to prove that he observed
extraordinary diligence in the vigilance over the goods in his
custody, according to all the circumstances of the case, or that
the loss was due to an unforeseen event or to force majeure.

B. In any case, the intervention of the municipal officials was not In

any case, of a character that would render impossible the fulfillment
by the carrier of its obligation. The petitioner was not duty bound
to obey the illegal order to dump into the sea the scrap iron.
Moreover, there is absence of sufficient proof that the issuance of
the same order was attended with such force or intimidation as to
completely overpower the will of the petitioner's employees. The
mere difficulty in the fullfilment of the obligation is not considered
force majeure. We agree with the private respondent that the scraps
could have been properly unloaded at the shore or at the NASSCO
compound, so that after the dispute with the local officials
concerned was settled, the scraps could then be delivered in
accordance with the contract of carriage.

3. Sweet Lines, inc. vs. CA (G.R. No. L-46340, Apr. 29, 1983)

The governing provisions are found in the Code of Commerce and

read as follows:

ART. 614. A captain who, having agreed to make a

voyage, fails to fulfill his undertaking, without being
prevented by fortuitous event or force majeure, shall
indemnify all the losses which his failure may cause,
 without prejudice to criminal penalties which may be
proper.

and

ART. 698. In case of interruption of a voyage already

begun, the passengers shall only be obliged to pay the
fare in proportion to the distance covered, without
right to recover damages if the interruption is due to
fortuitous event or force majeure, but with a right to
indemnity, if the interruption should have been
caused by the captain exclusively. If the interruption
should be caused by the disability of the vessel, and
the passenger should agree to wait for her repairs, he
may not be required to pay any increased fare of
passage, but his living expenses during the delay shall
be for his own account.

The crucial factor then is the existence of a fortuitous event or force

majeure. Without it, the right to damages and indemnity exists
against a captain who fails to fulfill his undertaking or where the
interruption has been caused by the captain exclusively.

As found by both Courts below, there was no fortuitous event

or force majeure which prevented the vessel from fulfilling its
undertaking of taking private respondents to Catbalogan. In the
first place, mechanical defects in the carrier are not considered
a caso fortuito that exempts the carrier from responsibility. 1

In the second place, even granting arguendo that the engine failure
was a fortuitous event, it accounted only for the delay in departure.
When the vessel finally left the port of Cebu on July 10, 1972, there
was no longer any force majeure that justified by-passing a port of
call. The vessel was completely repaired the following day after it
was towed back to Cebu. In fact, after docking at Tacloban City, it
left the next day for Manila to complete its voyage. 2

The reason for by-passing the port of Catbalogan, as admitted by

petitioner's General Manager, was to enable the vessel to catch up
with its schedule for the next week. The record also discloses that
there were 50 passengers for Tacloban compared to 20 passengers
for Catbalogan,3 so that the Catbalogan phase could be scrapped
without too much loss for the company.

In defense, petitioner cannot rely on the conditions in small bold

print at the back of the ticket reading.

The passenger's acceptance of this ticket shall be

considered as an acceptance of the following
conditions:

3. In case the vessel cannot continue or complete the

trip for any cause whatsoever, the carrier reserves the
right to bring the passenger to his/her destination at
the expense of the carrier or to cancel the ticket and
refund the passenger the value of his/her ticket;

xxx xxx xxx

11. The sailing schedule of the vessel for which this

ticket was issued is subject to change without
previous notice. (Exhibit "l -A")

Even assuming that those conditions are squarely applicable to the

case at bar, petitioner did not comply with the same. It did not
cancel the ticket nor did it refund the value of the tickets to private
respondents. Besides, it was not the vessel's sailing schedule that
was involved. Private respondents' complaint is directed not at the
delayed departure the next day but at the by- passing of
Catbalogan, their destination. Had petitioner notified them
previously, and offered to bring them to their destination at its
expense, or refunded the value of the tickets purchased, perhaps,
this controversy would not have arisen.

Furthermore, the conditions relied upon by petitioner cannot

prevail over Articles 614 and 698 of the Code of Commerce
heretofore quoted.

The voyage to Catbalogan was "interrupted" by the captain upon

instruction of management. The "interruption" was not due to
fortuitous event or for majeure nor to disability of the vessel. Having
been caused by the captain upon instruction of management, the
passengers' right to indemnity is evident. The owner of a vessel and
the ship agent shall be civilly liable for the acts of the captain.

4. Juntilla vs. Fontanar (G.R. No. L-45637, May 31, 1985)

In the case at bar, there are specific acts of negligence on the part
of the respondents. The records show that the passenger jeepney
turned turtle and jumped into a ditch immediately after its right
rear tire exploded. The evidence shows that the passenger jeepney
was running at a very fast speed before the accident. We agree with
the observation of the petitioner that a public utility jeep running
at a regular and safe speed will not jump into a ditch when its right
rear tire blows up. There is also evidence to show that the passenger
jeepney was overloaded at the time of the accident. The petitioner
stated that there were three (3) passengers in the front seat and
fourteen (14) passengers in the rear.

While it may be true that the tire that blew-up was still good
because the grooves of the tire were still visible, this fact alone does
not make the explosion of the tire a fortuitous event. No evidence
was presented to show that the accident was due to adverse road
conditions or that precautions were taken by the jeepney driver to
compensate for any conditions liable to cause accidents. The
sudden blowing-up, therefore, could have been caused by too much
air pressure injected into the tire coupled by the fact that the
jeepney was overloaded and speeding at the time of the accident.

In Lasam v. Smith (45 Phil. 657), we laid down the following

essential characteristics of caso fortuito:

xxx xxx xxx

 ... In a legal sense and, consequently, also in relation
to contracts, a caso fortuito presents the following
essential characteristics: (1) The cause of the
unforeseen and unexpected occurrence, or of the
failure of the debtor to comply with his obligation,
must be independent of the human will. (2) It must be
impossible to foresee the event which constitutes
the caso fortuito, or if it can be foreseen, it must be
impossible to avoid. (3) The occurrence must be such
as to render it impossible for the debtor to fulfill his
obligation in a normal manner. And (4) the obligor
(debtor) must be free from any participation in the
aggravation of the injury resulting to the creditor.
(5 Encyclopedia Juridica Espanola, 309.)

It is sufficient to reiterate that the source of a common carrier's legal

liability is the contract of carriage, and by entering into the said
contract, it binds itself to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence
of a very cautious person, with a due regard for all the
circumstances. The records show that this obligation was not met
by the respondents.

5. Vergara vs. CA (G.R. No. 77679, Sept. 30, 1987)

It was established by competent evidence that the requisites of a

quasi-delict are present in the case at bar. These requisites are: (1)
damages to the plaintiff; (2) negligence, by act or omission, of which
defendant, or some person for whose acts he must respond, was
guilty; and (3) the connection of cause and effect between such
negligence and the damages.

It is undisputed that private respondent suffered damages as a

result of an act or omission of petitioner. The issue of whether or
not this act or omission can be considered as a "negligent" act or
omission was passed upon by the trial court. The findings of said
court, affirmed by the respondent court, which we are not prepared
to now disturb, show that the fact of occurrence of the "vehicular
accident" was sufficiently established by the policy report and the
testimony of Patrolman Masiclat. And the fact of negligence may be
deduced from the surrounding circumstances thereof. According to
the police report, "the cargo truck was travelling on the right side of
the road going to Manila and then it crossed to the center line and
went to the left side of the highway; it then bumped a tricycle; and
then another bicycle; and then said cargo truck rammed the store
warehouse of the plaintiff."2

According to the driver of the cargo truck, he applied the brakes but
the latter did not work due to mechanical defect. Contrary to the
claim of the petitioner, a mishap caused by defective brakes can not
be consideration as fortuitous in character. Certainly, the defects
were curable and the accident preventable.

Furthermore, the petitioner failed to adduce any evidence to

overcome the disputable presumption of negligence on his part in
the selection and supervision of his driver.

Based on the foregoing finding by the respondent Court that there

was negligence on the part of the petitioner, the petitioner's
contention that the respondent court erred in awarding private
respondent actual, moral and exemplary damages as well as
attorney's fees and costs, is untenable.

6. Eastern Shipping Lines vs. IAC (G.R. No. L-69044, May

29, 1987)

The 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, according to all the circumstances of each
case.

FACTS: A vessel operated by Eastern Shipping Lines, Inc. (Eastern

Shipping), loaded at Kobe, Japan for transportation to Manila,
5000 pieces of calorized lance pipes in 28 packages consigned
to Philippine Blooming Mills Co., Inc., and 7 cases of spare parts
consigned to Central Textile Mills, Inc.; Both sets of goods were
insured with Development Insurance and Surety Corp
(Development Insurance). In G.R. No. 71478, the same vessel took
on board 128 cartons of garment fabrics and accessories, in 2
containers, consigned to Mariveles Apparel Corporation which was
insured by Nisshin Fire and Marine Insurance Co. (Nishin), and two
cases of surveying instruments consigned to Aman Enterprises and
General Merchandise which was insured by Dow Fire and Marine
Insurance Co., Ltd (Dowa). Enroute for Kobe, Japan, to Manila, the
vessel caught fire and sank, resulting in the total loss of ship and
cargo.

Development Insurance, Nishin, and Dowa paid the corresponding

marine insurance values to the consignees concerned and were
thus subrogated unto the rights of the latter as the insured.
Development Insurance filed a suit against Eastern Shipping for the
recovery of the amounts it had paid to the insured. The latter denied
liability mainly on the ground that the loss was due to an
extraordinary fortuitous event, hence, it is not liable under the law.
Nishin and Dowa also filed suit against Eastern Shipping for the
recovery of the insured value of the cargo lost imputing
unseaworthiness of the ship and non- observance of extraordinary
diligence by Eastern Shipping. The latter denied liability on the
principal grounds that the fire which caused the sinking of the ship
is an exempting circumstance under Section 4(2) (b) of the Carriage
of Goods by Sea Act (COGSA); and that when the loss of fire is
established, the burden of proving negligence of the vessel is shifted
to the cargo shipper.

