LAWS REGULATING

TRANSPORTATION ESTABLISHMENTS
 LEARNING OBJECTIVES
•Identify the laws affecting the transportation
sector
•Identify the rights of passengers of commercial
transportation
•Explain the relevance of these laws to the
promotion of tourism in the country
 CARRIER
•A person or corporation who undertakes to
transport or convey goods or persons from one
place to another, gratuitously or for hire.
 CLASSIFICATIONS OF CARRIER
• PRIVATE / SPECIALCARRIER
One which, without making the activity a vocation, or without holding itself or
himself 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.
If one engages the services of a private carrier in particular instance then there
is an agreement established (Contract of Private Carriage) as such, the law that
governs them is the ordinary contract under the Civil Code of the Philippines.
 CLASSIFICATIONS OF CARRIER
CASE AT POINT
Regine Velasquez-Alcasid is a singer by profession, she owns two
vehicles, one Toyota Altis and the other is For Expedition. One
day, her friend Donna Cruz-Larazabal needs a car to fetch her
husband Yong Larazabal in the airport. Donna asked her friend
Regine to rent her Toyota Altis. Regine agreed provided that
Donna will have the vehicle gas up in full tank.
 CLASSIFICATIONS OF CARRIER
•COMMON / PUBLIC CARRIER
> one holding itself out to the public as
engaged in the transportation of freight or
passenger for hire.
> one who is in the business of transporting
goods or persons for hire, as a public utility.
 LAW ON COMMON CARRIERS
Art. 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.
1. Are the above mentioned a
corporation or person?
2. Do they engage in the business
of carrying or transporting
passengers or goods?
3. Do they offer their services to the
public?
4. Is it for compensation?
 CLASSIFICATIONS OF CARRIER
•COMMON / PUBLIC CARRIER
> one holding itself out to the public as
engaged in the transportation of freight or
passenger for hire.
> one who is in the business of transporting
goods or persons for hire, as a public utility.
 CLASSIFICATIONS OF CARRIER
CASE AT POINT
Morisette Amon is the assistant marketing manager of Ibon Corporation. One of
her tasks is to travel around the metro to meet clients and advertise the company
to different establishments. Satisfied by her performance, the President of the
company gave her a car for personal use. She thought of having a “sideline”.
Thus, she contacted all her friends and proposed that should they need to deliver
the goods to the nuyer, Morisette may be hired to deliver the same at a fixed cost.
Her friends agreed to the proposal. She became successful to her “sideline”
 LAW ON COMMON CARRIERS
• Engracio Fabre Jr. and his wife were owners of a 1982 model Mazda mini bus. They
used the bus principally in connection with a bus service for school children which
they operated in Manila. The couple had a driver, Porifrio Cabil whom they hired in
1981. His job was to take school children to and from St. Scholastica’s College in
Malate Manil. On November 2, 1984, the Word for the World Christian Fellowship
(WWCF) arranged with spouses Fabre for the transportation of 33 members of its
Young Adults Ministry from Manila to La Unionand back in consideration of
P3,000.00.

ARE THE SPOUSES FABRE CONSIDERED A COMMON OR PRIVATE CARRIER?

 LAW ON COMMON CARRIERS
• They are engaging in a business as a common carrier. They need not have to be engaged
in the business of public transportation for the provisions of the Civil Code on common
carriers to apply to them.
• Article 1732 makes no distinction between one whose principal business activity is the
carrying of persons or both, and one who does such carrying as an ancillary activity
(sideline)
• It carefully avoids making any distinction between a person or enterprise offering
transportation service on a regular or scheduled basis and one who is offering such
service on an occasional, episodic, or unscheduled basis
• Neither does it distinguish between a carrier offering its services to the “general public”
and one who offers services or solicits business only from a narrow segment of the
general population.
 LAW ON COMMON CARRIERS
CONTRACT OF CARRIAGE or CONTRACT OF PUBLIC TRANSPORTATION
> A contract to transport passengers is quite different in kind and degree from any
other contractual relation.
> A carrier sustains with the public and invites people to avail the comforts and
advantages it offers.
> The law requires common carriers to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons, with
due regard for all the circumstances.
> Neglect or malfeasance of the carrier’s employees naturally could give ground for
an action for damages
 RESPONSIBILITIES OF COMMON CARRIERS
(VIGILANCE OVER GOODS)
• Art. 1733. Common carriers, from the nature of their business and for reasons of public policy,
are bound to observe extraordinary diligence in the vigilance over the goods and for the safety
of the passengers transported by them, according to all the circumstances of each case.
• Art. 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 of 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.

