TRANPORTATION LAW MIDTERMS LYKADENNESE

CHAPTER I – DEFINITION AND CONCEPT OF COMMON CARRIER person, corporation, firm or association engaged in the business of carrying
or transporting passengers or goods or both, by land, water, or air, for
1. ARTICLE 1732 CIVIL CODE; BROAD CONCEPT
compensation, offering their services to the public”
- Common carriers are persons, corporations, firms or associations engaged
- The test for determining whether a party is a common carrier of goods is:
in the business of carrying or transporting passengers or goods or both, by
1. He must be engaged in the business of carrying goods for others as a
land, water, or air, for compensation, offering their services to the public.
public employment, and must hold himself out as ready to engage in
DE GUZMAN V. CA
the transportation of goods for person generally as a business and not
- The Civil Code defines "common carriers" in the following terms: "Article
as a casual occupation
1732. Common carriers are persons, corporations, firms or associations
2. He must undertake to carry goods of the kind to which his business is
engaged in the business of carrying or transporting passengers or goods or
confined;
both, by land, water, or air for compensation, offering their services to the
3. He must undertake to carry by the method by which his business is
public." The above article makes no distinction between one whose
conducted and over his established roads: and 4. The transportation
principal business activity is the carrying of persons or goods or both, and
must be for hire.
one who does such carrying only as an ancillary activity (in local idiom, as "a
CALVO V. UCPB GENERAL INSURANCE CO
sideline").
- Art 1732 makes no distinction between one whose principal business
- Article 1732 also carefully avoids making any distinction between a person
activity is the carrying of persons or goods or both, and one who does such
or enterprise offering transportation service on a regular or scheduled basis
carrying only as an ancillary activity. Article 1732 also carefully avoids
and one offering such service on an occasional, episodic or unscheduled
making any distinction between a person or enterprise offering
basis. Neither does Article 1732 distinguish between a carrier offering its
transportation service on a regular or scheduled basis and one offering such
services to the "general public," i.e., the general community or population,
service on an occasional, episodic or unscheduled basis. Neither does Article
and one who offers services or solicits business only from a narrow segment
1732 distinguish between a carrier offering its services to the "general
of the general population. We think that Article 1733 deliberately refrained
public," i.e., the general community or population, and one who offers
from making such distinctions.
services or solicits business only from a narrow segment of the general
SPS CRUZ V. SUN HOLIDAYS INC
population. We think that Article 1732 deliberately refrained from making
- Art1732 makes no distinction between one whose principal business activity
such distinctions.
is the carrying of persons or goods or both, and one who does such carrying
ASIA LIGHTERAGE AND SHIPPING INC V CA
only as an ancillary activity (in local idiom, as "a sideline"). Article 1732 also
- A common carrier need not have fixed and publicly known routes. Neither
carefully avoids making any distinction between a person or enterprise
does it have to maintain terminals or issue tickets.
offering transportation service on a regular or scheduled basis and one
- The test to determine a common carrier is "whether the given undertaking
offering such service on an occasional, episodic or unscheduled basis.
is a part of the business engaged in by the carrier which he has held out to
Neither does Article 1732 distinguish between a carrier offering its services
the general public as his occupation rather than the quantity or extent of
to the "general public," i.e., the general community or population, and one
the business transacted." In the case at bar, the petitioner admitted that it
who offers services or solicits business only from a narrow segment of the
is engaged in the business of shipping and lighterage, offering its barges to
general population. We think that Article 1733 deliberately refrained from
the public, despite its limited clientele for carrying or transporting goods by
making such distinctions.
water for compensation.
FIRST PHILINDUSTRIAL CORP V. CA
ASIAN TERMINAL INC V. DAEHAN FIRE AND MARINE INSURANCE
- A "common carrier" may be defined, broadly, as one who holds himself out
- In the performance of its obligations, an arrastre operator should observe
to the public as engaged in the business of transporting persons or property
the same degree of diligence as that required of a common carrier and a
from place to place, for compensation, offering his services to the public
warehouseman. Being the custodian of the goods discharged from a vessel,
generally. Article 1732 of the Civil Code defines a "common carrier" as "any

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TRANPORTATION LAW MIDTERMS
an arrastre operator's duty is to take good care of the goods and to turn
them over to the party entitled to their possession.
SPS PERENA V. SPS ZARATE
- the true test for a common carrier is not the quantity or extent of the
business actually transacted, or the number and character of the
conveyances used in the activity, but whether the undertaking is a part of
the activity engaged in by the carrier that he has held out to the general
public as his business or occupation. If the undertaking is a single
transaction, not a part of the general business or occupation engaged in, as
advertised and held out to the general public, the individual or the entity
rendering such service is a private, not a common, carrier. The question
must be determined by the character of the business actually carried on by
the carrier, not by any secret intention or mental reservation it may
entertain or assert when charged with the duties and obligations that the
law imposes
2. CHARACTERISTICS; TESTS
FISHER V. YANGCO STEAMSHIP CO.
- The right to enter the public employment as a common carrier and to offer
one's services to the public for hire does not carry with it the right to conduct
that business as one pleases, without regard to the interests of the public,
and free from such reasonable and just regulations as may be prescribed for
the protection of the public from the reckless or careless indifference of the
carrier as to the public welfare and for the prevention of unjust and
unreasonable discriminations of any kind whatsoever in the performance of
the carrier's duties as a servant of the public
US V. QUINAJON
- A common carrier cannot, under the law, give any unnecessary or
unreasonable preference or advantage to any particular person, company,
firm, corporation or locality, or any particular kind of traffic, or subject any
particular person, company, firm, or corporation or locality, or any particular
kind of traffic, to any undue or unreasonable prejudice or discrimination
whatsoever
LOADSTAR SHIPPING CO INC V. CA
- It is not necessary that the carrier be issued a certificate of public
convenience, and this public character is not altered by the fact that the
carriage of the goods in question was periodic, occasional, episodic or
unscheduled
NATIONAL STEEL CORPORATION V.CA
- 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
LYKADENNESE
transportation service for a fee. A carrier which does not qualify under the
above test is deemed a private carrier.
CERTIFICATE OF PUBLIC CONVENIENCE (DE GUZMAN V.CA)
- A certificate of public convenience is not a requisite for the incurring of
liability under the Civil Code provisions governing common carriers. That
liability arises the moment a person or firm acts as a common carrier,
without regard to whether or not such carrier has also complied with the
requirements of the applicable regulatory statute and implementing
regulations and has been granted a certificate of public convenience or
other franchise.
- To exempt private respondent from the liabilities of a common carrier
because he has not secured the necessary certificate of public convenience,
would be offensive to sound public policy; that would be to reward private
respondent precisely for failing to comply with applicable statutory
requirements.
OWNERSHIP OF VEHICLE USED AS A CARRIER
A. REGISTERED OWNER RULE
- Gen Rule: The person who is the registered owner of the vehicle is liable for
any damage caused by the negligent operation of the vehicle although the
same was already sold or conveyed to another person at the time of the
accident
- Exception: in case of a vehicle stolen from a garage without the owner’s
knowledge and consent
B. CEBU SALVAGE CORPORATION V. PHILIPPINE HOME ASSURANCE
CORPORATION
- The fact that it did not own the vessel it decided to use to consummate the
contract of carriage did not negate its character and duties as a common
carrier.
- As a practical matter, it is very difficult and often impossible for the general
public to enforce its rights of action under a contract of carriage if it should
be required to know who the actual owner of the vessel is. In fact, in this
case, the voyage charter itself denominated petitioner as the
"owner/operator" of the vessel.
C. NON-VESSEL OPERATION COMMON CARRIER (NVOCC)
- An ocean carrier that transports goods under its own House Bill of Lading,
or equivalent documentation, without operating ocean transportation
vessels. Rather, an NVOCC leases space from another ocean carrier, or
Vessel Operating Common Carrier (VOCC), that they sell to their own
customers. An NVOCC can be described as a shipper to carriers and a carrier
to shippers.