ISSUE: A. Which law shall govern, the Civil Code provisions on

Common Carriers of the Carriage of Goods by Sea Act?

B. Who has the burden of proof to show negligence of the carrier?

RULING: A. The law of the country to which the goods are to be

transported governs the liability of the common carrier in case of
their loss, destruction or deterioration. The liability of Eastern
Shipping is governed primarily by the Civil Code. However, in all
matters not regulated by said Code, the rights and obligations of
common carrier shall be governed by the Code of Commerce and by
special laws. Thus, the Carriage of Goods by Sea Act, a special law,
is suppletory to the provisions of the Civil Code.

B. The burden is upon Eastern Shipping Lines to prove that it has

exercised the extraordinary diligence required by law. Under the
Civil Code, the 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, according to all the
circumstances of each case. Common carriers are responsible for
the loss, destruction, or deterioration of the goods unless the same
is found on any of the cases under Article 1734 of the Civil Code.
Eastern Shipping claims that the loss of the vessel by fire exempts
it from liability under the phrase “natural disaster or calamity
in the said article. However, the Supreme Court is of the opinion
that fire may not be considered a natural disaster or calamity as it
arises almost invariably from some act of man or by human means.
Pursuant to Article 1733, common carriers are bound to
extraordinary diligence in the vigilance over the goods.

7. Servando vs. Philippine Steam Navigation (G.R. No. L-

36481-2, Oct. 23, 1982)

Upon arrival of the vessel at Pulupandan, in the morning of

November 18, 1963, the cargoes were discharged, complete and in
good order, unto the warehouse of the Bureau of Customs. At about
2:00 in the afternoon of the same day, said warehouse was razed by
a fire of unknown origin, destroying appellees' cargoes. Before the
fire, however, appellee Uy Bico was able to take delivery of 907
cavans of rice . Appellees' claims for the value of said goods were
rejected by the appellant.

Article 1736 of the Civil Code imposes upon common carriers the
duty to observe extraordinary diligence from the moment the goods
are unconditionally placed in their possession "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. "

The court a quo held that the delivery of the shipment in question
to the warehouse of the Bureau of Customs is not the delivery
contemplated by Article 1736; and since the burning of the
warehouse occurred before actual or constructive delivery of the
goods to the appellees, the loss is chargeable against the appellant.

It should be pointed out, however, that in the bills of lading issued

for the cargoes in question, the parties agreed to limit the
responsibility of the carrier for the loss or damage that may be
caused to the shipment by inserting therein the following
stipulation:

Clause 14. Carrier shall not be responsible for loss or

damage to shipments billed 'owner's risk' unless such
loss or damage is due to negligence of carrier. Nor
shall carrier be responsible for loss or damage caused
by force majeure, dangers or accidents of the sea or
other waters; war; public enemies; . . . fire . ...

We sustain the validity of the above stipulation; there is nothing

therein that is contrary to law, morals or public policy.

Appellees would contend that the above stipulation does not bind
them because it was printed in fine letters on the back-of the bills
of lading; and that they did not sign the same. This argument
overlooks the pronouncement of this Court in Ong Yiu vs. Court of
Appeals, promulgated June 29, 1979, 3 where the same issue was
resolved in this wise:

While it may be true that petitioner had not signed the

plane ticket (Exh. '12'), he is nevertheless bound by
the provisions thereof. 'Such provisions have been
held to be a part of the contract of carriage, and valid
and binding upon the passenger regardless of the
latter's lack of knowledge or assent to the regulation'.
It is what is known as a contract of 'adhesion', in
regards which it has been said that contracts of
adhesion wherein one party imposes a ready made
form of contract on the other, as the plane ticket in
the case at bar, are contracts not entirely prohibited.
The one who adheres to the contract is in reality free
to reject it entirely; if he adheres, he gives his
consent." (Tolentino, Civil Code, Vol. IV, 1962 Ed., p.
462, citing Mr. Justice J.B.L. Reyes, Lawyer's Journal,
Jan. 31, 1951, p. 49).

Besides, the agreement contained in the above quoted Clause 14 is

a mere iteration of the basic principle of law written in Article 1 1 7
4 of the Civil Code:

Article 1174. Except in cases expressly specified by

the law, or when it is otherwise declared by
stipulation, or when the nature of the obligation
requires the assumption of risk, no person shall be
responsible for those events which could not be
foreseen, or which, though foreseen, were inevitable.

Thus, where fortuitous event or force majeure is the immediate and

proximate cause of the loss, the obligor is exempt from liability for
non-performance. The Partidas, 4 the antecedent of Article 1174 of
the Civil Code, defines 'caso fortuito' as 'an event that takes place
by accident and could not have been foreseen. Examples of this are
destruction of houses, unexpected fire, shipwreck, violence of
robbers.'

In its dissertation of the phrase 'caso fortuito' the Enciclopedia

Juridicada Espanola 5 says: "In a legal sense and, consequently,
also in relation to contracts, a 'caso fortuito' presents the following
essential characteristics: (1) the cause of the unforeseen and
unexpected occurrence, or of the failure of the debtor to comply with
his obligation, must be independent of the human will; (2) it must
be impossible to foresee the event which constitutes the 'caso
fortuito', or if it can be foreseen, it must be impossible to avoid; (3)
the occurrence must be such as to render it impossible for the
debtor to fulfill his obligation in a normal manner; and (4) the
obligor must be free from any participation in the aggravation of the
injury resulting to the creditor." In the case at bar, the burning of
the customs warehouse was an extraordinary event which
happened independently of the will of the appellant. The latter could
not have foreseen the event.

There is nothing in the record to show that appellant carrier

,incurred in delay in the performance of its obligation. It appears
that appellant had not only notified appellees of the arrival of their
shipment, but had demanded that the same be withdrawn. In fact,
pursuant to such demand, appellee Uy Bico had taken delivery of
907 cavans of rice before the burning of the warehouse.

Nor can the appellant or its employees be charged with negligence.

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.

The lower court in its decision relied on the ruling laid down in Yu
Biao Sontua vs. Ossorio 6, where this Court held the defendant liable
for damages arising from a fire caused by the negligence of the
defendant's employees while loading cases of gasoline and petroleon
products. But unlike in the said case, there is not a shred of proof
in the present case that the cause of the fire that broke out in the
Custom's warehouse was in any way attributable to the negligence
of the appellant or its employees. Under the circumstances, the
appellant is plainly not responsible.

Delay

1. De Guzman vs. CA (G.R. No. L-47822, Dec. 22, 1988)

Here, Ernesto Cendana is deemed a common carrier. He is a junk

dealer who was engaged in buying up used bottles and scrap
metal in Pangasinan. Upon gathering sufficient quantities of
such scrap material, respondent would bring such material to
Manila for resale. He utilized two (2) six-wheeler trucks which he
owned for hauling the material to Manila. On the return trip
to Pangasinan, respondent would load his vehicles with cargo
which various merchants wanted delivered to differing
establishments in Pangasinan. For that service, respondent
charged freight rates which were commonly lower than regular
commercial rates.

The precise issue that we address here relates to the specific

requirements of the duty of extraordinary diligence in the
vigilance over the goods carried in the specific context of hijacking
or armed robbery.

Under Article 1745 (6) above, a common carrier is held responsible

— and will not be allowed to divest or to diminish such
responsibility — even for acts of strangers like thieves or
robbers, except where such thieves or robbers in fact acted
"with grave or irresistible threat, violence or force." We believe
and so hold that the limits of the duty of extraordinary diligence in
the vigilance over the goods carried are reached where the goods are
lost as a result of a robbery which is attended by "grave or
irresistible threat, violence or force."

In the instant case, armed men held up the second truck owned by
private respondent which carried petitioner's cargo. The record
shows that an information for robbery in band was filed in the Court
of First Instance of Tarlac, Branch 2, in Criminal Case No. 198
entitled "People of the Philippines v. Felipe Boncorno, Napoleon
Presno, Armando Mesina, Oscar Oria and one John Doe." There,
the accused were charged with willfully and unlawfully taking and
carrying away with them the second truck, driven by Manuel
Estrada and loaded with the 600 cartons of Liberty filled milk
destined for delivery at petitioner's store in Urdaneta, Pangasinan.
The decision of the trial court shows that the accused acted with
grave, if not irresistible, threat, violence or force. Three (3) of the five
(5) hold-uppers were armed with firearms. The robbers not only took
away the truck and its cargo but also kidnapped the driver and his
helper, detaining them for several days and later releasing them in
another province (in Zambales). The hijacked truck was
subsequently found by the police in Quezon City. The Court of First
Instance convicted all the accused of robbery, though not of robbery
in band.

In these circumstances, we hold that the occurrence of the loss

must reasonably be regarded as quite beyond the control of the
common carrier and properly regarded as a fortuitous event. It is
necessary to recall that even common carriers are not made
absolute insurers against all risks of travel and of transport of
goods, and are not held liable for acts or events which cannot be
foreseen or are inevitable, provided that they shall have
complied with the rigorous standard of extraordinary diligence.

We, therefore, agree with the result reached by the Court of

Appeals that private respondent Cendana is not liable for the value
of the undelivered merchandise which was lost because of an event
entirely beyond private respondent's control.

II. VIGILANCE OVER THE GOODS

1. Extent of extra-ordinary diligence

2. Delivery

The goods are deemed delivered to the carrier when the goods
are ready for and have been placed in the exclusive
possession, custody and control of the carrier for the
purpose of their immediate transportation and the carrier
has accepted them. When the carrier has thus accepted such
delivery, the liability of the carrier commences eo instant
(Saludo, Jr. v. CA, G.R. No. 95536, March 23, 1992, citing
13 Am. Jur. 2d, Carriers, 763-764).

