Article 1732 of the Civil Code

Common Carriers are persons, corporations, firms or associations engaged in the business
of c a r r y i n g o r t r a n s p o r t i n g p a s s e n g e r s o r g o o d s o r b o t h , b y l a n d , w a t e r o r
a i r, f o r c o m p e n s a t i o n , offering their services to the public.
Contracts of carriage are governed primarily by the Civil Code, then in a suppletory manner, by
the provisions of the Code of Commerce on Maritime Commerce, the COGSA
(Carriage of Goods by Sea Act), and the Salvage Law.
For someone to be considered a common carrier, it is not required that it
s h o u l d b e h i s principal business. Even if that is what is known as his sideline, he is still a
common carrier.
De Guzman vs. CA (168 SCRA 612)
T h e l a w d e f i n i n g a c o m m o n c a r r i e r m a k e s n o d i s t i n c t i o n w h e t h e r t h e
c a r r i a g e o f g o o d s o r persons is the principal or merely ancillary activity of the carrier.
T h e f a c t t h a t t h e r e i s n o f i x e d o r r e g u l a r s c h e d u l e i n t r a n s p o r t i n g g o o d s
f o r o t h e r s d o e s n o t distract from the fact that he is a common carrier.
A school bus service is a Common Carrier and although it does not cater
t o t h e g e n e r a l public, but to a limited clientele, and the school bus was hired for a special
trip to the province, court said that it is still a common carrier although it usually caters
only to a limited segment of society and that the trip to the province was not a regular trip
but an unscheduled and special trip.
The fact that the Common Carrier does not have a certificate of public convenience does not
distract from the fact that it is a common carrier (although operating illegally). Otherwise, it
would be better off than a company that is operating legally.
First Philippine Industrial Pipeline vs. CA (300 SCRA 661)
A company which transports petroleum products from a refinery to a terminal by
means of a pipeline is a common carrier because it is transporting goods.
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 the safety of the passengers transported by them, according to all the
circumstances of each case.
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:
For the common carrier to be exempt from liability, these must be the only cause of the loss.
There must be no concurring negligence on the part of the common carrier.

The law requires that before, during and after the loss, the common
c a r r i e r m u s t h a v e exercised extraordinary diligence to try to prevent or minimize the loss.
(1) Flood, storm, earthquake, lightning or other natural disaster or
calamity;
If there was delay, common carrier cannot invoke fortuitous event to be exempt.
Where the captain departed although there was already a warning from PAGASA
that there was a strong typhoon brewing, the vessel sank, cargoes were lost. They
cannot invoke that as an excuse because there was concurring negligence. They should not
have left port.
Where the coils of wire the vessel was transporting became wet because of
t h e r a i n a n d became rusty. The court said that it is not due to a fortuitous event
because the rain would not have reached the coils if the hatches were properly closed. So
there was concurring negligence.
Fire
As a rule, fire is not a fortuitous event because it is always traceable to human negligence.
Exception would be if it was cause by lightning.
( 2 ) A c t o f p u b l i c e n e m y d u r i n g w a r, w h e t h e r i n t e r n a t i o n a l o r
civil;
Under international law, merchant vessels can be seized as prices of war during war.
(3)Act or omission of the shipper or owner of the goods;
For example, if he planted a bomb with the goods he was shipping.
(4)The character of the goods or defects in the packing or in
the containers;
Fruits cannot be prevented from becoming ripe during the course of the voyage,
natural process.
Southern Lines vs. CA (4 SCRA 159)
If the fact of improper packing is known to the carrier, or apparent upon ordinary
observation, but it accepts the goods notwithstanding such condition, it is not
relieved of liability for loss or injury.
(5)Order or act of competent public authority.
Ganzon vs. CA (161 SCRA 646)
The order must be a valid order, not an illegal order. One cannot invoke that as a valid excuse.