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- While NVOCCs do not usually own their own warehouses, many own their
own fleet of containers. In certain circumstances, a NVOCC may also operate
as a freight forwarder.
3. DISTINGUISHED FROM A PRIVATECARRIER
PLANTERS PRODUCTS INC. V. CA
- It is therefore imperative that a public carrier shall remain as such,
notwithstanding the charter of the whole or portion of a vessel by one or
more persons, provided the charter is limited to the ship only, as in the case
of a time-charter or voyage-charter. It is only when the charter includes both
the vessel and its crew, as in a bareboat or demise that a common carrier
becomes private, at least insofar as the particular voyage covering the
charter-party is concerned. Indubitably, a shipowner in a time or voyage
charter retains possession and control of the ship, although her holds may,
for the moment, be the property of the charterer.
SAN PABLO V. PANTRANCO
- A clear distinction between a ferry service and coastwise or interisland
service by holding that ferry to mean the service either by barges or rafts,
even by motor or steam vessels, between the banks of a river or stream to
continue the highway which is interrupted by the body of water, or in some
cases, to connect two points on opposite shores of an arm of the sea such
as bay or lake which does not involve too great a distance or too long a time
to navigate. But where the line or service involves crossing the open sea like
the body of water between the province of Batangas and the island of
Mindoro
then it is more reasonable to regard said line or service as more properly 4.
belonging to interisland or coastwise trade
- Its CPC as a bus transportation cannot be merely amended to include this
water service under the guise that it is a mere private ferry service. Thus the
Court holds that the water transport service between Matnog and Allen is
not a ferryboat service but a coastwise or interisland shipping service
LIMITED CLIENTELE
A. PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY VS PKS SHIPPING
COMPANY
- Much of the distinction between a "common or public carrier" and a "private
or special carrier" lies in the character of the business, such that if the
undertaking is an isolated transaction, not a part of the business or
occupation, and the carrier does not hold itself out to carry the goods for
the general public or to a limited clientele, although involving the carriage
of goods for a fee, the person or corporation providing such service could
very well be just a private carrier. A typical case is that of a charter party
LYKADENNESE
which includes both the vessel and its crew, such as in a bareboat or demise,
where the charterer obtains the use and service of all or some part of a ship
for a period of time or a voyage or voyages and gets the control of the vessel
and its crew.
B. FGU INSURANCE CORPORATION V. G.P SARMIENTO TRUCKING
CORPORATION
- 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 hire or compensation, offering their services to the
public, whether to the public in general or to a limited clientele in particular,
but never on an exclusive basis. The true test of a common carrier is the
carriage of passengers or goods, providing space for those who opt to avail
themselves of its transportation service for a fee.
LINE SERVICE VS TRAMP SERVICE
- LINE: it publicly offer services without discrimination to any user, has regular
ports of call/destination, fixed sailing schedules and frequencies published
freight rates and attendant chargers and usually carries multiple
consignments. Liners carry general cargoes, meaning whatever is offered is
accepted for shipment
- TRAMP: it is hired on a contractual basis. It has no regular and fixed routes
and schedules but accepts cargo wherever and whenever the shipper
desires. It is a matter of special arrangement between shipowner and
shipper; although referred as contract carrier, it may also be considered
common carrier depending on the circumstances
CONTRACTOF CARRIAGE DISTINGUISHED FROM OTHER TRANSACTIONS
TOWAGE (BAER SENIOR & CO V. LA COMPANIA MARITAMA)
- A contract of towage is not a contract for the carriage of goods.
- Towage means one vessel is hired to bring another vessel to another place.it
refers to services rendered to a vessel by towing for the mere purpose of
expediting her voyage without reference to any circumstances of danger.
- A general ship carrying goods for hire, whether employed in internal, in
coasting, or in foreign commerce, is a common carrier; and the ship and her
owners, in the absence of a valid agreement to the contrary, are liable to
the owners of the goods carried as insurers against all losses, excepting only
such irresistible causes as the act of God and public enemies. But a tug and
her owners are subject to no such liability to the owners of the vessels
towed, or of the cargoes cannot maintain any action for the loss of either
against the tug of her owners, without proving negligence on her part. "An
engagement to tow does not impose either an obligation to insure or the
liability of common carriers
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STEVEDORING(MINDANAO TERMINAL AND BROKERAGE SERVICE, INC
V.PHOENIX ASSURANCE COMPANY NEW YORK)
- There is a distinction between an arrastre and a stevedore. 24 Arrastre, a
Spanish word which refers to hauling of cargo, comprehends the handling
of cargo on the wharf or between the establishment of the consignee or
shipper and the ship's tackle. The responsibility of the arrastre operator lasts
until the delivery of the cargo to the consignee. The service is usually
performed by longshoremen. On the other hand, stevedoring refers to the
handling of the cargo in the holds of the vessel or between the ship's tackle
and the holds of the vessel. The responsibility of the stevedore ends upon
the loading and stowing of the cargo in the vessel.
- There is a distinction between an arrastre and a stevedore. 24 Arrastre, a
Spanish word which refers to hauling of cargo, comprehends the handling
of cargo on the wharf or between the establishment of the consignee or
shipper and the ship's tackle. The responsibility of the arrastre operator lasts
until the delivery of the cargo to the consignee. The service is usually
performed by longshoremen. On the other hand, stevedoring refers to the
handling of the cargo in the holds of the vessel or between the ship's tackle
and the holds of the vessel. The responsibility of the stevedore ends upon
the loading and stowing of the cargo in the vessel.
ARRASTRE/TERMINAL OPERATOR (ASIAN TERMINAL INC. V. DAEHAN FIRE AND
MARINE INSURANCE)
- The relationship between the consignee and arrastre operator is s akin to
that existing between the consignee and/or the owner of the shipped goods
and the common carrier, or that between a depositor and warehouseman.
- In the performance of its obligations, an arrastre operator should observe
the same degree of diligence as that required of a common carrier and a
warehouseman. Being the custodian of the goods discharged from a vessel,
an arrastre operator's duty is to take good care of the goods and to turn
them over to the party entitled to their possession.
- A contract for the unloading of goods from a vessel; it comprehends the
handling of cargo on the wharf or between the establishment of the
consignee or the shipper and the ship’s tackle. Its responsibility lasts until
the delivery of the cargo to the consignee
FREIGHT FORWARDING (UNSWORTH TRANNSPORT INTERNATIONAL PHILS INC
V. CA)
- The term "freight forwarder" refers to a firm holding itself out to the general 5.
public (other than as a pipeline, rail, motor, or water carrier) to provide
transportation of property for compensation and, in the ordinary course of
its business, (1) to assemble and consolidate, or to provide for assembling
LYKADENNESE
and consolidating, shipments, and to perform or provide for break-bulk and
distribution operations of the shipments; (2) to assume responsibility for the
transportation of goods from the place of receipt to the place of destination;
and (3) to use for any part of the transportation a carrier subject to the
federal law pertaining to common carriers
- A freight forwarder's liability is limited to damages arising from its own
negligence, including negligence in choosing the carrier; however, where
the forwarder contracts to deliver goods to their destination instead of
merely arranging for their transportation, it becomes liable as a common
carrier for loss or damage to goods. A freight forwarder assumes the
responsibility of a carrier, which actually executes the transport, even
though the forwarder does not carry the merchandise itself.
TRAVEL AGENCY ( CRISOSTOMO V. CA)
- Travel agency is not a common carrier
- It is not an entity engaged in the business of transporting either passengers
or goods and is therefore, neither a private nor a common carrier. It did not
undertake to transport petitioner from one place to another since its
covenant with its customers is simply to make travel arrangements in their
behalf. It's services as a travel agency include procuring tickets and
facilitating travel permits or visas as well as booking customers for tours.
While petitioner concededly bought her plane ticket through the efforts of
respondent company, this does not mean that the latter ipso facto is a
common carrier.