Party to whom delivery should be made

It must be delivered, actually or constructively, to the

consignee or to the person who has a right to receive them
(Art.1736, NCC).
 Delivery of the cargo to the customs authorities is not
delivery to the consignee, or to the person who has a right to
receive them (Lu Do & Lu Ym Corp. vs. Binamira, G.R. No.
L-9840, April 22, 1957).

Constructive delivery

There is constructive delivery when delivery is effected

not by actually transferring the possession of thing to the
vendee (in this case, the other party, either the carrier or
the consignee) but by legal formalities or by symbolic
tradition (Pineda, 2010).

NOTE: Delivery of the cargo to the customs authorities

is not delivery of the cargo to the consignee, or to the
person who has a right to receive them", contemplated
in Article 1736, because in such case the goods are still in
the hands of the Government and the owner cannot exercise
dominion over them. However, the parties may agree to
limit the liability of the carrier considering that the goods
have still to through the inspection of the customs
authorities before they are actually turned over to the
consignee. It is a situation where the carrier losses 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. This stipulation is not contrary to morals
or public policy (Lu Do v. Binamira, G.R. No. L-9840, April
22, 1957).

Misdelivery by a carrier who was chosen by the buyer

Misdelivery of the goods is attributable to the carrier and

not to the seller. And, since the carrier was chosen and
authorized to make the delivery by the buyer itself, the
seller cannot be held responsible for such misdelivery
(Smith, Bell & Co. [Phils.] vs. Gimenez, G.R. No. L-17617,
June 29, 1963).

• Lu Do & Lu Ym Corp. vs. Binamira (G.R. No. L-9840, April

22, 1957)

While the Court agrees with the CA that delivery to the customs
authorities is not the delivery contemplated by Article 1736 because
the owner cannot exercise dominion over them, it believes that the
parties may agree to limit the liability of the carrier in connection
therewith considering that the goods have still to go through the
inspection of the customs authorities. The carrier losses 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.

In the case at bar, this is precisely what was done by the parties. In
the corresponding bill of lading, both the carrier and the consignee
have stipulated to limit the responsibility of the former for the loss or
damage that may occur to the goods before they are actually
delivered. It appears that the carrier does not assume liability for any
loss or damage once they have been taken into the custody of
customs or other authorities or when they have been delivered at
ship's tackle. These stipulations have been adopted precisely to
mitigate the responsibility of the carrier considering the present law
on the matter and the Court finds nothing therein that is contrary to
morals or public policy that may justify their nullification.

FACTS: Delta Photo Supply Company of New York shipped on

board the M/S FERNSIDE at New York, U.S.A. 6 cases of films
and/or photographic supplies consigned to the order of I. V.
Binamira. Bill of Lading was, accordingly, issued. The ship arrived
at the port of Cebu and 3 days after the goods were unloaded from
the ship, I. V. Binamira took delivery of the goods from Visayan
Cebu Terminal Company Inc., the arrastre operator. He then
discovered that the cases showed signs of pilferage.

It was found out from the investigation that the goods shipped were
discharged from the ship by the stevedoring company hired by Lu
Do & Lu Ym Corp. as agent of the carrier. The shipment was then
received by the arrastre operator appointed by the Bureau of
Customs. During the discharge, the cargo was checked both by the
stevedoring company and the arrastre operator and was found to
be in good order and condition. However, after it was delivered to
I.V. BInamira 3 days later, the same was examined by a marine
surveyor who found that some films and supplies were missing.

ISSUE: Whether the carrier is completely 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. (NO)

RULING: It is true that, as a rule, a common carrier is responsible

for the loss, destruction or deterioration of the goods it assumes to
carry from one place to another unless the same is due to any to
any of the causes mentioned in Article 1734 of the New Civil Code.
If the goods are lost, destroyed or deteriorated for causes other that
those mentioned, the common carrier is presumed to have been at
fault or to have acted negligently unless it proves that it has
observed extraordinary diligence in their care from the time the
goods are placed in its possession to the time the same are delivered
to the consignee or to the person who has the right to receive them.
These provisions only apply when the loss, destruction or
deterioration takes place while the goods are in the possession of
the carrier and not after it has lost control of them. The reason is
obvious. While the goods are in its possession, it is but fair to expect
it to exercise extraordinary diligence in protecting them from
damage. If loss occurs, the law presumes that it was due to its fault
or negligence. This is necessary to protect the interest of the owner
who is at its mercy.

While the Court agrees with the CA that delivery to the customs
authorities is not the delivery contemplated by Article 1736 because
the goods are still in the hands of the Government and the owner
cannot exercise dominion over them, it believes that the parties may
agree to limit the liability of the carrier in connection therewith
considering that the goods have still to go through the inspection of
the customs authorities before they are actually turned over to the
consignee. The carrier losses 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.
In the case at bar, this is precisely what was done by the parties. In
the corresponding bill of lading, both the carrier and the consignee
have stipulated to limit the responsibility of the former for the loss
or damage that may occur to the goods before they are actually
delivered. It appears that the carrier does not assume liability for
any loss or damage once they have been taken into the custody of
customs or other authorities or when they have been delivered at
ship's tackle. These stipulations have been adopted precisely to
mitigate the responsibility of the carrier considering the present law
on the matter and the Court finds nothing therein that is contrary
to morals or public policy that may justify their nullification.

• Smith Bell & Co. [Phils] vs. Gimenez (G.R. L-17617, June
29, 1963)

The records disclose that upon requisition by the Municipal

Treasurer of Paniqui, Tarlac, the Bureau of Supply Coordination
sent Order No. A-236113 to petitioner for 1 Underwood Typewriter,
Model SX 161, 15" carriage, elite type, at a price of P820.00 taxes
included (Exh. B-l). By express agreement of the parties, the terms
of the sale were F.O.B. Manila.

Government Bill of Lading No. 49226 dated August 26, 1958, signed
by Eutiquio Flores, Principal Storekeeper of Supply Coordination
authorized the Phil-American Freight Forwarding Services, Inc. to
receive, carry, and deliver the typewriter, to the Municipal Treasurer
of Paniqui (Exh. B-2). An agent of the carrier signed for the receipt
of the typewriter, on August 28, 1958 in apparent good order, but
"contents and condition of contents of sealed packages unknown".
(Exh. B-2).

By Commercial Way Bill No. 1114 of the Phil-American Freight

Forwarding Services, Inc. the carrier acknowledged on August 28,
1958 sending one carton Underwood Typewriter, Model Brand Now
from consignor Smith Bell at Manila to the consignee the Municipal
Treasurer of Paniqui. (Exh. A). The blank spaces opposite the
printed word "Consignee" and "Date Received" are filled with
handwritten square letters reading, respectively: "Pat. H. S. Musni"
and "Aug. 30, 1958".

On September 9, 1958, at dawn, the Municipal building of Paniqui

was totally razed by fire.

Shortly after the delivery of the typewriter as certified by the carrier,

petitioner Smith Bell & Co. sent a bill for P820.00 covering its cost.
On October 25, 1958, the municipal Council of Paniqui adopted
Resolution No. III in effect requesting petitioner to condone the
payment of the said typewriter, it having been burned 10- days after
it was bought with all the office equipment when the municipal
building was totally razed by tire on September 9, 1958. Petitioner
declined the request.

Thereafter or on May 25, 1959, the Municipal Treasurer of Paniqui

submitted to the Provincial Treasurer of Tarlac a voucher covering
the payment of the typewriter. The matter was referred to the
administrative deputy for investigation. This official, in his report
dated January 29, 1960, (pp. 32-34, GAO record) found that there
was actual delivery of the typewriter and that the municipality was
liable for the payment thereof. The Provincial Treasurer, in view of
this report, indorsed the papers to the Provincial Auditor, with the
statement that payment of the typewriter be effected as soon as
possible.

The Provincial Auditor, instead, forwarded the papers to the Auditor

General for final decision, which latter official disapproved the claim
and held that the Municipality of Paniqui is not liable for the
amount of P820.00 representing the cost of the typewriter. In
refusing to pass the claim in audit, respondent held that there was
no delivery, and that the article in question was never presented for
inspection and verification as agreed upon and consequently, the
ownership of the typewriter did not pass to the consignee, and the
risk of loss remained with the seller.

This is an appeal from said decision.

The first ground of objection raised by the Auditor General is not

supported by the facts as they appear in the records of this case.
That there was actual delivery of a typewriter to the municipality of
Paniqui is, to our mind, unquestionable. The records of the carrier
proves the testimony of the policeman on guard at the municipal
building of Paniqui at the time of its delivery in the afternoon of
Saturday, August 30, 1958 and who personally received the same
establishes it; and the testimony of the then municipal mayor who
saw the delivery and ordered the taking of the typewriter to his
office, undisputably corroborates it.

A verification of the debris after the fire conclusively shows that

there was one additional typewriter burned in the premises, more
than those formerly present in the municipal building before said
fire. If these were not sufficient, the official act of the municipal
council in adopting the resolution of October 25, 1958, requesting
the petitioner herein, in effect, to condone the payment of the
typewriter purchased by the municipality, shows beyond doubt that
the typewriter was actually delivered to, and received by said
municipality. The Auditor General, in his decision, depended more
on technicalities when he based his refusal to pass in audit the
claim of petitioner, on the mere fact that the delivery of the machine
was made not to the municipal treasurer personally (who was the
consignee named in the bill of lading), or to his duly authorized
representative as required in the bill of lading, but to a policeman
of the same municipality.