Collision
If there is a collision, its exclusively the fault of another vessel, of course the other vessel will be
excused from liability. But if there is concurring negligence, that will not exempt the carrier from
liability.
For example, a vessel collided with a tanker when they should have had a lookout at
night, and then the person in charge of the vessel was unskilled, and when it became
apparent that a collision might occur, the vessel steered to the left, when under the
rules of navigation, it should steer to the right, so they collided.
Or when a vessel saw that a collision might occur but it took evasive action too late or started
taking evasive action when collision was already imminent.
The fault of the owner will only minimize the liability of the shipping company but
will not exempt it from liability.
Armed Robbery
In the de Guzman case, a stipulation providing that a common carrier will not be
liable for acts committed by robbers who act without irresistible force would not be valid.
A carrier cannot be exempt from liability if it fails to show that the
r o b b e r s a c t e d w i t h irresistible force.
Article 1735. In all cases other than those mentioned in [1734], if the goods are
lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to
have a c t e d n e g l i g e n t l y, u n l e s s t h e y p r o v e t h a t t h e y o b s e r v e d
e x t r a o r d i n a r y d i l i g e n c e a s required in article 1733.
Mechanical failure is not a fortuitous event.
Crack in the steering knuckle
Tires exploded
Defect in the brakes
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.
Notice of the arrival and the consignee fails to claim the goods after the laps of a reasonable
period, there will be constructive delivery.
I f t h e c o n s i g n e e s t i l l f a i l s t o t a k e d e l i v e r y, f r o m t h a t p o i n t o n , t h e
contract between the c a r r i e r a n d t h e c o n s i g n e e w i l l n o l o n g e r b e a
c o n t r a c t o f c a r r i a g e b u t a c o n t r a c t o f d e p o s i t . Therefore, the carrier is

no longer required to exercise extraordinary diligence, but only the due diligence of a
good father of a family.
Article 1737. Even if the goods are temporarily unloaded or stored while in
transit, the duty of the common carrier to exercise extraordinary diligence subsists.
For example, they are transferring the goods to another vessel and the
vessel develops mechanical trouble, it could not continue. So meanwhile,
t h e l o o k f o r a n o t h e r v e s s e l . T h e y unloaded the goods. While in the warehouse,
under the law, liability to exercise extraordinary diligence remains.
Article 1740. If the common carrier negligently incurs in delay in transporting the goods, a
natural disaster shall not free such carrier from responsibility.
Although bills of lading provided that they did not guarantee to deliver
t h e g o o d s a t a n y particular date, court said, that has to be given a reasonable
interpretation. That should not be interpreted that you can deliver the goods even
beyond what is a reasonable period. A delay of 2months and 7 days I not reasonable.
Common carrier cannot invoke fortuitous event to escape liability.
Article 1744. A stipulation limiting the liability of the common carrier would be valid if:
( 1 ) i n w r i t i n g
(2) supported by valuable consideration;
( 3 ) r e a s o n a b l e , j u s t a n d n o t c o n t r a r y t o p u b l i c p o l i c y.
Article 1745. The following or similar stipulations shall be considered
unreasonable, unjust and contrary to public policy (void) :
(1)That the goods are transported at the risk of the shipper or owner of the
goods;
(2)That the common carrier will not be liable for any
l o s s , d e s t r u c t i o n o r deterioration of the goods;
(3)That the common carrier need not observe any diligence in the
c u s t o d y o f t h e goods (at all);
(4)That the common carrier need not observe any diligence less than that of a
good father of a family;
(5)That the common carrier shall not be responsible for the acts or omissions of
his employees;
(6)That the common carriers liability for acts committed by thieves or
r o b b e r s w h o do not act with grave and irresistible force, threat or violence is dispensed
with or diminished;
(7)That the common carrier is not responsible for the
l o s s , d e s t r u c t i o n o r deterioration of the goods on account of the
d e f e c t i v e c o n d i t i o n o f t h e c a r, vehicle, hip, airplane or other equipment used in the
contract of carriage.