TRANSPORTATION NETWORK COMPANY (TNC) V. TRANSPORTATION
NETWORK VEHICLE SERVICE (TNVS) (LTFRB MC NO. 2015-015, 018)
- TNC shall mean as an organization whether a corporation, partnership, or
sole proprietor, that provides pre-arranged transportation services for
compensation using an internet-based technology to connect passengers
with drivers using their personal vehicles hence treated as transport
provider
- The TNC shall exercise due diligence of a good father of a family in
accrediting and supervising its drivers. The TNC shall be held liable for acts
or omissions committed by its TNVS while online except if the same is
beyond the TNC’S control
- The accountability of TNVS, as a common carrier attaches from the time the
TNVS is online and offers its services to the riding public.
GOVERNMENT REGULATION OF COMMON CARRIER’S BUSINESS; PUBLIC
POLICIES
PUBLIC INTEREST DOCTRINE (KMU LABOR CENTER V. GARCIA)
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TRANPORTATION LAW MIDTERMS
- Public utilities are privately owned and operated businesses whose service
are essential to the general public. They are enterprises which specially cater
to the needs of the public and conduce to their comfort and convenience.
As such, public utility services are impressed with public interest and
concern.
- The same is true with respect to the business of common carrier which holds
such a peculiar relation to the public interest that there is superinduced
upon it the right of public regulation when private properties are affected
with public interest, hence, they cease to be juris privati only.
- When, one devotes his property to a use in which the public has an interest,
he, in effect grants to the public an interest in that use, and must submit to
the control by the public for the common good, to the extent of the interest
he has thus created
TATAD V. GARCIA
- The exercise of the rights encompassed in ownership is limited by law so
that a property cannot be operated and used to serve the public as a public
utility unless the operator has a franchise. The operation of a rail system as
a public utility includes the transportation of passengers from one point to
another point, their loading and unloading at designated places and the
movement of the trains at pre-scheduled times.
- The right to operate a public utility may exist independently and separately
from the ownership of the facilities thereof. One can own said facilities
without operating them as a public utility, or conversely, one may operate a
public utility without owning the facilities used to serve the public. The
devotion of property to serve the public may be done by the owner or by
the person in control thereof who may not necessarily be the owner thereof.
This dichotomy between the operation of a public utility and the ownership
of the facilities used to serve the public can be very well appreciated when
we consider the transportation industry. Enfranchised airline and shipping
companies may lease their aircraft and vessels instead of owning them
themselves.
REGISTERED OWNER RULE
A. GELISAN V. ALDAY
- 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.
B. BENEDICTO V. IAC
- The prevailing doctrine on common carriers makes the registered owner
liable for consequences flowing from the operations of the carrier, even
LYKADENNESE
though the specific vehicle involved may already have been transferred to
another person.
- This doctrine rests upon the principle that in dealing with vehicles registered
under the Public Service Law, the public has the right to assume that the
registered owner is the actual or lawful owner thereof. It would be very
difficult and often impossible as a practical matter, for members of the
general public to enforce the rights of action that they may have for injuries
inflicted by the vehicles being negligently operated if they should be
required to prove who the actual owner is. The registered owner is not
allowed to deny liability by proving the identity of the alleged transferee
C. EREZO V. EPTE
- In the dealing with vehicles registered under the Public Service Law, the
public has the right to assume or presume that the registered owner is the
actual owner thereof, for it would be difficult for the Public to enforce the
actions that they may have foe injuries caused to them by the vehicles being
negligently operated if the public should be required to prove who the
actual owner is
- Motor Vehicle Registration is required not to make said registration the
operative act by which ownership in vehicles is transferred as in land
registration cases, because the administrative proceeding of registration
does not bear any essential relation to the contract of sale between the
parties but to permit the use and operation of the vehicle upon any public
highway.
KABIT SYTEM
A. SANTOS V. SIBUG
- Section 20 (g) of the Public Service Act, then the applicable law, specifically
provided: ". . . it shall be unlawful for any public service or for the owner,
lessee or operator thereof, without the approval and authorization of the
Commission previously had . . . (g) to sell, alienate, mortgage, encumber or
lease its property, franchise, certificates, privileges, or rights or any part
thereof.
B. LITA ENTERPRISES INC V. IAC
- kabit system, whereby a person who has been granted a certificate of
convenience allows another person who owns motor vehicles to operate
under such franchise for a fee. A certificate of public convenience is a special
privilege conferred by the government. Abuse of this privilege by the
grantees thereof cannot be countenanced. The "kabit system" has been
identified as one of the root causes of the prevalence of graft and corruption
in the government transportation offices
C. TEJA MARKETING V. IAC
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TRANPORTATION LAW
- Although not outrightly penalized as a criminal offense, the kabit system is
invariably recognized as being contrary to public policy and, therefore, void
and inexistent under Article 1409 of the Civil Code. It is a fundamental
principle that the court will not aid either party to enforce an illegal contract,
but will leave both where it finds them. Upon this premise it would be error
to accord the parties relief from their predicament. Article 1412 of the Civil
Code denies them such aid.
D. LIM V. CA
- one of the primary factors considered in the granting of a certificate of
public convenience for the business of public transportation is the financial
capacity of the holder of the license, so that liabilities arising from accidents
may be duly compensated. The kabit system renders illusory such purpose
and, worse, may still be availed of by the grantee to escape civil liability
caused by a negligent use of a vehicle owned by another and operated under
his license. If a registered owner is allowed to escape liability by proving who
the supposed owner of the vehicle is, it would be easy for him to transfer
the subject vehicle to another who possesses no property with which to
respond financially for the damage done.
- Thus, for the safety of passengers and the public who may have been
wronged and deceived through the baneful kabit system, the registered
owner of the vehicle is not allowed to prove that another person has
become the owner so that he may be thereby relieved of responsibility.
Subsequent cases affirm such basic doctrine. It would seem then that the
thrust of the law in enjoining the kabit system is not so much as to penalize
the parties but to identify the person upon whom responsibility may be fixed
in case of an accident with the end view of protecting the riding public. The
policy therefore loses its force if the public at large is not deceived, much
less involved
BOUNDARY SYSTEM
A. MAGBOO V. BERNARDO
- An employer-employee relationship exists between a jeepney-owner and a
driver under a "boundary system" — namely, the fact that the driver does
not receive a fixed wage but gets only the excess of the amount of fares
collected by him over the amount he pays to the jeep-owner, and that the
gasoline consumed by the jeeps is for the account of the driver — are not
sufficient to withdraw the relationship between them from that of employer
and employee. Consequently, the jeepney-owner is subsidiary liable as
employer in accordance with Art. 103, Revised Penal Code.
B. SPS HERNANDEZ V. SPS DOLOR
MIDTERMS LYKADENNESE
- Indeed to exempt from liability the owner of a public vehicle who operates
it under the "boundary system" on the ground that he is a mere lessor would
be not only to abet flagrant violations of the Public Service Law, but also to
place the riding public at the mercy of reckless and irresponsible drivers —
reckless because the measure of their earnings depends largely upon the
number of trips they make and, hence, the speed at which they drive; and
irresponsible because most if not all of them are in no position to pay the
damages they might cause.
6. GOVERNING LAW ON COMMON CARRIERS
APPLICABLE LAWS
A. COASTWISE SHIPPING
a. Primary Law: Civil Code (1732-1766)
b. Suppletory: Code of Commerce, in the absence of Civil Code
B. CARRIAGE FROM FOREIGN PORTS TO PH PORTS
a. Primary Law: Civil Code
b. Suppletory: Code of Commerce, all matters not regulated by Civil Code
C. CARRIAGE FROM PH PORTS TO FOREIGN PORTS
o Laws of the country to which the goods are to be transported (Art
1753 Civil Code)
D. OVERLAND TRANSPORTATION
a. Primary law: Civil Code
b. Suppletory: Code of Commerce
E. AIR TRANSPORTATION
a. Civil Code
b. Code of Commerce
c. Warsaw convention
d. Chicago Convention; Convention on International Civil Aviation
e. RA 9497 Civil Aviation Authority Act of 2008
CONFLICTS RULE (ART. 1753 CC)
- 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.
EASTERN SHIPPING LINES V. IAC
- 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. 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.