But this circumstance has been explained both by the municipal

treasurer himself and the policeman and the mayor who took
delivery of the machine, to the effect that the delivery was made on
a Saturday afternoon when the municipal treasurer's office was
already closed, and that the municipal treasurer went to Manila on
official business from September 2 to 6, returning to Paniqui only
on the following Saturday, September 7, when he went to his office
late in the afternoon just to fix his papers. In this connection, let it
be noted that the non-compliance of the condition in the bill of
lading that delivery must be made to the consignee or his
representative, is attributable to the carrier and not to the
petitioner. And, since the carrier was chosen and authorized to
make the delivery by the Bureau of Supply Coordination itself,
certainly the petitioner cannot be held responsible for such
misdelivery, if at all it was one.

The fact that the typewriter purchased by the municipality was of a

15-inch carriage-type and that none of those found in the debris
had such make, is no sufficient reason to conclude that the
typewriter ordered was not delivered to the municipality, because
as the inspector who examined the remains of the fire himself stated
there were certain missing parts in some of the typewriters that
could not be located. The fact remains that there was one additional
typewriter that was burned, which under the circumstances could
be none other than the one delivered to the municipality 10 days
before the fire.

With respect to the claim that the petitioner failed to call the
General Auditing Office for inspection and checking of the
typewriter before making delivery thereof, as contained in condition
No. 2 in the mimeographed contract-order Exhibit B-l, it appears
undisputed that this is a condition embodied in the old forms used
before 1957. However, as of January 22 of that year (1957), General
Auditing Office circular No. 45 was promulgated providing that
"effective immediately, employees of the General Auditing Office will
no longer participate in an agency's inspection of supplies,
materials and equipment upon receipt, where the amount of the
order is P2,000.06 or less".

This circular was supplemented by GAO Provincial Auditor's

circular No. 35 of April 24, 1957 to the effect that "deliveries of
supplies, materials and equipment of P2,000.00 or lees per order
need not be submitted to the Auditor for inspection". The only
answer made to the contention of the petitioner that in view of these
circulars, condition No. 2 appearing in the printed or
mimeographed form-contract became a dead provision as of the
dates of said circulars, is that since said condition appeared in the
purchase order in question and accepted by the petitioner, the latter
is bound thereby, pursuant to the legal principle that the terms of
the contract are the law between the parties. While we agree with
this as a general principle, yet upon the facts obtaining in this case,
we believe that injustice would be done the petitioner if we apply
said principle to the present claim.

Lastly, the fact that the municipal officials of Paniqui took delivery
of the typewriter in question and made use thereof for a period of
10 days, constitutes proof that said typewriter was accepted and
the municipality thereby, as a buyer, became liable for the payment
of the price thereof.

"Art. 1585. The buyer is deemed to have accepted the goods when
he intimates to the seller that he has accepted them, or when the
goods have been delivered to him, and he does an act in relation to
them which is inconsistent with the ownership of the seller, or
when, after the lapse of a reasonable time, he retains the goods
without intimating to the seller that he has rejected them."

For all the foregoing, we find that under the law and equity of the
case, the municipality of Paniqui is legally bound to pay for the price
of the typewriter involved herein and, therefore, the decision of the
Auditor General is hereby reversed. Without costs. So ordered.

3. Stoppage in Transitu

It is the right exercised by the seller by stopping the delivery of

the goods, in case of insolvency of the buyer or consignee, when
such goods are already in transit (NCC, Art. 1530).

The seller may exercise this right either:

1. By obtaining actual possession of the goods; or

2. By giving notice of his claim to the carrier or other bailee

in whose possession the goods are.

NOTE: Notice may be given either to the person in actual

possession of the goods or to his principal. In the latter
case, the notice, to be effectual, must be given at such time
and under such circumstances that the principal, by the
exercise of reasonable diligence, may prevent a delivery to the
buyer (NCC, Art. 1532).

GR: The common carrier’s duty to observe extraordinary

diligence in the vigilance over the goods remains in full
force and effect even when they are temporarily unloaded or
stored in transit.

XPN: When the shipper or owner has made use of the right
of stoppage in transit (Art. 1737, NCC).

The diligence required is merely ordinary diligence because of

the following:

1. It is holding the goods in the capacity of an ordinary

bailee or warehouseman and not as a carrier.

2. There is a change of contract from a contract of carriage

to a contract of deposit (Art. 1737, NCC).

Obligation required of the common carrier in case of stoppage

in transitu

When notice of stoppage in transitu is given by the seller to

the carrier, he must redeliver the goods to, or according to
the directions of, the seller. The expenses of such delivery
must be borne by the seller (Art. 1532, NCC).

NOTE: If the seller instructs to deliver it somewhere else, a

new contract of carriage is formed and the carrier must be
paid accordingly.

4. Valid Stipulations

Valid stipulations that a common carrier of goods may indicate

in a contract in order to escape liability.

1. A stipulation limiting the liability of the common

carrier for the loss, destruction, or deterioration of the
 goods to a degree less than extraordinary diligence,
provided it be:

a. In writing, signed by the shipper or owner;

b. Supported by a valuable consideration other than

the service rendered by the common carrier, and

c. Reasonable, just and not contrary to public policy.

2. An agreement limiting the common carrier's liability

for delay on account of strikes or riots (Art. 1748, NCC).
3. 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 (Art. 1749, NCC; 1998, 2002 Bar).
4. A contract fixing the sum that may be recovered by
the owner or shipper for the loss, destruction, or
deterioration of the goods (Art. 1750, NCC).

NOTE: The contract limiting the common carrier's liability

cannot be availed of in case of loss, destruction, or
deterioration of the goods, if the common carrier, without
just cause: delays the transportation of the goods; or changes
the stipulated or usual route (Art. 1747, NCC).

Even if there is an agreement limiting the liability of the

common carrier in the vigilance over the goods, the common
carrier is still disputably presumed to have been negligent in
case of its loss, destruction or deterioration (Art. 1752, NCC).

Annulment of a stipulation limiting the common carrier’s

liability by the shipper or owner.

A stipulation 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 shipper or owner
agreed to such stipulation (Art. 1746, NCC).

5. Void Stipulations

Void stipulations in a contract of carriage of goods

(CR2UELED)

1. That the common carrier need not observe any diligence

in the Custody of the goods;
2. That the goods are transported at the Risk of the owner
or shipper;
3. 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;
4. Any similar stipulation that is Unreasonable, unjust
and contrary to public policy;
5. That the common carrier shall Exercise a degree
of diligence less than that of a good father of a
family, or a man of ordinary prudence in the vigilance
over the movables transported;
6. That the common carrier will not be liable for any Loss,
destruction, or deterioration of the goods;
7. That the common carrier shall not be responsible for
the acts or omissions of his or its Employees; and
8. 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 (Art.
1745, NCC)

Q: Discuss whether the following stipulations in a contract of

carriage of a common carrier are valid:

A stipulation limiting the sum that may be recovered by the

shipper or owner to 90% of the value of the goods in case of
loss due to theft.

Invalid. Article 1745 provides that a stipulation which dispenses

or diminishes the common carrier’s liability for acts committed
by thieves or robbers who do not act with grave and irresistible
force, threat or violence is unreasonable, unjust, and contrary to
public policy.

A stipulation that in the event of loss, destruction, or

deterioration of goods on account of the defective condition
of the vehicle used in the contract of carriage, the carrier’s
liability is limited to the value of the goods appearing in the
bill of lading unless the shipper or owner declares a higher
value.

Valid. Article 1749 provide that a stipulation limiting the carrier’s

liability to the value of the goods appearing in the bill of lading
unless the shipper or owner declares a higher value, is binding.

6. Limitation of Liability

Limitation of Liability to Fixed Amount

A contract fixing the sum that may be recovered for the loss,
destruction, and deterioration of goods is binding provided
that it is:

1. Just and reasonable under the circumstances; and

2. Has been fairly and freely agreed upon (Art. 1750,
NCC).

The liability of a common carrier may, by contract, be limited

to a fixed amount, but the agreement must be in writing and
signed by the shipper or owner of the goods, besides the
other requirements of the law (Shewaran v. PAL, G.R. No. L-
20099, July 7, 1966).
Q: Martin Nove shipped an expensive video equipment to a
friend in Cebu. Martin had bought the equipment from Hong
Kong for U.S. $5,000. The equipment was shipped through
M/S Lapu-Lapu under a bill of lading which contained the
following provision in big bold letters: “The limit of the
carrier’s liability for any loss or damage to cargo shall be P200
regardless of the actual value of such cargo, whether
declared by shipper or otherwise.” The cargo was totally
damaged before reaching Cebu. Martin Nove claimed for the
value of his cargo ($5,000 or about P100,000) instead of just
P200 as per the limitation on the bill of lading. Is there any
legal basis for Nove’s claim?(1987 Bar)

A: YES, there is legal basis for the claim of Martin Nove. The
stipulation limiting the carrier’s liability up to a certain amount
“regardless of the actual value of such cargo, whether declared by
its shipper or otherwise,” is violative of the requirement of Art. 1750
of Civil Code, which provides that stipulations limiting liability
should be fairly and freely agreed upon. A stipulation that denies to
the shipper the right to declare the actual value of his cargoes and
to recover, in case of loss or damage, on the basis of such
stipulation would be invalid.

Limitation of Liability in the Absence of Declaration of Greater

Value

GR: The liability of the common carrier shall not exceed the
stipulation in a contract of carriage, even if the loss or
damage results from the carrier's negligence (Eastern and
Australian Shipping Co. v. Great American Insurance Co.,
GR No. L-37604, October 23, 1981).

XPN: Common carrier’s liability may be extended beyond the

specified amount mentioned if the shipper or owner of the
goods:

1. Declares a greater value and;

2. Pays corresponding freight (Art. 1749, NCC)

The liability of an airline company for lost baggage is limited

to the amount stated in the ticket unless the passenger
declared a higher valuation and paid additional fare (Pan
American World Airways, Inc. v. IAC, G.R. No. 70462, August
11, 1988).