A provision saying that the carrier is not liable for loss is void. A
p r o v i s i o n l i m i t i n g t h e liability to a fixed amount is also void. But, a provision limiting the
liability to a certain fixed amount unless the shipper declared a higher value and pays the
corresponding freight for that higher value would b reasonable.
Provisions limiting the liability of the carrier cannot be invoked if the carrier incurs
in delay. Unless, the delay is due to the fault of the government or of 3 rd persons,
beyond the control of the carrier.
Article 1753. The law of the country to which the goods are to be transported
should govern the liability of the common carrier for their loss, destruction or
deterioration.
Law of the destination governs under conflicts of law.
Article 1754. In the case of baggage of passengers, if they are in the personal custody of the
passenger, then liability of the common carrier will be that of a bailee/depositary.
For example, hand carried baggage of a passenger. The common carrier is required
only to observe the due diligence of a good father of a family. BUT, for check-in
luggage, the carrier will have to exercise extraordinary diligence.
Article 1755. Common carriers are required to observe extraordinary diligence
for the safety of their passengers.
Article 1756. In the case of death or injury to passengers, it is presumed that the carrier is
at fault, unless they prove thy exercised extraordinary diligence.
The liability of the common carrier will begin from the time the passenger places
his foot upon the carrier.
The act of boarding represents a perfected contract of carriage.
The contract will not be terminated upon arrival at the destination until the
passenger has had reasonable opportunity to leave the premises.
The carrier is not an insurer of the safety of the passengers. If the death or injury
was due to a cause beyond the control of the carrier, it will not be liable to the passenger.
However, it must d o e v e r y t h i n g i n i t s p o w e r t o t r y t o p r e v e n t a n y p a s s e n g e r s
f r o m g e t t i n g h u r t . I t m u s t t a k e precautionary measures.
If there is a collision with another bus company, and they were both at fault, both will still be
liable. They cannot invoke the Last Clear chance rule. The rule is only for determining who will
bear the loss as between the two. Since the carriers are both at fault, it will not apply. But, with
respect to passengers, each will be liable for their own.

If the bus was speeding, a passenger was injured, the bus company will be liable. But if the
passenger is guilty of contributory negligence, then that will minimize,
b u t w i l l n o t e x e m p t t h e liability of the carrier.
Article 1758. If the passenger is carried gratuitously, the liability of the common carrier
may be limited by stipulation to only due diligence of a good father of a family.
BUT, it cannot exempt it from gross negligence.
Pleasantville Development Corp. vs. CA (253[?] SCRA 10)
A stipulation exempting a party from negligence is void because it is against public policy.
LIABILITIES OF COMMON CARRIERS Article 1759 of the New Civil Code reads:
Common carriers are liable for the death of or injuries to passengers through
the negligence or willful acts of the formers employees, although such employees may
have a c t e d b e y o n d t h e s c o p e o f t h e i r a u t h o r i t y o r i n v i o l a t i o n o f t h e
o r d e r s o f t h e c o m m o n carriers. This liability of the common carriers does not cease
upon proof that they exercised a l l t h e d i l i g e n c e o f a g o o d f a t h e r o f a f a m i l y i n
t h e s e l e c t i o n a n d s u p e r v i s i o n o f i t s employees.
In other words, if a taxi driver holds up and kills passengers, operator will be liable.
The l i a b i l i t y w i l l s u b s i s t , a n d t h e c o m m o n c a r r i e r c a n n o t r a i s e t h e d e f e n s e
of due diligence in the selection and supervision of its employees.
L i a b i l i t y i s b a s e d o n c o n t r a c t , a n d d i l i g e n c e i n t h e selection is a defense for
quasi-delict, not for breach of contract.
Article 1763. A common carrier is responsible for injuries suffered by a
passenger on a c c o u n t o f t h e w i l l f u l a c t s o r n e g l i g e n c e o f o t h e r
p a s s e n g e r s o r o f s t r a n g e r s , i f t h e common carriers employees through the
exercise of the diligence of a good father of a family could have prevented or stopped
the act or omission.
Bachelor Express case
A particular bus did not have any doors. One of the passengers ran
a m u c k a n d s t a r t e d assaulting other passengers. So the passengers panicked and tried to get
off the bus. Some jumped off the bus and were injured. The driver just kept on driving and did
not stop.
Held: Bachelor Express is liable for damages. It was negligent. Bus did not have doors, and
driver did not even bother to stop.
The liability for damages is defined by the New Civil Code. First of all, in case of
Death, minimum liability is P50,000 and then, actual damages can be recovered like funeral
expenses and hospitalization expenses if hospitalized before death.
If you have lost income, the formula being used here is 80 minus age, multiplied by annual
income, and you get 2/3 of that. In other words, the formula is:
2/3 [(80-age) x annual income]