NATIONAL DEVELOPMENT CO. V. CA
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TRANPORTATION LAW MIDTERMS
- Liability for goods is governed by the principle in Eastern Shipping Lines V.
IAC
7. OBLIGATIONS OF COMMON CARRIER, IN GENERAL
COMMENCEMENT
- 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.
DUTY TO SERVE; EXCEPTION
A. INTERNATIONAL MARITIME DANGEROUS GOODS (IMDG) CODE
- accepted as an international guideline to the safe transportation or
shipment of dangerous goods or hazardous materials by water on vessel.
- It is intended for use not only by the mariner but also by all those involved
in industries and services connected with shipping.
B. MARINA CIRCULAR NO. 1 SERIES OF 2008 (CARRIAGE OF DANGEROUS
GOODS IN DOMESTIC TRADE)
- This Circular shall cover all Philippine registered domestic ships, except
those specifically classified/designed to carry in bulk a particular class/type
of dangerous and/or hazardous cargoes or goods.
DUTY TO DELIVER
1. To seasonably deliver of the goods and
2. To deliver the goods to the proper person
A. ACTUAL VS CONSTRUCTIVE DELIVERY
- Actual Delivery: Also known as physical delivery, actual delivery takes place
when the goods are physically handed over by the seller or his/her
authorized agent to the buyer or his/her agent authorized to take
possession of the goods.
- Constructive Delivery: In this case neither physical nor symbolic delivery is
made. In constructive delivery the individual possessing the products
recognizes that he holds the merchandise for the benefit of, and at the
disposal of the purchaser. Constructive delivery is also called attornment.
B. CODE OF COMMERCE PROVISION
- Time of Delivery:
b. Stipulated in the Contract or Bill of Lading 8.
c. No stipulation
a. Within a reasonable time which shall depend on the expected
date of arrival in the bill of lading or on the nature of goods
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b. Carrier is bound to forward them in the first shipment of the
same or similar goods which he may make to the point of
delivery
C. WHERE AND TO WHOM DELIVERED
1. PLACE
2. CONSIGNEE – not only to transport goods safely but to deliver the same
to the person indicated in the bill of lading. The goods should be
delivered to the consignee or any other person to whom the bill of
lading was validly transferred or negotiated
DUTY TO EXERCISE ORDINARY DILIGENCE
- 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.
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.
- Duration of liability: Art 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 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 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.
PERFECTION OF CONTRACT OF COMMON CARRIAGE
ASPECTS OF CONTRACTOF CARRIAGE
A. BRITISHG AIRWAYS INC V. CA
- there are two (2) aspects of the same, namely: (a) the contract 'to carry (at
some future time),' which contract is consensual and is necessarily
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perfected by mere consent (See Article 1356, Civil Code of the Philippines)
and (b) the contract 'of carriage' or 'of common carriage' itself which should
be considered as a real contract for not until the carrier is actually used can
the carrier be said to have already assumed the obligation of a carrier.
CARRIAGE OF GOODS
1. Contract to carry goods – a consensual contract to carry goods whereby the
carrier agrees to accept and transport at some future date
2. Contract of carriage of good – by the act of delivery of the goods, when the
goods are unconditionally placed in the possession and control of the carrier
for the transportation
CARRIAGE OF PASSENGERS
1. Contract to carry – it is an agreement to carry the passengers at some future
date. It is consensual and is therefore perfected by mere consent
2. Contract of common carriage or of common carrier – it is considered a rea
contract not until the facilities of the common carrier are actually used can
the carrier be said to have already assumed the obligation of the carrier
3. Aircraft
a. Contract to carry passenger – it is perfected even if no tickets are issued
so long as there was already meeting of the minds with respect to the
subject matter and the consideration
b. Contract of carriage between passenger and airline – it is perfected
when the passenger had checked in at the departure counter, passed
through customs and immigration, boarded the shuttle bus and
proceeded to the ramp of the aircraft and his baggage loaded to the
aircraft.
A. MANAY JR V. CEBU AIR INC.
- Common carriers are required to exercise extraordinary diligence in the
performance of its obligations under the contract of carriage. This
extraordinary diligence must be observed not only in the transportation of
goods and services but also in the issuance of the contract of carriage,
including its ticketing operations
- When a common carrier, through its ticketing agent, has not yet issued a
ticket to the prospective passenger, the transaction between them is still
that of a seller and a buyer. The obligation of the airline to exercise
extraordinary diligence commences upon the issuance of the contract of
carriage. Ticketing, as the act of issuing the contract of carriage, is
necessarily included in the exercise of extraordinary diligence
- Once a plane ticket is issued, the common carrier binds itself to deliver the
passenger safely on the date and time stated in the ticket. The contractual
LYKADENNESE
obligation of the common carrier to the passenger is governed principally by
what is written on the contract of carriage.
B. RAMOS V. CHINA SOUTHERN AIRLINES CO. LTD
- When an airline issues a ticket to a passenger confirmed on a particular
flight, on a certain date, a contract of carriage arises, and the passenger has
every right to expect that he would fly on that flight and on that date. If that
does not happen, then the carrier opens itself to a suit for breach of contract
of carriage.
- In an action based on a breach of contract of carriage, the aggrieved party
does not have to prove that the common carrier was at fault or was
negligent. All he has to prove is the existence of the contract and the fact
of its non-performance by the carrier, through the latter's failure to carry
the passenger to its destination.
CHAPTER II – CONTRACTOF COMMON CARRIAGE
A. VIGILANCE OVER GOODS
I. EXTRAORDINARY DILIGENCE REQUIRED OF COMMON CARRIERS (ARTICLE
1733, CC)
- 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.
DEFINITION AND REASON FOR THE POLICY
A. REPUBLIC V. LORENZO SHIPPING CORPORATION
- Article 1733 of the Civil Code demands that a common carrier observe
extraordinary diligence over the goods transported by it. 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. This exacting standard imposed on common carriers
in a contract of carriage of goods is intended to tilt the scales in favor of the
shipper who is at the mercy of the common carrier once the goods have
been lodged for shipment.
- Hence, in case of loss of goods in transit, the common carrier is presumed
under the law to have been at fault or negligent. However, the presumption
of fault or negligence, may be overturned by competent evidence showing
that the common carrier has observed extraordinary diligence over the
goods.
B. DOCTRINE OF NON-DELEGABLE DUTY AS APPLIED TO COMMON CARRIERS
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- The party with such a duty may not absolve itself of liability by contracting
out the performance of that duty.
- A party may contract out the performance of a nondelegable duty, but may
not contract out his ultimate legal responsibility.
CARRIAGE BY SEA
A. SEAWORTHINESS
- legally defined, a seaworthy ship is one that is fit for any normal perils of the
sea, including the fitness of the vessel itself as well as any equipment on it
and the skills and health of its crew.
- Note that this only includes the perils of the sea, as opposed to the perils on
the sea, and so does not include piracy, severe storms or other such hazards
that may occasionally be encountered.
1. CASE LAW (STANDARD VACUUM OIL COMPANY V. LUZON
STEVEDORING COMPANY)
- Under Article 361 of the Code of Commerce. merchandise transported in
the sea by virtue of a contract entered into between the shipper and the
carrier, is deemed transported at the risk and venture of the shipper, if the
contrary is not stipulated, and all damages suffered by the merchandise
during the transportation by reason of accident or force majeure shall be for
the account and risk of the shipper, but the proof of these accidents is
incumbent on the carrier
2. SATUTES IN PARI MATERIA
1. SEC 3(1)(a) and (b) COGSA
o Section 3. (1) The carrier shall be bound, before and at the
beginning of the voyage, to exercise due diligence to —
a. Make the ship seaworthy;
b. Properly man, equip, and supply the ship;
2. Sec.116 and 119 Insurance Code
o 116: A warranty of seaworthiness extends not only to the condition
of the structure of the ship itself, but requires that it be properly
laden, and provided with a competent master, a sufficient number
of competent officers and seamen, and the requisite
appurtenances and equipment, such as ballasts, cables and
anchors, cordage and sails, food, water, fuel and lights, and other
necessary or proper stores and implements for the voyage.
o 117: Where different portions of the voyage contemplated by a
policy differ in respect to the things requisite to make the ship
seaworthy therefor, a warranty of seaworthiness is complied with
if, at the commencement of each portion, the ship is seaworthy
with reference to that portion.