Q: X took a plane from Manila bound for Davao via Cebu where
there was a change of planes. X arrived in Davao safely but to
his dismay, his two suitcases were left behind in Cebu. The
airline company assured X that the suitcases would come
in the next flight but they never did. X claimed P2,000.00
for the loss of both suitcases, but the airline was willing to pay
only P500.00 because the airline ticket stipulated that unless
a higher value was declared, any claim for loss cannot exceed
P250 for each piece of luggage. X reasoned out that he did not
sign the stipulation and in fact had not even read it. X did not
declare a greater value despite the fact that the clerk had called
the attention to the stipulation in the ticket. (1998 Bar)

A: X is bound by the stipulation written in the ticket because he

consented to the terms and conditions thereof from the moment he
availed the services of the carrier. The fact that he did not sign the
ticket and he was not able to declare the true value of his luggage
is not a valid claim in order for the carrier to pay for the value of the
lost luggage. As a general rule, the liability of the common carrier
shall not exceed the stipulation in a contract of carriage even if the
loss or damage results from the carrier’s negligence However, it
is subject to an exception provided under Art. 1749 of NCC, as
when the shipper or owner of the goods declares a greater value
and pays corresponding freight. X, therefore is only entitled to P500
for the two pieces of luggage lost (Eastern and Australian Shipping
Co., v. Great American Insurance Co., G.R. No. L-37604, October 23,
1981).

But when the goods being shipped are packed in cartons placed in
containers supplied by the carrier and the number of cartons is
disclosed in the shipping documents, it is the number of cartons
and not of the containers that should be used in computing
the liability of the carrier for the loss of the goods, as it is the cartons
that constitute the packages (Eastern Shipping Lines, Inc. s. IAC,
G.R. No. L-71478, May 29, 1987).

• Eastern and Australian Shipping Co. vs. Great American

Insurance Co. (G.R. No. L-37604, October 23, 1981)

There is no inconsistency between Section 4 (5) of the Carriage of

Goods by Sea Act and Clause 17 of the Bill of Lading. The first part
of the provision of Section 4 (5) of the Carriage of Goods by Sea Act
limits the amount that may be recovered by the shipper in the
absence of an agreement as to the nature and value of goods
shipped. Said provision does not prescribe the minimum. Hence, it
could be any amount which is below $500.00. In the case at bar,
Clause 17 of the Bill of Lading provides that the carrier may only be
held liable for an amount not more than L100 Sterling which is below
the limit required in the Carriage of Goods by Sea Act.

The second paragraph of Section 4 (5) of the Carriage of Goods by

Sea Act prescribing an amount of not less than $500.00, on the other
hand, refers to a situation where there is an agreement other than
that set forth in the Bill of Lading. In the case at bar, it is apparent
that there had been no such agreement between the parties. It should
be noted that both the Carriage of Goods by Sea Act and Clause 17
of the Bill of Lading allow the payment beyond the respective limit
imposed therein provided that the value of the goods have been
declared in the Bill of Lading.

FACTS: Jackson and Spring (Sydney) Pty. Ltd. shipped from

Sydney 1 case of impellers for warman pump on board SS "Chitral",
a vessel owned and operated by Eastern & Australian Steamship
Co., Ltd. through its agent F.E. Zuellig, Inc. The shipment is to be
delivered to Manila in favor of consignee Benguet Consolidated, Inc.
and was insured with Great American Insurance, Co.

When SS "Chitral" arrived in Manila, the shipment or any part

thereof was not discharged. Demand was thus made on the
petitioners for the delivery of the same. For having failed comply
with the demand, a claim was presented against it for the value of
the shipment. Since the petitioners failed to make good the claim
also, Great American Insurance Co. was compelled to pay the
consignee P 35,921,81. As subrogee, the insurer filed a complaint
against the petitioners for the recovery of the said amount. In their
answer, petitioners alleged that their liability is only limited to L100
Sterling or its peso equivalent of P1,544.40 as per Clause 17 of the
Bill of Lading.

The trial court found that under Section 4 (5) of the Carriage of
Goods by Sea Act, the carrier and the shipper may, in the absence
of a declaration in the Bill of Lading of the value of the goods
shipped, fix a maximum liability of the shipper for the cargo lost or
damaged but such maximum shall not be less than $500.00 per
package. Consequently, the agreement for a maximum liability of
only L100 Sterling contained in Clause 17 of the Bill of Lading was
declared void for being contrary to law.

ISSUE: Whether Clause 17 of the Bill of Lading is contrary to law

and, therefore, void. (NO)

RULING: There is no inconsistency between Section 4 (5) of the

Carriage of Goods by Sea Act and Clause 17 of the Bill of Lading.
The first part of the provision of Section 4 (5) of the Carriage of
Goods by Sea Act limits the amount that may be recovered by the
shipper in the absence of an agreement as to the nature and value
of goods shipped. Said provision does not prescribe the minimum.
Hence, it could be any amount which is below $500.00. In the case
at bar, Clause 17 of the Bill of Lading provides that the carrier may
only be held liable for an amount not more than L100 Sterling which
is below the limit required in the Carriage of Goods by Sea Act.

The second paragraph of Section 4 (5) of the Carriage of Goods by

Sea Act prescribing an amount of not less than $500.00, on the
other hand, refers to a situation where there is an agreement other
than that set forth in the Bill of Lading. In the case at bar, it is
apparent that there had been no such agreement between the
parties. It should be noted that both the Carriage of Goods by Sea
Act and Clause 17 of the Bill of Lading allow the payment beyond
the respective limit imposed therein provided that the value of the
goods have been declared in the Bill of Lading.

Significantly, Article 1749 of the New Civil Code expressly allow the
limitation of the carrier's liability. It provides:

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.

Pursuant to such provision, where the shipper is silent as to the

value of his goods, the carrier's liability for loss or damage thereto
is limited to the amount specified in the contract of carriage. Where
the shipper states the value of his goods, the carrier's liability for
loss or damage thereto is limited to that amount. Under a
stipulation such as this, it is the duty of the shipper to disclose,
rather than the carrier's, to demand the true value of the goods.

7. Check-in Baggage

Baggage is any personal property carried by the passenger,

either check-in or hand-carry (Sec. 2.1, Air Passenger Bill of
Rights).

The provisions of Articles 1733 to 1753, NCC shall apply (Art.

1754, NCC).

An airline company is liable for moral damages where it

left behind the luggage of a passenger, and its employees
did not assist the passenger in locating his luggage but
instead treated him boorishly (Pan American World Airways
v. IAC, G.R. No. 68988, June 21, 1990).

In one case, the Court held that the cause of the loss was the
negligence of the carrier in not ensuring that the doors of the
baggage compartment of the bus were securely fastened
(Sarkies Tours Philippines, Inc. v. CA, G.R. No. 108897,
October 2, 1997).

Baggage in Possession of Passengers

The rules in Articles 1998 and 2000 to 2003, NCC concerning

the responsibility of hotel-keepers for necessary deposit shall
be applicable.

1. The common carrier shall be responsible for shipper’s

baggage as depositaries, provided that:

a. notice was given to them, or to their employees, of

the effects brought by the guests; and

b. on the part of the shipper, they take the precautions

which said common carriers or their substitutes
advised relative to the care and vigilance of their
effects (Art. 1998, NCC).

2. The responsibility shall include the loss of, or injury to the

personal property of the shipper caused by the employees of
the common carrier as well as strangers; but not that which
may proceed from any force majeure (Art. 2000, NCC).

3. The act of a thief or robber, who has entered thecarrier, is

not deemed force majeure, unless it is done with the use
of arms or through an irresistible force (Art. 2001, NCC).

4. The common carrier is not liable for compensation if

the loss is due to the acts of the shipper, his family, or
servants, or if the loss arises from the character of the things
brought into the carrier (Art. 2002, NCC).

5. The common carrier cannot free himself from

responsibility by posting notices to the effect that he is not
liable for the articles brought by the passenger. Any
stipulation between the common carrier and the shipper
whereby the responsibility of the former as set forth in
 Articles 1998 to 2001 is suppressed or diminished shall
be void (Art. 2003, NCC).

Q: Pasahero, a paying passenger, boarded a Victory Liner

bus bound for Olongapo. He chose a seat at the front near the
bus driver. Pasahero told the bus driver that he had valuable
items in his bag which was placed near his feet. Since he had
not slept for 24 hours, he requested the driver to keep an
eye on the bag should he doze off during the trip. While
Pasahero was asleep, another passenger took the bag away
and alighted at Guagua, Pampanga. Is Victory Liner liable to
Pasahero? Explain. (1987 Bar)

A: YES. The responsibility of common carriers in the case of loss or

damage to hand-carried baggage is governed by the rule on
necessary deposits. The common carrier is thus liable for the loss
of the personal property caused by its employees or by strangers.
In this case, the passenger told the driver that he had valuable item
placed beside the driver’s seat. If the driver exercised due diligence,
he could have prevented the loss of the bag.

• Sarkies Tours Philippines, Inc. vs. CA (G.R. No. 108897,

October 02, 1997)

On August 31, 1984, Fatima boarded petitioner’s De Luxe Bus No.

5 in Manila on her way to Legazpi City. Her brother Raul helped her
load three pieces of luggage containing all of her optometry review
books, materials and equipment, trial lenses, trial contact lenses,
passport and visa, as well as her mother Marisol’s U.S. immigration
(green) card, among other important documents and personal
belongings. Her belongings was kept in the baggage compartment
of the bus, but during a stopover at Daet, it was discovered that all
but one bag remained in the open compartment. The others,
including Fatima’s things, were missing and could have dropped
along the way. Some of the passengers suggested retracing the
route to try to recover the lost items, but the driver ignored them
and proceeded to Legazpi City.