Now, you have that Padilla case. A plane of PAL crashed. In the case of
Davila vs. PAL, the C o u r t r u l e d t h a t i t w a s t h e f a u l t o f PAL . PAL w a s c l a i m i n g
t h a t t h e r e w e r e d i s t u r b a n c e s i n t h e weather, etc. But the Court did not accept that. So
the Supreme Court said that in the Davila case, PAL was at fault. After that case was
decided, this Padilla case was litigated. Padilla was another passenger there. He was a
chance passenger but was accommodated because the regular passengers did not show up.
Padilla was hurrying to return to Manila for his wedding. He perished in that plane crash (female
classmates instantly reacted, awww!). So his widowed mom sued for damages. I handled the
case for PAL in the Court of Appeals, and argued that since SC already ruled in
Davila case that PAL was at fault, then the only issue is the extent of PALs liability.
So I tried to reduce t h e l i a b i l i t y o f PAL . I c i t e d s o m e c a s e s t h a t i n
c o m p u t i n g t h e i n c o m e , y o u s h o u l d u s e t h e l i f e e x p e c t a n c y o f t h e m o t h e r.
B e c a u s e e v e n i f t h e s o n h a d n o t d i e d , t h e m o t h e r w o u l d n o t h a v e received the
income of the son until the death of the son, because the mother could have died ahead o f t h e
son, because in the normal course of events, the mother would die ahead
o f h e r s o n . Therefore, she could not have received the income of her son after her death. So
you only compute h e r l i f e e x p e c t a n c y. T h e C A r u l e d i n f a v o r o f t h e m o t h e r.
O n a p p e a l , t h e S C r e j e c t e d t h a t argument. The SC said that the life expectancy of the
son should be used as the basis even if the life expectancy of the mother is shorter.
Moral damages
The Court has said that moral damages can be recovered in case of death.
T h e c o u r t recently ruled that you dont have to prove mental anguish. In previous
cases, the court said that m o r a l d a m a g e s c a n t b e r e c o v e r e d i n c a s e s o f d e a t h
b e c a u s e n o b o d y t e s t i f i e d . B u t i n a r e c e n t decision, the Court said that mental
anguish need not be proven, because it is presumed.
Also, under the Civil Code, as a rule, you can recover moral damages for
the breach of c o n t r a c t o n l y i f t h e r e i s d e a t h o r b a d f a i t h . T h e C o u r t
h a s a p p l i e d t h a t t o g r o s s n e g l i g e n c e amounting to bad faith. Theres this
one case where the bus was speeding, and the passengers were already asking the
driver to slow down, but he just ignored them. The Court said that it was gross
negligence amounting to bad faith.
Attorneys fees
T h i s c a n b e r e c o v e r e d i n a n y o f t h e c a s e s u n d e r Ar t i c l e 2 2 0 8 o f t h e C i v i l
C o d e , l i k e i f t h e carrier acted in bad faith in refusing to settle with the heirs of the
passengers who died.
PAL case # 1
PAL w a s f l y i n g t o O z a m i s C i t y, b u t i t w a s n o t a b l e t o p r o c e e d b e c a u s e o f
t h e i n c l e m e n t weather. So they went to Cotabato. A passenger sued. He said that
he was not provided with transportation from airport to hotel, and was not given any hotel
accommodation and meals.
Held: The contract of carriage is not terminated until the passenger reaches its destination.