LYKADENNESE
B. WHEN SHOULD A SHIP BE SEAWORTHY
1. COGSA – Carriage of Goods by the Sea Act; The carrier shall be bound
before and at the beginning of the voyage to exercise due diligence to
make the ship seaworthy
2. COMMON LAW; DORTRIN OF STAGES – “before and at the beginning
of the voyage.”
3. Domestic Shipping - SEC. 9. Safety Standards. - All vessels operate by
domestic ship operators shall at all times be in seaworthy condition
properly equipped with adequate life-saving, communication, safety
and other equipment operated and maintained in accordance with the
standards set by MARINA, and manned by duly licensed and competent
vessel crew.
C. DOES PRESUMPTION OF FAULT TRANSLATE TO PRESUMPTION OF
UNSEAWORTHINESS
- YES. The unseaworthiness can be stablished by the fact that it did not
withstand the natural and inevitable action of the sea.
- Carrying a deck cargo raises the presumption of unseaworthiness unless it
can be shown that the deck cargo will not interfere with the proper
management of the ship.
D. CARGOWORTHINESS
- Cargoworthiness means the ship must be sufficiently strong and equipped
to carry the particular kind of cargo which she has contracted to carry and
her cargo must be so loaded that it is safe for her to proceed on her voyage
- The ship must not be only seaworthy but it must also be cargo worthy. The
ship must be an efficient storehouse for cargo.
1. CASE LAW (SANTIAGO LIGHTERAGE CORPORATION V.CA)
- A vessel is cargoworthy if it is sufficiently strong and equipped to carry the
particular kind of cargo which she has contracted to carry, and her cargo
must be so loaded that it is safe for her to proceed on her voyage. A mere
right given to the charterer to inspect the vessel before loading and to satisfy
himself that she was fit for the contracted cargo does not free the shipowner
from his obligation to provide a cargoworthy ship.
2. SEC 3(1)(C) COGSA
- (c) Make the holds, refrigerating and cooling chambers, and all other parts
of the ship in which goods are carried, fit and safe for their reception
carriage and preservation.
E. SUFFICIENT FREEBOARD (1.1.1.1. INTERNATIONAL CONVENTION ON LOAD
LINES)
1. COMPULSORY MARKETING OF INTERNATIONAL LOAD
LINES(PLIMSOLL LINE)
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- Plimsoll line is a reference mark located on a ship's hull that indicates the
maximum depth to which the vessel may be safely immersed when loaded
with cargo. This depth varies with a ship's dimensions, type of cargo, time
of year, and the water densities encountered in port and at sea.
2. PLIMSOLL LINE MUST NOT BE SUBMERGED
- A commercial ship is properly loaded when the ship's waterline equals the
ship's Plimsoll line. Plimsoll mark on the hull of a floating ship. The Plimsoll
line is a reference mark located on a ship's hull that indicates the maximum
depth to which the vessel may be safely immersed when loaded with carg
F. WARRANTY AGAINST IMPROPER DEVIATION
- ARTICLE 359. If there is an agreement between the shipper and the carrier
as to the road over which the conveyance is to be made, the carrier may not
change the route, unless it be by reason of force majeure; and should he do
so without this cause, he shall be liable for all the losses which the goods he
transports may suffer from any other cause, beside paying the sum which
may have been stipulated for such case.
- When on account of said cause of force majeure, the carrier had to take
another route which produced an increase in transportation charges, he
shall be reimbursed for such increase upon formal proof thereof.
G. SURVEY OR INSPECTION OF CARGO ON REASONABLE GROUNDS
CARRIAGE BY LAND
A. ROADWORTHINESS AND RAILWORTHINESS
- Roadworthiness or streetworthiness is a property or ability of a car, bus,
truck or any kind of automobile to be in a suitable operating condition or
meeting acceptable standards for safe driving and transport of people,
baggage or cargo in roads or streets, being therefore street-legal.
- Railworthiness is the property or ability of a locomotive, passenger car,
freight car, train or any kind of railway vehicle to be in proper operating
condition or to meet acceptable safety standards of project, manufacturing,
maintenance and railway use for transportation of persons, luggage or
cargo.
- Railworthiness is the condition of the rail system and its suitability for rail
operations in that it has been designed, constructed, maintained and
operated to approved standards and limitations by competent and
authorised individuals, who are acting as members of an approved
organisation and whose work is both certified as correct and accepted on
behalf of the rail system owner.
B. MOTOR VEHICLE MUST BE IN GOOD CONDITION
C. WARRANTY AGAINST DEFECTIVE PARTS
D. COMPLIANCE WITH TRAFFIC REGULATIONS
LYKADENNESE
- Article 2185. Unless there is proof to the contrary, it is presumed that a
person driving a motor vehicle has been negligent if at the time of the
mishap, he was violating any traffic regulation.
E. PROHIBITION AGAINST IMPROPER DEVIATION
- ARTICLE 359. If there is an agreement between the shipper and the carrier
as to the road over which the conveyance is to be made, the carrier may not
change the route, unless it be by reason of force majeure; and should he do
so without this cause, he shall be liable for all the losses which the goods he
transports may suffer from any other cause, beside paying the sum which
may have been stipulated for such case.
- When on account of said cause of force majeure, the carrier had to take
another route which produced an increase in transportation charges, he
shall be reimbursed for such increase upon formal proof thereof.
F. INSPECTION OF CARGO ON REASONABLE GROUNDS
CARRIAGE BY AIR
A. AIRWORTHINESS
- an aircraft, its engines, propellers, and other components and accessories,
are of proper design and construction, and are safe for air navigation
purposes, such design and construction being consistent with accepted
engineering practice and in accordance with aerodynamic laws and aircraft
science.
B. COMPETENCE AND FITNESS OF THE CREW
C. WARRANTY AGAINST IMPROPER DEVIATION
D. DUTY TO INSPECT CARGO AND BAGGAGE (SEC 8 RA 6235)
- Section 8. Aircraft companies which operate as public utilities or operators
of aircraft which are for hire are authorized to open and investigate
suspicious packages and cargoes in the presence of the owner or shipper, or
his authorized representatives if present; in order to help the authorities in
the enforcement of the provisions of this Act: Provided, That if the owner,
shipper or his representative refuses to have the same opened and
inspected, the airline or air carrier is authorized to refuse the loading
thereof.
CARRIAGE OF DANGEROUS GOODS
A. SAFE CARRIAGE OF DANGEROUS GOODS
- Gen Rule: a carrier which is not properly equipped to transport dangerous
chemicals or explosives may validly refuse to accept the same for transport
- Exceptions: when granted authority to carry goods thatare by nature
dangerous or hazardous
B. DUTY TO DISCHARGE OR DESTORY DG
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- Sec 4(6) COGSA Goods of an inflammable, explosive, or dangerous nature to
the shipment whereof the carrier, master or agent of the carrier, has not
consented with knowledge of their nature and character, may at any time
before discharge be landed at any place or destroyed or rendered innocuous
by the carrier without compensation, and the shipper of such goods shall be
liable for all damages and expenses directly or indirectly arising out of or
resulting from such shipment. If any such goods shipped with such
knowledge and consent shall become a danger to the ship or cargo, they
may in like manner be landed at any place, or destroyed or rendered II.
innocuous by the carrier without liability on the part of the carrier except to
general average, if any.
C. ACCEPTANCE, SHIPPING AND HANDLING OF DG IN ACCORDANCE WITH
THE 2012 INTERNATIONAL MARITIME DANGEROUS CODE AND MARINA
MEMOR CIRCULAR NO.1-2008
D. DUTY TO SECURE DG FROM UNAUTHORIZED ACCESS
E. PROPER TRAINING IN HANDLING DG
- All the crew members engaged on a ship and involved directly with
dangerous cargo carried on the ship must undergo dangerous goods course,
which is based on STCW requirements and prepared as per IMO guidance.