Fatima immediately reported the loss to her mother who, in turn,

went to petitioner’s office in Legazpi City and later at its head office
in Manila. The latter, however, merely offered her P1,000.00 for
each piece of luggage lost, which she turned down. After returning
to Bicol disappointed but not defeated, they asked assistance from
the radio stations and even from Philtranco bus drivers who plied
the same route on August 31st. The effort paid off when one of
Fatima’s bags was recovered. Marisol also reported the incident to
the National Bureau of Investigation’s field office in Legazpi City,
and to the local police.

On September 20, 1984, respondents, through counsel, formally

demanded satisfaction of their complaint from petitioner. In a letter
dated October 1, 1984, the latter apologized for the delay and said
that “(a) team has been sent out to Bicol for the purpose of
recovering or at least getting the full detail”[1] of the incident.

After more than nine months of fruitless waiting, respondents

decided to file the case below to recover the value of the remaining
lost items, as well as moral and exemplary damages, attorney’s fees
and expenses of litigation. They claimed that the loss was due to
petitioner’s failure to observe extraordinary diligence in the care of
Fatima’s luggage and that petitioner dealt with them in bad faith
from the start. Petitioner, on the other hand, disowned any liability
for the loss on the ground that Fatima allegedly did not declare any
excess baggage upon boarding its bus.

After a careful scrutiny of the records of this case, we are convinced

that the trial and appellate courts resolved the issues judiciously
based on the evidence at hand.

Petitioner claims that Fatima did not bring any piece of luggage with
her, and even if she did, none was declared at the start of the trip.
The documentary and testimonial evidence presented at the trial,
however, established that Fatima indeed boarded petitioner’s De
Luxe Bus No. 5 in the evening of August 31, 1984, and she brought
three pieces of luggage with her, as testified by her brother Raul,[2]
who helped her pack her things and load them on said bus. One of
the bags was even recovered with the help of a Philtranco bus driver.
In its letter dated October 1, 1984, petitioner tacitly admitted its
liability by apologizing to respondents and assuring them that
efforts were being made to recover the lost items.

The records also reveal that respondents went to great lengths just
to salvage their loss. The incident was reported to the police, the
NBI, and the regional and head offices of petitioner. Marisol even
sought the assistance of Philtranco bus drivers and the radio
stations. To expedite the replacement of her mother’s lost U.S.
immigration documents, Fatima also had to execute an affidavit of
loss.[3] Clearly, they would not have gone through all that trouble
in pursuit of a fancied loss.

Petitioner’s receipt of Fatima’s personal luggage having been thus

established, it must now be determined if, as a common carrier, it
is responsible for their loss. Under the Civil Code, “(c)ommon
carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence in the vigilance
over the goods x x x transported by them,”[6] and this liability “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 for
transportation until the same are delivered, actually or
constructively, by the carrier to x x x the person who has a right to
receive them,”[7] unless the loss is due to any of the excepted causes
under Article 1734 thereof.[8]

The cause of the loss in the case at bar was petitioner’s negligence
in not ensuring that the doors of the baggage compartment of its
bus were securely fastened. As a result of this lack of care, almost
all of the luggage was lost, to the prejudice of the paying passengers.
As the Court of Appeals correctly observed:

x x x. Where the common carrier accepted its

passenger’s baggage for transportation and even had
it placed in the vehicle by its own employee, its failure
to collect the freight charge is the common carrier’s own
lookout. It is responsible for the consequent loss of the
 baggage. In the instant case, defendant appellant’s
employee even helped Fatima Minerva Fortades and
her brother load the luggages/baggages in the bus’
baggage compartment, without asking that they be
weighed, declared, receipted or paid for (TSN, August
4, 1986, pp. 29, 34, 54, 57, 70; December 23, 1987, p.
35). Neither was this required of the other passengers
(TSN, August 4, 1986, p. 104; February 5, 1988, p.
13).”

III. SAFETY OF PASSENGERS

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. (Art. 1755, NCC)

Who are not considered passengers (W-A-M-U)

1. One who has boarded a Wrong vehicle, has been properly

informed of such fact, and on alighting, is injured by the
carrier.

2. Invited guests and Accommodation passengers.

3. 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.

4. One who remains on a carrier for an Unreasonable length

of time after he has been afforded every safe opportunity to
alight. The carrier is thus NOT obliged to exercise
extraordinary diligence but only ordinary diligence in these
instances.

Assumption of risk on the part of passengers

Passengers must take such risks incident to the mode of

travel. The passenger must observe the diligence of a good
father of a family to avoid injury to himself. (Art. 1761, NCC)

Carriers are not insurers of any and all risks to passengers

and goods. It merely undertakes to perform certain duties to
the public as the law imposes and holds itself liable for any
breach thereof. (Pilapil v. CA, G.R. No. 52159, 22 Dec. 1989)

Q: Wisconsin Transportation Co., Inc. (WTC) owned and

operated an inter-island deluxe bus service plying the Manila-
Batangas-Mindoro route. Three friends, namely: Aurelio,
Jerome and Florencio rode on the same WTC bus from Manila
bound for Mindoro. Aurelio purchased a ticket for himself.
Jerome, being a boyhood friend of the bus driver, was allowed
a free ride by agreeing to sit during the trip on a stool placed
in the aisle. Florencio, already penniless after spending all his
money on beer the night before, just stole a ride in the bus by
hiding in the on-board toilet of the bus. During the trip, the bus
collided with another bus coming from the opposite direction.
The three friends all suffered serious physical injuries. What
are WTC's liabilities, if any, in favor of Aurelio, Jerome and
Florencio? Explain your answer. (2017 BAR)

A: As a common carrier, WTC is liable to Aurelio for breach of

contract of carriage, the latter being a passenger who purchased a
ticket for himself. WTC is also liable to Jerome for breach of contract
of carriage because he was a passenger although he was being
transported gratuitously. However, WTC has no liability in favor of
Florencio for breach of contract of carriage. A stowaway like
Florencio, who secures passage by fraud, is not considered as a
passenger.

NOTE: As accommodation passengers or invited guests, defendant

as owner and driver of the pick- up owes to them merely the duty
to exercise reasonable care so that they may be transported safely
to their destination. The rule is established by the weight of
authority that the owner or operator of an automobile owes the duty
to an invited guest to exercise reasonable care in its operation, and
not unreasonably to expose him to danger and injury by increasing
the hazard of travel. (Articles 1755 and 1756, NCC, Lara v. Valencia,
G.R. No. L- 9907, 30 June 1958)

Duration of Liability

Observance of extraordinary diligence in transportation of

goods commences from the moment the person who
purchases the ticket from the carrier presents himself at the
proper place and in a proper manner to be transported and
continues until the passenger has been landed at the port of
destination and has left the vessel owner’s dock or premises.

Waiting for Carrier or Boarding of Carrier

A proper person whom the carrier would be bound to accept

who enters upon the carrier’s premises such as a station,
ticket office, or waiting room, with the intention of becoming
a passenger, will ordinarily be viewed as assuming the status
of a passenger. (LRTA v. Navidad, G.R. No. 145804, 06 Feb.
2003, citing 10 Am. Jur. 30)

Trains

The carrier is supposed to exercise extraordinary diligence

although the passenger is still waiting for a coach on the
platform of the train station. (LRTA v. Navidad, G.R. No.
145804, 06 Feb. 2003)

However, 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. (Del Prado v.
Manila Electric Co., G.R. No. L-29462, 7 Mar. 1929)
Q: City Railways, Inc. (CRI) provides train service, for a fee, to
commuters from Manila to Calamba, Laguna. Commuters are
required to purchase tickets and then proceed to designated
loading and unloading facilities to board the train. Ricardo
Santos purchased the ticket for Calamba and entered the
station. While waiting, he had an altercation with the security
guard of CRI leading to a fistfight. Ricardo Santos fell on the
railway just as a train was entering the station. Ricardo Santos
was run over by the train. He died. CRI contented that the
mishap occurred before Ricardo Santos boarded the train and
that it was not guilty of negligence. Decide. (2008 BAR)

A: The contention of CRI must fail. The duty of a common carrier to

provide safety to its passengers is 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.
Furthermore, the common carrier will still be liable even though its
employees acted beyond the scope of their work. (LRTA vs. Navidad,
G.R. No. 145804, 6 Feb. 2003)

Q: P, a salesgirl in a flower shop at the Ayala Station of the MRT

bought two (2) tokens or tickets, one for her ride to work and
another for her ride home. She got to her flower shop where
she usually worked. While P was attending to her duties at the
flower shop, two (2) crews of the MRT got into a fight near the
flower shop, causing injuries to P in the process. Can P sue the
MRT for contractual breach as she was within the MRT
premises where she would shortly take her ride home? (2011
BAR)

A: NO. P had no intention to board an MRT train coach when the

incident occurred.

• Pilapil vs. CA (G.R. No. 52159, Dec. 22, 1989)

Common carriers are required to observe extraordinary diligence

for the safety of the passengers transported by them according to
all the circumstances of each case. In case of death of or injuries to
passengers, the law presumes them to be at fault or to have acted
negligently. Such being the case, however, they are not insurers of
the absolute safety of their passengers against any and all risks.
They merely undertake to perform certain duties to the public as
the law imposes and hold themselves liable for any breach thereof.
It must be noted that Article 1755 of the Civil Code qualifies the
duty of extraordinary care to only such as human care and foresight
can provide.

Moreover, Article 1756 of the Civil Code, in creating a presumption

of fault or negligence on the part of the common carrier, merely
relieves the victim, for the time being, from introducing evidence to
fasten the negligence on the carrier. The latter may rebut the same
by presenting proof that it had exercised extraordinary diligence as
required by law or that the injury suffered by the passenger was
solely due to a fortuitous event.