So in this case, the contract of carriage was only temporarily suspended,

s o PAL s h o u l d h a v e provided the passenger with hotel accommodation and meals, etc.
JAL case
JAL could not proceed to Manila because Mt. Pinatubo erupted and the runway was
covered with ash. Passenger sued, and said that he was not provided with hotel accommodation
and meals. He invoked the ruling in PAL.
Held: The delay was due to fortuitous event. It was not due to the fault of JAL, and they are not
obliged to provide for hotel accommodation.
PAL case # 2
I n a s u b s e q u e n t c a s e i n v o l v i n g a n o t h e r p a s s e n g e r i n t h a t s u s p e n d e d PAL
f l i g h t t o O z a m i s , a passenger was invoking the ruling in PAL case # 1. But the
Court backtracked and said that its ruling in the PAL case # 1 was misunderstood.
The reason why PAL was held liable was because there was discrimination. They
provided other passengers with the hotel accommodation, so it was because of discrimination.
So the PRESENT RULE: if the flight is interrupted due to fortuitous event, the airline company
is not obliged to provide hotel accommodation and meals. But if it is due to their fault, like
engine trouble, they have to provide accommodation. Usually, may mga tie-up na
naman yang mga hotel na yan.Like PAL, thats why I never take PAL (Jacks story about
how bad PAL is omitted).
Airline cases
Cuenca case
Cuenca was going to Japan. He was downgraded from 1 st class to economy. He sued
for damages, and the Court held Northwest Airlines liable.
Air France v. Carrascoso
Carrascoso (C) was taking the flight of Air France, 1st class. When he arrived in Bangkok, he
was told to give up his seat for a white man, and to transfer to Economy. C said,
Over my dead body. There was a heated argument. But C eventually transferred to
Economy, but later on sued for damages.
Held: Common carrier is not only obliged to transport its passengers
s a f e l y, b u t a l s o courteously. Therefore, C can sue for tort. Because when you sue
for breach of contract, you can recover moral damages only if there is death or bad
faith/ fraud. But if you are suing on tort, you can always recover moral damages.
Caguioa criticizes this doctrine. He said that that is true in common law. We follow Civil Law.
Under the Civil Code, for a quasi-delict to exist, there must be no contractual
relation. Theres a recent decision of Justice Pardo where he said that if theres a contract, you
cant have a quasi-delict by express provision of law although the case did not
involve a contract of carriage. But he said that in a recent decision.

Zulueta case
His wife and daughter were returning from US to Philippines. At that time, wala
pang non-stop flights. When the plane had a stop-over at a certain island, Zulueta
said that he had an upset stomach, but the lavatories were occupied. So he went to the beach
(female classmates react again, yuuuck!). When the flight was about to resume the
flight, he was not yet there. So the plane waited for him, because once you checked
in your luggage and you dont return, the plane will not leave you. There might be a
reason why you are not therethere might be a bomb in your luggage. They will have to
either wait for you or unload all the luggage and leave yours behind. So they sent
employees to look for Zulueta. The employees saw Zulueta strolling in the beach, so
they brought him back to the plane. The pilot ordered the search of his luggage. Zulueta refused,
unless theres a search warrant. So the pilot left the luggage behind.
Zulueta sued for damages. He claimed that the pilot shouted at him. Pilot said that
they received a tip that there was a bomb, so they suspected Zulueta who was
reluctant to board the plane.
Held: Awarded moral and exemplary damages. He was insulted. There was humiliation.
Cathay Pacific case
Passenger was going to Jakarta. Suitcase was sent to HK. He asked for help, but Cathay replied,
O, what can we do? He was treated rudely. Passenger sued for damages.
Held: For being discourteous, Cathay shall be held liable for damages.
Exemplary damages
This is awarded as a penalty for misconduct or wrongdoing. Therefore, you impose
it only against the person whos guilty of misconduct. So even if the driver is reckless, you
cannot impose it on the employer, unless you can show that the employer shared in
the misconduct, i.e., he was aware that the driver was negligent, but they tolerated it.