There are several shore-based training centres which offer dangerous goods
training to handle the IMDG cargo on a ship. Following are important points,
which a seafarer must understand under IMDG code:
o The seafarer should be able to classify dangerous goods and
identify the shipping names of the dangerous goods.
LYKADENNESE
o He/she should know how the particular IMDG cargo should be
packed
o He should understand different types of markings, labels or
placards used to address various dangerous goods
o Must know safe practice to load/unload the cargo unit carrying the
IMDG product
F. SURVEY OR INSPECTION OF CARGO TO ENFORCE COMPLIANCE WITH IMDG
AND OTHER REGULATIONS
LIABILITY OF CARRIERS FOR LOSS, DESTRUCTION AND DETERIORATION OF
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 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.
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- 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.
PRESUMPTION OF NEGLIGENCE (REGIONAL CONTAINER INES OF SINGAPORE V.
NETHERLANDS INSURANCE CO INC)
- A common carrier is presumed to have been negligent if it fails to prove that
it exercised extraordinary vigilance over the goods it transported. 8 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. 9
- 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
COMMON CARRRIER DEFENSES; EXCLUSIVE?
A. ACTS OF GOD
- 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;
- 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.
1. 2013 HEAVY WEATHER GUIDELINES (PCG MEMORANDUM CIRCULAR NO
02-2013)
- This Memorandum Circular prescribes the policies on movement of vessels
during the occurrence of a tropical depression, storm or typhoon in the
LYKADENNESE
Philippine area of responsibility to prevent the occurrence of maritime
accident and damage to the marine environment.
2. EASTERN SHIPPING LINES V.IAC
- As the peril of fire is not comprehended within the exceptions in Article
1734, supra, Article 1735 of the Civil Code provides that in all cases other
than those mentioned in Article 1734, the common carrier shall be
presumed to have been at fault or to have acted negligently, unless it proves
that it has observed the extraordinary diligence required by law
3. EASTERN SHIPPING LINES V. CA
- Plainly, the heavy seas and rains referred to in the master's report were not
caso fortuito, but normal occurrences that an ocean-going vessel,
particularly in the month of September which, in our area, is a month of
rains and heavy seas would encounter as a matter of routine. They are not
unforeseen nor unforeseeable. These are conditions that ocean-going
vessels would encounter and provide for, in the ordinary course of a voyage.
Since the carrier has failed to establish any caso fortuito, the presumption
by law of fault or negligence on the part of the carrier applies; and the carrier
must present evidence that it has observed the extraordinary diligence
required by Article 1733 of the Civil Code in order to escape liability for
damage or destruction to the goods that it had admittedly carried in this
case. No such evidence exists of record. Thus, the carrier cannot escape
liability.
4. SCHMITZ TRANSPORT & BROKERAGE CORPORATION V. TRASNPORT
VENUE INC
- The principle embodied in the act of God doctrine strictly requires that the
act must be occasioned solely by the violence of nature. Human intervention
is to be excluded from creating or entering into the cause of the mischief.
When the effect is found to be in part the result of the participation of man,
whether due to his active intervention or neglect or failure to act, the whole
occurrence is then humanized and removed from the rules applicable to the
acts of God.
5. PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY V. PKS SHIPPING
COMPANY
- According to PAGASA, a storm has a wind force of 48 to 55 knots, equivalent
to 55 to 63 miles per hour or 10 to 11 in the Beaufort Scale. The second mate
of the vessel stated that the wind was blowing around force 7 to 8 on the
Beaufort Scale. Consequently, the strong winds accompanying the
southwestern monsoon could not be classified as a "storm." Such winds are
the ordinary vicissitudes of a sea voyage.
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6. CENTRAL SHIPPING COMPANY INC V. INSURANCE COMPANY OF NORTH
AMERICA
- The doctrine of limited liability under Article 587 of the Code of Commerce
does not apply to situations in which the loss or the injury is due to the
concurrent negligence of the shipowner and the captain.
7. TRANSIMEX CO V. AFRE ASIAN INSURANCE CORP
- In this case, the documentary and testimonial evidence cited by petitioner
indicate that M/V Meryem Ana faced winds of only up to 40 knots while at
sea. This wind force clearly fell short of the 48 to 55 knots required for
"storms" under Article 1734 (1) of the Civil Code based on the threshold
established by PAGASA. Petitioner also failed to prove that the inclement
weather encountered by the vessel was unusual, unexpected, or
catastrophic. In particular, the strong winds and waves, which allegedly
assaulted the ship, were not shown to be worse than what should have been
expected in that particular location during that time of the year.
Consequently, this Court cannot consider these weather conditions as
"perils of the sea" that would absolve the carrier from liability.
B. ACTS OF PUBLIC ENEMY
- 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:
2. Act of the public enemy in war, whether international or civil;
- 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.
1. EXISTENCE OF WAR; PRIZE CASES (67 US 635)
2. PIRACY
3. REBELS AS PUBLIC ENEMY
C. SHIPPER OR OWNERS’ FAULT
- 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:
(3) Act or omission of the shipper or owner of the goods;
- Article 1741. If the shipper or owner merely contributed to the loss,
destruction or deterioration of the goods, the proximate cause thereof
LYKADENNESE
being the negligence of the common carrier, the latter shall be liable in
damages, which however, shall be equitably reduced.
1. WHO ARE CONSIDERED SHIPPER AND/OWNER?
- Shipper is a person or company that sends or transports goods by sea, land,
or air.
- Owner is a person who owns something : one who has the legal or rightful
title to something
2. SOLE AND PROXIMATE VS. CONTRIBUTORY ONLY
- a proximate cause is an event sufficiently related to an injury that the courts
deem the event to be the cause of that injury.
- Contributory negligence is the failure of an injured plaintiff to act prudently,
considered to be a contributory factor in the injury suffered, and sometimes
reducing the amount recovered from the defendant.
3. COMPANIA MARITAMA V. CA
- While the act of private respondent in furnishing petitioner with an
inaccurate weight of the payloader cannot successfully be used as an excuse
by petitioner to avoid liability to the damage thus caused, said act
constitutes a contributory circumstance to the damage caused on the
payloader, which mitigates the liability for damages of petitioner in
accordance with Article 1741 of the Civil Code
4. DELSAN TRANSPORT LINBES, INC V. AMERICAN HOME ASSURANCE
CORPORATION
- To recapitulate, common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence in
vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.
- The mere proof of delivery of goods in good order to the carrier, and their
arrival in the place of destination in bad order, make out a prima facie case
against the carrier, so that if no explanation is given as to how the injury
occurred, the carrier must be held responsible. It is incumbent upon the
carrier to prove that the loss was due to accident or some other
circumstances inconsistent with its liability
5. SHIPPER’S LOAD AND COUNT ARRANGEMENT (MARINA PORT SERVICES,
INC V. AMERICAN ASSURANCE)
- This means that the shipper was solely responsible for the loading of the
container, while the carrier was oblivious to the contents of the shipment.
Protection against pilferage of the shipment was the consignee's lookout.
The arrastre operator was, like any ordinary depositary, duty-bound to take
good care of the goods received from the vessel and to turn the same over
to the party entitled to their possession, subject to such qualifications as
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may have validly been imposed in the contract between the parties. The
arrastre operator was not required to verify the contents of the container
received and to compare them with those declared by the shipper because,
as earlier stated, the cargo was at the shipper's load and count. The arrastre
operator was expected to deliver to the consignee only the container
received from the carrier.
D. INHERENT VICE
- 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:
(4) The character of the goods or defects in the packing or in the containers;
- 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.
1. BELGIAN OVERSEAS CHARTERING AND SHIPPING V. PHILIPPINE FIRST
INSURANCE CO.