In the case at bar, Pilapil contends that the respondent failed to

rebut the presumption of negligence against it. The Court does not
agree. First, the injury sustained by Pilapil was in no way due to
any defect in the means of transport or to the negligent or willful
acts of the respondent's employees since it arose wholly from causes
created by strangers over which the respondent had no control or
even knowledge. As such, the presumption is rebutted and the
carrier is not to be held liable. To rule otherwise would make a
common carrier the insurer of the absolute safety of its passengers
which is not the intention of the lawmakers. Second, while as a
general rule, common carriers are bound to exercise extraordinary
diligence, it would seem that this is not the standard by which its
liability is to be determined when intervening acts of strangers is
the direct cause of the injury. Article 1763 governs. It provides:

Article 1763. A common carrier is responsible for injuries

suffered by a passenger on account of the wilful acts or negligence
of other passengers or of strangers, if the common carrier's
employees through the exercise of the diligence of a good father of
a family could have prevented or stopped the act or omission.

Under the above provision, a tort committed by a stranger which

causes injury to a passenger does not accord the latter a cause of
action against the carrier. The negligence for which a common
carrier is held responsible is the negligent omission by the carrier's
employees to prevent the tort from being committed when the same
could have been foreseen and prevented by them. Furthermore, it
must be noted that, the degree of care essential to be exercised by
the common carrier in cases like this is only that of a good father of
a family.

Land Transportation

The act of the driver in stopping their conveyances is a

continuous offer to riders (continuing offer rule). The
passenger is deemed to be accepting the offer if he is already
attempting to board the conveyances and the contract of
carriage is perfected from that point.

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. (Dangwa Transportation
Co., Inc. vs. CA, G.R. No. 95582, 07 Oct. 1991)

Q: A bus of GL Transit on its way to Davao stopped to enable a

passenger to alight. At that moment, Santiago who had been
waiting for a ride, boarded the bus. However, the bus driver
failed to notice Santiago who was still standing on the bus
platform and stepped on the accelerator. Because of the sudden
motion, Santiago slipped and fell down suffering serious
injuries. Is GL Transit liable? (1996 BAR)

A: YES. Santiago may hold GL Transit liable for breach of contract

of carriage. It was the duty of the driver, when he stopped the bus,
to do no act that would have the effect of increasing the peril to a
passenger such as Santiago while he was attempting to board the
same. When a 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 to stop
their conveyances while they are doing so. Santiago, by stepping
and standing on the platform of the bus is already considered as a
passenger and is entitled to all the rights and protection pertaining
to a contract of carriage. (Dangwa Transportation Co., Inc. v. CA,
supra)

When a Public Utility Vehicle is not in motion, it is not

necessary for a person who wants to ride the same to signal his
intention to board

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. Hence, it becomes the duty
of the driver and the conductor, every time the bus stops, to
do no act that would have the effect of increasing the peril to
a passenger while he was attempting to board the same. The
premature acceleration of the bus in this case was a breach
of such duty.

A person, by 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. Hence, it has been held that the duty which the
carrier owes to its patrons extends to persons boarding cars
as well as to those alighting therefrom. (Dangwa
Transportation Co., Inc. vs. CA, supra)

Liability for death or injury to passengers upon Arrival at

Destination

Once created, the relationship will not ordinarily terminate

until the passenger has, after reaching his destination, safely
alighted from the carrier's conveyance or had a reasonable
opportunity to leave the carrier's premises. All persons who
remain on the premises a reasonable time after leaving the
conveyance are to be deemed passengers, and what is a
reasonable time or a reasonable delay within this rule is to
be determined from all the circumstances, and includes a
reasonable time to see after his baggage and prepare for his
departure. (La Mallorca v. CA, G.R. No. L-21486, 14 May
1966)

Carrier-passenger relationship continues until the passenger

has been landed at the port of destination and has left the
vessel-owner’s premises. The victim’s presence in a vessel
after one (1) hour from his disembarkation is not enough in
order to absolve the carrier from liability in his death. (Aboitiz
Shipping Corporation v. CA, G.R. No. 84458, 06 Nov. 1989)

Q: Robert De Alban and his family rode a bus owned by Joeben

Bus Company. Upon reaching their desired destination, they
alighted from the bus, but Robert returned to get their baggage.
However, his youngest daughter followed him without his
knowledge. When he stepped into the bus again, the bus
accelerated that resulting to Robert’s daughter death. The bus
ran over her. Is the bus company liable?

A: YES. The relation of carrier and passenger does not cease at the
moment the passenger alights from the carrier’s vehicle at a place
selected by the carrier at the point of destination but continues until
the passenger has had a reasonable time or reasonable opportunity
to leave the carrier’s premises. (La Mallorca v. CA, G.R. No. L-20761,
27 July 1966)

• Dangwa vs. CA (G.R. No. 95582, Oct. 07, 1991)

Common carriers, from the nature of their business and reasons of

public policy, are bound to observe extraordinary diligence for the
safety of their passengers according to all the circumstances of each
case. As such, 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 for any damages. Any
injury that might be suffered by a passenger is right away
attributable to its fault or negligence. It is incumbent upon the
carrier to prove that it has exercised extraordinary diligence.
This is an exception to the general rule that negligence must be
proved.

Pedrito, by stepping and standing on the platform of the bus, is

already considered a passenger and is thus entitled all the rights
and protection pertaining to their contractual relation. The duty
which the carrier owes to its patrons extends to persons boarding
cars as well as to those alighting therefrom.

The contention of Dangwa Transportation that the driver and the

conductor had no knowledge that Pedrito would ride on the bus
since the latter had 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. Hence, it is the duty of the
driver and the conductor, every time the bus stops, to do no act that
would have the effect of increasing the peril to a passenger while he
was attempting to board the same.

• Aboitiz Shipping Corporation vs. CA (G.R. No. 84458,

Nov. 06, 1989)

It is of common knowledge that, by the very nature of the business

of a shipper, the passengers of vessels are allotted a longer period
of time to disembark from the ship than the passengers of other
common carriers considering the bulk of cargoes and the
number of passengers it can load. Consequently, such passenger
will need at least an hour to disembark from the vessel and claim
his baggage.

In the case at bar, when the accident occurred, the victim was in
the act of unloading his cargoes which he had every right to do. As
such, even if he had already disembarked an hour earlier, his
presence in the carrier’s premises was not without cause. The victim
had to claim his baggage which was possible only 1 hour after the
vessel arrived. It was admitted that it is Aboitiz’s standard
procedure that the unloading operations shall start only at such
time. Consequently, Anacleto is still deemed a passenger of said
carrier at the time of his tragic death. It must further be noted that
a carrier is duty bound not only to bring its passengers safely to
their destination but also to afford them a reasonable time to claim
their baggage.

• La Mallorca vs. CA (G.R. No. L-20761, Jul. 27, 1966)

The relation of a carrier and a passenger does not cease at the

moment the passenger alights from the vehicle at a place selected
by the former at the point of destination. It continues until the
passenger had a reasonable time or opportunity to leave the
carrier’s premises. What is a reasonable time is to be determined
from all the circumstances of the case.

In the present case, it cannot be concluded that the carrier

exercised the utmost diligence of a very cautious person required
by Article 1755 of the Civil Code. The driver, although stopping the
bus, did not put off the engine. He also started to run the bus even
before the conductor gave him the signal to go and while the latter
was still unloading some of the baggages of the passengers. It must
be noted that the presence of Mariano and Raquel near the bus was
not unreasonable and they are, therefore, to be considered still
as passengers who entitled to the protection under their contract of
carriage. Considering the foregoing, La Mallorca should be held
liable for breach of contract of carriage.

Inspection

• Nocum vs. Laguna Tayabas Bus Company (G.R. No. L-

23733, Oct. 31, 1969)

In overland transportation, the common carrier is not bound nor

empowered to make an examination on the contents of packages or
bags, particularly those hand carried by passengers.

The registered owner of the vehicle may be held liable for

damages suffered by a third person in the course of the
operation of the vehicle.

The registered owner of a public service vehicle is responsible

for damages that may arise from consequences incident to
its operation or that may be caused to any of the passengers
therein. (Gelisan vs. Alday, G.R. No. L-30212, 30 Sept. 1987)

Extent of Liability of Common Carriers for Acts of Co-

Passengers or Strangers (1997, 2005 BAR)

A common carrier is responsible for injuries suffered by a passenger

on account of the willful acts or negligence of other passengers or
of strangers, if the carrier’s employees through the exercise of the
diligence of a good father of a family could have prevented or
stopped the act or omission. (Art. 1763, NCC)

Q: P rode a Sentinel Liner bus going to Baguio from Manila. At

a stop-over in Tarlac, the bus driver, the conductor, and the
passengers disembarked for lunch. P decided, however, to
remain in the bus, the door of which was not locked. At this
point, V, a vendor, sneaked into the bus and offered P some
refreshments. When P rudely declined, V attacked him,
resulting in P suffering from bruises and contusions. Does he
have cause to sue Sentinel Liner? (2011 BAR)

A: YES, since the carrier's crew did nothing to protect the passenger
P who remained in the bus during the stop-over.

Q: In a jeepney, Angela, a passenger, was injured because of the

flammable material brought by Antonette, another passenger.
Antonette denied her baggage to be inspected invoking her
right to privacy.

a. Should the jeepney operator be held liable for damages

b. If it were an airline company involved, would your answer be

the same? (1992 BAR)

A:

a. NO. The operator is not liable for damages. In overland

transportation, the common carrier is not bound nor empowered to
make an examination on the contents of packages or bags,
particularly those hand carried by passengers. (Nocum vs. Laguna
Tayabas Bus Company, G.R. No. L-23733, 31 Oct. 1969)

b. NO. The common carrier should be made liable. In case of air

carriers, it is unlawful to carry flammable materials in passenger
aircrafts, and airline companies may open and investigate
suspicious packages and cargoes pursuant to R.A. No. 6235.