* FIRE is NOT a fortuitous event

 RESPONSIBILITIES OF COMMON CARRIERS
(VIGILANCE OVER GOODS)

• Art. 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.
• Art. 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.
 RESPONSIBILITIES OF COMMON CARRIERS
(VIGILANCE OVER GOODS)

• Art. 1740. If the common carrier negligently incurs in delay in transporting

the goods, a natural disaster shall not free such carrier from responsibility.
• Art. 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.
• Art. 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.
 RESPONSIBILITIES OF COMMON CARRIERS
(VIGILANCE OVER GOODS)

• Art. 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.
 RESPONSIBILITIES OF COMMON CARRIERS
(VIGILANCE OVER GOODS)

• Art. 1745. Any of the following or similar stipulations shall be considered

unreasonable, unjust and contrary to public policy:
(1) That the goods are transported at the risk of the owner or shipper;
(2) That the common carrier will not be liable for any loss, destruction, or deterioration of the goods;
(3) That the common carrier need not observe any diligence in the custody of the goods;
(4) That the common carrier shall exercise a degree of diligence less than that of a good father of a family, or of a man of
ordinary prudence in the vigilance over the movables transported;
(5) That the common carrier shall not be responsible for the acts or omission of his or its employees;
(6) That the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave or irresistible
threat, violence or force, is dispensed with or diminished;
(7) That the common carrier is not responsible for the loss, destruction, or deterioration of goods on account of the
defective condition of the car, vehicle, ship, airplane or other equipment used in the contract of carriage.
 RESPONSIBILITIES OF COMMON CARRIERS
(VIGILANCE OVER GOODS)

• The observance of Extraordinary diligence by the common carrier

(carrying/transporting goods) starts from the time the goods are
unconditionally placed in the possession of, and received by the
carrier for transportation until the same is delivered to the consignee.
 RESPONSIBILITIES OF COMMON CARRIERS
(SAFETY OF PASSENGERS)

• Art. 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.

• Art. 1756. In case of death of or injuries to passengers, common

carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
diligence as prescribed in Articles 1733 and 1755.
 RESPONSIBILITIES OF COMMON CARRIERS
(SAFETY OF PASSENGERS)

• Clearly, a Common carrier is obliged to observe UTMOST DILIGENCE or

EXTRA ORDINARY DILIGENCE.
• It is also clearly stated that once a passenger sustained or suffered an
injury, or died, the common carrier is already presumed by law to be at
fault.
• In order to overcome or defeat this presumption, so as to exempt from
liability, the common carrier must prove that it exercised extraordinary
diligence in carrying or transporting the passenger or the goods.
 RESPONSIBILITIES OF COMMON CARRIERS
(SAFETY OF PASSENGERS)
• As soon as the passenger puts his foot on the platform, the obligation of the extraordinary diligence of
the common carrier begins.
• The relation of carrier and passenger does not cease at the moment the passenger alights (disembark,
step-off) 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 a reasonable opportunity to leave the
carrier’s premises.
• EXTRAORDINARY DILIGENCE is the standard of care required of common carrier in bringing safely its
passengers (and goods) from one place to another.
• In a CONTRACT OF CARRIAGE OF PASSENGERS, it is the obligation of the common carrier to bring the
passengers safely to the point of destination.
• If injured, or death occurs, the presumption of negligence automatically arises, and the common
carrier can be held liable if he fails to prove extraordinary diligence for the duration of the carriage.
 CASE AT POINT
• Fortune Express is a bus company in northern Mindanao. Diosdado Bravo, the Operations Manager of
Fortune Express received an investigation report from the Philippine Constabulary Regional
Headquarters at Cagayan de Oro City that certain Maranaos are planning to take revenge on Fortune
Express due to an accident with a jeepney in Kauswagan, Lanao del Norte, resulting in the death of 2
Maranaos. Bravo assured the Philippine Constabulary that certain precautions in protecting the lives
and properties will be made. Normal operations continued in Fortune Express without taking the
necessary precautions such as frisking the passengers or inspecting their baggage before boarding the
bus. It was until November 22, 1989, when three armed Maranaos who pretended to be passengers,
seized a bus of Fortune Express at Linamon, Lanao del Norte while on its way to Iligan city. Shots
ensued which resulted to burning of the bus, injury to passengers, and death of Atty. Caorong.