- When what would ordinarily be considered packages are shipped in a
container supplied by the carrier and the number of such units is disclosed
in the shipping documents, each of those units and not the container
constitutes the 'package' referred to in the liability limitation provision of
Carriage of Goods by Sea Act
2. ASIAN TERMINALS INC V. SIMON ENTERPRISE
- The presumption that the bill of lading, which petitioner relies upon to
support its claim for restitution, constitutes prima-facie evidence of the
goods therein described was correctly deemed by the appellate court to
have been rebutted in light of abundant evidence casting doubts on its
veracity
3. PLANTERS PRODUCTS INC V. CA
- Article 1734 of the New Civil Code provides that common carriers are not
responsible for the loss, destruction or deterioration of the goods if caused
by the character of the goods or defects in the packaging or in the
containers. The Code of Commerce also provides that all losses and
deteriorations which the goods may suffer during the transportation by
reason of fortuitous event, force majeure, or the inherent defect of the
goods, shall be for the account and risk of the shipper, and that proof of
these accidents is incumbent upon the carrier. 37 The carrier, nonetheless,
shall be liable for the loss and damage resulting from the preceding causes
if it is proved, as against him, that they arose through his negligence or by
LYKADENNESE
reason of his having failed to take the precautions which usage has
established among careful persons
E. DEFECTS IN THE PACKAGING OR IN THE CONTAINER
- 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:
(4) The character of the goods or defects in the packing or in the containers
- 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.
1. REGIONAL CONTAINER LINES OF SINGAPORE V. NETHERLANDS
INSURANCE CO. INC
- Article 1734, particularly paragraphs 3 and 4 thereof, which exempts the
carrier from liability for loss or damage to the cargo when it is caused either
by an act or omission of the shipper or by the character of the goods or
defects in the packing or in the containers
2. PHILLIPPINE CHARTER INSURANCE CORPORATION V. UNKNOWN OWNER
OF M/V NATIONAL HONOR
- To exculpate itself from liability for the loss/damage to the cargo under any
of the causes, the common carrier is burdened to prove any of the
aforecited causes claimed by it by a preponderance of evidence. If the
carrier succeeds, the burden of evidence is shifted to the shipper to prove
that the carrier is negligent.
3. CALVO V. UCPB GENERAL INSURANCE
- Art. 1734(4) For this provision to apply, the rule is that if the improper
packing or, in this case, the defect/s in the container, is/are known to the
carrier or his employees or apparent upon ordinary observation, but he
nevertheless accepts the same without protest or exception
notwithstanding such condition, he is not relieved of liability for damage
resulting therefrom. In this case, petitioner accepted the cargo without
exception despite the apparent defects in some of the container vans.
Hence, for failure of petitioner to prove that she exercised extraordinary
diligence in the carriage of goods in this case or that she is exempt from
liability, the presumption of negligence as provided under Art. 1735 holds.
F. ACTS OF PUBLIC AUTHORITY
- 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:
(5) Order or act of competent public authority
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- 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.
1. GANZON V. CA
- For Art. 1735 of the Civil Code, conversely stated, means that 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. Be that as it may, insofar as Art. 362 appears to
require of the carrier only ordinary diligence, the same is deemed to have
been modified by Art. 1733 of the Civil Code.
G. EXTRAORDINARY DILIGENCE
1. REPUBLIC VS LORENZO SHIPPING CORPORATION
- 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. 9 This exacting standard imposed
on common carriers in a contract of carriage of goods is intended to tilt the
scales in favor of the shipper who is at the mercy of the common carrier
once the goods have been lodged for shipment. Hence, in case of loss of
goods in transit, the common carrier is presumed under the law to have
been at fault or negligent.
2. DE GUZMAN V. CA
- It is important to point out that the above list of causes of loss, destruction
or deterioration which exempt the common carrier for responsibility
therefor, is a closed list. Causes falling outside the foregoing list, even if they
appear to constitute a species of force majeure, fall within the scope of
Article 1735, which provides as follows: "In all cases other than those
mentioned in numbers 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
H. FORTUITOUS EVENTS
1. CASUS FORTUITOS NEMO PRESTAT; IMPOSSIBILUM NULLA OBLIGATIO EST
2. DE GUZMAN V. CA
- It is important to point out that the above list of causes of loss, destruction
or deterioration which exempt the common carrier for responsibility
therefor, is a closed list. Causes falling outside the foregoing list, even if they
appear to constitute a species of force majeure, fall within the scope of
LYKADENNESE
Article 1735, which provides as follows: "In all cases other than those
mentioned in numbers 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.
3. GANZON V. CA
- The mere difficulty in the fulfillment of the obligation is not considered force
majeure.
4. BASCOS V. CA
- To exculpate the carrier from liability arising from hijacking, he must prove
that the robbers or the hijackers acted with grave or irresistible threat,
violence, or force. This is in accordance with Article 1745 of the Civil Code
which provides: "Art. 1745. Any of the following or similar stipulations shall
be considered unreasonable, unjust and contrary to public policy . . . (6) That
the common carrier's liability for acts committed by thieves, or of robbers
who do not act with grave or irresistible threat, violences or force, is
dispensed with or diminished"; In the same case, the Supreme Court also
held that: "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 of irresistible threat,
violence of 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
5. LOADMASTERS CUSTOMS SERVICES V. GLODEL BROKERAGE CORP
- In case of loss of the goods, the common carrier is presumed to have been
at fault or to have acted negligently. 17 This presumption of fault or
negligence, however, may be rebutted by proof that the common carrier has
observed extraordinary diligence over the goods
6. TORRES-MADRID BROKERAGE V.FEB MITSUI MARINE INSURANCE
- Simply put, the theft or the robbery of the goods is not considered a
fortuitous event or a force majeure. Nevertheless, a common carrier may
absolve itself of liability for a resulting loss: (1) if it proves that it exercised
extraordinary diligence in transporting and safekeeping the goods; or (2) if
it stipulated with the shipper/owner of the goods to limit its liability for the
loss, destruction, or deterioration of the goods to a degree less than
extraordinary diligence.
- However, a stipulation diminishing or dispensing with the common carrier's
liability for acts committed by thieves or robbers who do not act with grave
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or irresistible threat, violence, or force is void under Article 1745 of the Civil
Code for being contrary to public policy
7. SERVANDO V. PHILIPPINE STEAM NAVIGATION
- 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(Law II, Title 33, Partida 7), the antecedent of Article 1174 of the
Civil Code, defines "caso fortuito" as "an event that takes place by accident
and could not been have foreseen. Examples of this are destruction of
houses, unexpected fire, shipwreck, violence of robbers.
I. PARTIAL DEFENSE: SHIPPER/CONSIGNEE’S CONTRIBUTORY FAULT OR
NEGLIGENCE
1. TABACALERA INSURANCE CO. V. NORTH FRONT SHIPPING SERVICES, INC
- Moreover, the shipping company had no more control and responsibility
over the goods after they were deposited in the customs warehouse by the
arrastre and stevedoring operator. No amount of extraordinary diligence on
the part of the carrier could have prevented the loss of the goods by fire
which was of accidental origin. The consignee should bear the loss which
was due to a fortuitous event.
2. COMPANIA MARITAMA V.COURT OF APPEALS
- Corollary is the rule that mere proof of delivery of the goods in good order
to a common carrier, and of their arrival at the place of destination in bad
order, makes out prima facie case against the common carrier, so that if no
explanation is given as to how the loss, deterioration or destruction of the
goods occurred, the common carrier must be held responsible. Otherwise
stated, it is incumbent upon the common carrier to prove that the loss,
deterioration or destruction was due to accident or some other
circumstances inconsistent with its liability.
III. COMMENCEMENT DURATION AND TERMINATION OF CARRIER’S
RESPONSIBILITY OVER THE GOODS
- 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.
LYKADENNESE
- 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.
UNCONDITIONALLY PLACED IN THE POSSESSION OF AND RECEIVED BY THE
CARRIER
1. COMPANIA MARITAMA V. INSURANCE CO OF NORTH AMERICA
- Where the shipper delivered the cargo to the carrier and the latter took
possession thereof by placing it on a lighter or barge manned by its
authorized employees, it is held that there existed a complete contract of
carriage the consummation of which had already begun
2. GANZON V. CA
- 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 determination 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. 5 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
BILL OF LADING AS EVIDENCE OF DELIVERY TO THECARRIER
1. SALUDO V. COURT OF APPEALS
- Logically, since a bill of lading acknowledges receipt of goods to be
transported, delivery of the goods to the carrier normally precedes the
issuance of the bill; or, to some extent, delivery of the goods and issuance
of the bill are regarded in commercial practice as simultaneous acts.