Q: Marites, a paying bus passenger, was hit above her left eye
by a stone hurled at the bus by an unidentified bystander as
the bus was speeding through the National Highway. The bus
owner’s personnel lost no time in bringing Marites to the
provincial hospital where she was confined and treated. Marites
wants to sue the bus company for damages and seeks your
advice whether she can legally hold the bus company liable.
What will you advise her? (1994 BAR)

A: I will advise Marites that she cannot legally hold the bus
company liable if the stone throwing was entirely unforeseeable and
the carrier exercised utmost diligence. However, I will also inform
her that the burden is on the carrier to prove such exercise of due
diligence. If she decides to file a case in court, all that she will prove
is that she was a passenger and she was injured while on board the
bus. (Pilapil v. CA, G.R. No. 52159, 22 Dec. 1989)

• Gelisan vs. Alday (G.R. No. L-30212, Sept. 30, 1987)

Bienvenido Gelisan is likewise liable for being the registered owner

of the truck; Accordingly, it sentenced Bienvenido Gelisan to pay,
jointly and severally with Roberto Espiritu, Benito Alday.
The Court has invariably held in several decisions that the
registered owner of a public service vehicle is responsible for
damages that may arise from consequences incident to its operation
or that may be caused to any of the passengers therein. The
claim of the petitioner that he is not hable in view of the lease
contract executed by and between him and Roberto Espiritu
which exempts him from liability to third persons, cannot be
sustained because it appears that the lease contract, adverted to,
had not been approved by the Public Service Commission. It is
settled in our jurisprudence that if the property covered by a
franchise is transferred or leased to another without obtaining the
requisite approval, the transfer is not binding upon the public and
third persons.

• Philtranco Service Enterprises, Inc. vs. CA (G.R. No.

120553)

The liability of the registered owner of a public vehicle for damages

arising from tort is primary, direct, and joint and several or solidary
with the driver. Since the employer's liability is primary, direct and
solidary, its only recourse if the judgment for damages is satisfied
by it is to recover what it has paid from its employee who committed
the fault or negligence which gave rise to the action based on quasi-
delict.

Death of Passengers

• Briñas vs. People, (G.R. No. L-30309, Nov. 25, 1983

It is a matter of common knowledge and experience about common

carriers like trains and buses that before reaching a station or
flagstop they slow down and the conductor announces the name of
the place. It is also a matter of common experience that as the train
or bus slackens its speed, some passengers usually stand and
proceed to the nearest exit, ready to disembark as the train or bus
comes to a full stop. This is especially true of a train because
passengers feel that if the train resumes its run before they are able
to disembark, there is no way to stop it as a bus may be stopped.

It was negligence on the conductor's part to announce the next flag

stop when said stop was still a full three minutes ahead. As the
respondent Court of Appeals correctly observed, "the appellant's
announcement was premature and erroneous.

That the announcement was premature and erroneous is shown by

the fact that immediately after the train slowed down, it
unexpectedly accelerated to full speed. Petitioner-appellant failed to
show any reason why the train suddenly resumed its regular speed.
The announcement was made while the train was still in Barrio
Lagalag.

The proximate cause of the death of the victims was the premature
and erroneous announcement of petitioner' appelant Briñas. This
announcement prompted the victims to stand and proceed to the
nearest exit. Without said announcement, the victims would have
been safely seated in their respective seats when the train jerked as
it picked up speed. The connection between the premature and
erroneous announcement of petitioner-appellant and the deaths of
the victims is direct and natural, unbroken by any intervening
efficient causes.

Petitioner-appellant also argues that it was negligence per se for

Martina Bool to go to the door of the coach while the train was still
in motion and that it was this negligence that was the proximate
cause of their deaths.

We have carefully examined the records and we agree with the

respondent court that the negligence of petitioner-appellant in
prematurely and erroneously announcing the next flag stop was the
proximate cause of the deaths of Martina Bool and Emelita
Gesmundo. Any negligence of the victims was at most contributory
and does not exculpate the accused from criminal liability.

• Victory Liner vs. Gammad, (G.R. No. 159636, Nov. 25,

2004)

A common carrier is bound to carry its passengers safely as far as

human care and foresight can provide using the utmost diligence of
very cautious persons with due regard to all the circumstances. In
a contract of carriage, it is presumed that the common carrier was
at fault or was negligent when a passenger dies or is injured. Unless
the presumption is rebutted through evidence that the carrier
exercised extraordinary diligence, the court need not even make an
express finding of fault or negligence on the part of the common
carrier. In the instant case, there is no evidence to rebut the
statutory presumption that the proximate cause of Marie Grace’s
death was the negligence of petitioner. Petitioner was indeed guilty
of breach of contract of carriage.

• Heirs of Ochoa vs. G & S Transport Corporation, (GR.

170071, Mar. 09, 2011 and GR. 170125)

There is a contract of carriage between G & S and Jose Marcial.

What is clear from the records is that there existed a contract of
carriage between G & S, as the owner and operator of the Avis
taxicab, and Jose Marcial, as the passenger of said vehicle. As a
common carrier, G & S "is bound to carry [Jose Marcial] 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." However, Jose Marcial was not able to reach his
destination safely as he died during the course of the travel. "In a
contract of carriage, it is presumed that the common carrier is at
fault or is negligent when a passenger dies or is injured. In fact,
there is even no need for the court to make an express finding of
fault or negligence on the part of the common carrier. This statutory
presumption may only be overcome by evidence that the carrier
exercised extraordinary diligence."

Unfortunately, G & S miserably failed to overcome this

presumption. Both the trial court and the CA found that the
accident which led to Jose Marcial’s death was due to the reckless
driving and gross negligence of G & S’ driver, Padilla, thereby
holding G & S liable to the heirs of Jose Marcial for breach of
contract of carriage.
 IV. MONTREAL CONVENTION

Applicability

Article 1 — Scope of Application

1. This Convention applies to all international carriage of persons,

baggage or cargo performed by aircraft for reward. It applies equally
to gratuitous carriage by aircraft performed by an air transport
undertaking.

2. For the purposes of this Convention, the expression international

carriage means any carriage in which, according to the agreement
between the parties, the place of departure and the place of
destination, whether or not there be a break in the carriage or a
transhipment, are situated either within the territories of two States
Parties, or within the territory of a single State Party if there is an
agreed stopping place within the territory of another State, even if
that State is not a State Party. Carriage between two points within
the territory of a single State Party without an agreed stopping place
within the territory of another State is not international carriage for
the purposes of this Convention.

3. Carriage to be performed by several successive carriers is

deemed, for the purposes of this Convention, to be one undivided
carriage if it has been regarded by the parties as a single operation,
whether it had been agreed upon under the form of a single contract
or of a series of contracts, and it does not lose its international
character merely because one contract or a series of contracts is to
be performed entirely within the territory of the same State.

4. This Convention applies also to carriage as set out in Chapter V,

subject to the terms contained therein.

Article 17 — Death and Injury of Passengers — Damage to

Baggage

1. The carrier is liable for damage sustained in case of death or

bodily injury of a passenger upon condition only that the accident
which caused the death or injury took place on board the aircraft
or in the course of any of the operations of embarking or
disembarking.

2. The carrier is liable for damage sustained in case of destruction

or loss of, or of damage to, checked baggage upon condition only
that the event which caused the destruction, loss or damage took
place on board the aircraft or during any period within which the
checked baggage was in the charge of the carrier. However, the
carrier is not liable if and to the extent that the damage resulted
from the inherent defect, quality or vice of the baggage. In the case
of unchecked baggage, including personal items, the carrier is liable
if the damage resulted from its fault or that of its servants or agents.

3. If the carrier admits the loss of the checked baggage, or if the

checked baggage has not arrived at the expiration of twenty-one
days after the date on which it ought to have arrived, the passenger
is entitled to enforce against the carrier the rights which flow from
the contract of carriage.

4. Unless otherwise specified, in this Convention the term „baggage“

means both checked baggage and unchecked baggage.

Article 18 — Damage to Cargo

1. The carrier is liable for damage sustained in the event of the

destruction or loss of, or damage to, cargo upon condition only that
the event which caused the damage so sustained took place during
the carriage by air.

2. However, the carrier is not liable if and to the extent it proves

that the destruction, or loss of, or damage to, the cargo resulted
from one or more of the following:

(a) inherent defect, quality or vice of that cargo;

b) defective packing of that cargo performed by a person

other than the carrier or its servants or agents;

(c) an act of war or an armed conflict;

(d) an act of public authority carried out in connection with

the entry, exit or transit of the cargo.

3. The carriage by air within the meaning of paragraph 1 of this

Article comprises the period during which the cargo is in the charge
of the carrier.

4. The period of the carriage by air does not extend to any carriage
by land, by sea or by inland waterway performed outside an airport.
If, however, such carriage takes place in the performance of a
contract for carriage by air, for the purpose of loading, delivery or
transshipment, any damage is presumed, subject to proof to the
contrary, to have been the result of an event which took place
during the carriage by air. If a carrier, without the consent of the
consignor, substitutes carriage by another mode of transport for the
whole or part of a carriage intended by the agreement between the
parties to be carriage by air, such carriage by another mode of
transport is deemed to be within the period of carriage by air.

Article 19 — Delay

The carrier is liable for damage occasioned by delay in the carriage

by air of passengers, baggage or cargo. Nevertheless, the carrier
shall not be liable for damage occasioned by delay if it proves that
it and its servants and agents took all measures that could
reasonably be required to avoid the damage or that it was
impossible for it or them to take such measures.