SHOULD FORTUNE EXPRESS BE HELD LIABLE FOR THE INJURY AND DEATH OF ITS PASSENGERS DUE TO
THE HIJACKING OF THREE ARMED MARANAOS?
 LIABILITIES OF COMMON CARRIERS
FOR THE ACTS OF EMPLOYEES AND STRANGERS
• Art. 1759. Common carriers are liable for the death of or injuries to
passengers through the negligence or willful acts of the former's employees,
although such employees may have acted beyond the scope of their authority
or in violation of the orders of the common carriers.

• This liability 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.
 LIABILITIES OF COMMON CARRIERS
FOR THE ACTS OF EMPLOYEES AND STRANGERS
• For a bus company, due diligence in selection of employees is not satisfied by finding
that the applicant possessed a professional driver’s license.
• The employer should also examine the applicant for his qualifications, experience, and
record of service.
• Due diligence in supervision requires the formulation of rules and regulations for the
guidance of employees and issuance of proper instructions as well as actual
implementation and monitoring of consistent compliance with the rules.
• For a shipping company , the vessel must be considered seaworthy, adequately
equipped for the voyage and manned with sufficient number of competent officers and
crew.
 LIABILITIES OF COMMON CARRIERS
FOR THE ACTS OF EMPLOYEES AND STRANGERS
• For an airline company, if a flight attendant humiliates a
passenger while on flight, the common carrier who is the
employer of the said flight attendant is liable for the latter’s
act.
• In the same manner, if the driver of a tour bus while on duty
committed robbery against a tourist, the tour bus operator is
liable thereof.
 LIABILITIES OF COMMON CARRIERS
FOR THE ACTS OF EMPLOYEES AND STRANGERS
ENFORCEMENT OFLIABILITY OF COMMON CARRIERS
In case of death or injury caused to passengers, the victim may file a case of breach of
contract of carriage or culpa contractual against the owner of the common carrier.
In case of death or injury caused to a stranger or pedestrian, the victim may file a
criminal complaint against the driver of the common carrier for reckless imprudence
resulting in homicide and damage to property. The victim may also file a suit against the
common carrier and its driver on the ground of culpa-aquiliana or quasi-delict

QUASI DELICT, civil law. An act whereby a person, without malice, but by fault, negligence or
imprudence not legally excusable, causes injury to another. .
 LIABILITIES OF COMMON CARRIERS
FOR THE ACTS OF EMPLOYEES AND STRANGERS
DAMAGES RECOVERABLE FROM COMMON CARRIERS
In an action based on culpa contractual or culpa aquiliana, the damages that are recoverable are as
follows:
Actual damages – consist in expenses for medicine, hospitalization, etc.
 Unrealized profits – compensatory damages which shall be fixed by determining the net yearly
income of the injured or deceased passenger and multiplying the same by the number of years that
he was expected to live or lead a gainful existence as determined by mortality tables of life
insurance companies of the Philippines.
Moral Damages – may be awarded when the mishap resulted in the death of a passenger, or when
the heirs of the deceased suffered mental anguish, or when the carrier was guilty of fraud, or bad
faith, even if death did not result. The big amount of damages will be awarded in view of the
importance of the person of the passenger.
 LIABILITIES OF COMMON CARRIERS
FOR THE ACTS OF EMPLOYEES AND STRANGERS
DAMAGES RECOVERABLE FROM COMMON CARRIERS
In an action based on culpa contractual or culpa aquiliana, the damages that are recoverable are as
follows:
Exemplary Damages – or corrective damages are awarded by way of example or correction of the
public good , or when the common carrier acted in wanton, reckless and oppressive manner.
Award for death indemnity - in accordance to with the current rulings of the court.
Award for Attorney’s fees - may be recovered when exemplary damages ae awarded. Under Article
2008 of the Civil Code, attorney’s fees may be recovered when exemplary damages are awarded.
In case moral damages – cannot be awarded without proof of the carrier’s bad faith, ill will, malice
or wanton conduct, nominal damages may be allowed under the circumstances.