However, except as may be prohibited by law, there is nothing to prevent
an inverse order of events, that is, the execution of the bill of lading even
prior to actual possession and control by the carrier of the cargo to be
transported. There is no law which requires that the delivery of the goods
for carriage and the issuance of the covering bill of lading must coincide in
point of time or, for that matter, that the former should precede the latter.
Ordinarily, a receipt is not essential to a complete delivery of goods to the
carrier for transportation but, when issued, is competent and prima facie,
but not conclusive, evidence of delivery to the carrier. A bill of lading, when
properly executed and delivered to a shipper, is evidence that the carrier
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has received the goods described therein for shipment. Except as modified
by statute, it is a general rule as to the parties to a contract of carriage of
goods in connection with which a bill of lading is issued reciting that goods
have been received for transportation, that the recital being in essence a
receipt alone, is not conclusive, but may be explained, varied or
contradicted by parol or other evidence
TEMPORARY UNLOADING AND STORAGE IN TRANSITU
- Storage in transit occurs whenever goods must be temporarily stored before
being unloaded at the final destination.
- The stopping of freight traffic at a point located between the point or origin
and destination to be stored and forwarded at a later date.
1. EFFECTOF STOPPAGE IN TRANSITU
- Explicit is the rule under Article 1736 of the Civil Code that the extraordinary
responsibility of the common carrier begins from the time the goods are
delivered to the carrier. This responsibility remains in full force and effect
even when they are temporarily unloaded or stored in transit, unless the
shipper or owner exercises the right of stoppage in transitu, and terminates
only after the lapse of a reasonable time for the acceptance of the goods by
the consignee or such other person entitled to receive them. And, there is
delivery 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. Where such a delivery has thus been accepted by the carrier, the
liability of the common carrier commences eo instant.
ACTUAL OR CONSTRUCTIVE DELIVERY
- Actual Delivery: Also known as physical delivery, actual delivery takes place
when the goods are physically handed over by the seller or his/her
authorized agent to the buyer or his/her agent authorized to take
possession of the goods.
- Constructive Delivery: In this case neither physical nor symbolic delivery is
made. In constructive delivery the individual possessing the products
recognizes that he holds the merchandise for the benefit of, and at the
disposal of the purchaser. Constructive delivery is also called attornment
A. TO THE CONSIGNEE
1. FEDERAL EPRESS CORP V. ANTONINO
- The duty of common carriers to observe extraordinary diligence in shipping
goods does not terminate until delivery to the consignee or to the specific
person authorized to receive the shipped goods. Failure to deliver to the
person authorized to receive the goods is tantamount to loss of the goods,
thereby engendering the common carrier's liability for loss. Ambiguities in
LYKADENNESE
contracts of carriage, which are contracts of adhesion, must be interpreted
against the common carrier that prepared these contracts
B. TO THE PERSON WHO HAS THE RIGHT TO RECEIVE THE CARGO
1. LU DO & LU V. BINAMIRA
- While 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" contemplated
in Article 1736 of the New Civil Code, 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 go through the inspection of the
customs authorities before they are actually turned over to the consignee.
This is a situation where the carrier loses control of the goods because of a
custom regulation and it is unfair that it be made responsible for any loss or
damage that may be caused to the goods during the interregnum.
2. NEDLLOYD LIJNEN B.V ROTTERDAM V. GLOW LAKS ENTERPRISES
- the contract of carriage remains in full force and effect even after the
delivery of the goods to the port authorities; the only delivery that releases
it from their obligation to observe extraordinary care is the delivery to the
consignee or his agents. Even more telling of petitioners' continuing liability
for the goods transported to the fact that the original bills of lading up to
this time, remains in the possession of the notify party or consignee. Explicit
on this point is the provision of Article 353 of the Code of Commerce
3. MACAM V. CA
- The Court emphasizes that the extraordinary responsibility of the common
carriers lasts until actual or constructive delivery of the cargoes to the
consignee or to the person who has a right to receive them
C. DELIVERY TO THE CONSIGNEE WITHOUT SURRENDER OF BILL OF LADING
1. DESIGNER BASKETS, INC V. AIR SEA TRASPORT, INC
- the surrender of the bill of lading is not an absolute and mandatory
requirement for the release of the goods to the consignee. The fact that the
carrier is given the alternative option to simply require a receipt for the
goods delivered suggests that the surrender of the bill of lading may be
dispensed with when it cannot be produced by the consignee for whatever
cause
D. CUSTODY OVER CARGO DURING UNLOADING
1. REGIONAL CONTAINER LINES V. NETHERLANDS INSURANCE CO
- It is settled in maritime law jurisprudence that cargoes while being unloaded
generally remain under the custody of the carrier
2. PHILIPPINES FIRST INSURANCE CO. V. WALLEM PHILS SHIPPING
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- It is settled in maritime law jurisprudence that cargoes while being unloaded
generally remain under the custody of the carrier. In the instant case, the
damage or losses were incurred during the discharge of the shipment while
under the supervision of the carrier. Consequently, the carrier is liable for
the damage or losses caused to the shipment.
E. DUTY TO SHIP V. DUTY TO TRANSIT
1. SAMAR MINING CO., INC V. NORDUETSCHER LLOYD
- Article 1736 is applicable to the instant suit. Under said article, the carrier
may be relieved of the responsibility for loss or damage to the goods upon
actual or constructive delivery of the same by the carrier to the consignee,
or to the person who has a right to receive them. In sales, actual delivery
has been defined as the ceding of corporeal possession by the seller, and
the actual apprehension of corporal possession by the buyer or by some
person authorized by him to receive the goods as his representative for the
purpose of custody or disposal. By the same token, 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. The court a quo found that there was
actual delivery to the consignee through its duly authorized agent, the
carrier. It becomes necessary at this point to dissect the complex
relationship that had developed between appellant and appellee in the
course of the transactions that gave birth to the present suit. Two
undertakings appeared embodied and/or provided for in the Bill of Lading
in question. The first is FOR THE TRANSPORT OF GOODS from Bremen,
Germany to Manila. The second, THE TRANSSHIPMENT OF THE SAME
GOODS from Manila to DAVAO, with appellant acting as agent of the
consignee. At the hiatus between these two undertakings of appellant which
is the moment when the subject goods are discharged in Manila, its
personality changes from that of carrier to that of agent of the consignee.
Thus, the character of appellant's possession also changes, from possession
in its own name as carrier, into possession in the name of consignee as the
latter's agent. Such being the case, there was, in effect, actual delivery of
the goods from appellant as carrier to the same appellant as agent of the
consignee. Upon such delivery, the appellant, as erstwhile carrier, ceases to
be responsible for any loss or damage that may befall the goods from that
point onwards.
IV. STIPULATIONS LIMITING CARRIER’S LIABILITY
- Article 1744. A stipulation between the common carrier and the shipper or
owner limiting the liability of the former for the loss, destruction, or
LYKADENNESE
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.
MINIMUM DEGREE OF DILIGENCE REQUIRED
- degree less than extraordinary diligence
VOID STIPULATIONS
- ARTICLE 1745
1. SWEET LINES V. TEVES
- he validity or enforceability of contracts of adhesion are to be determined
by the peculiar circumstances obtaining in each case and the nature and
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conditions or terms sought to be enforced. For, while generally, stipulations
in a contract come about after deliberate drafting by the parties thereto, in
a contract of adhesion, however, all its provisions have been drafted only by
one party, usually a corporation, and the only participation of the other
party is the signing of his signature or his adhesion thereto
- The Court may declare the agreement as to venue to be in effect contrary
to public policy, — despite that in general, changes and transfers of venue
by written agreement of the parties are allowable — whenever it is shown
that a stipulation as to venue works injustice by practically denying to the
party concerned designated by the rules
A. REASONABLE TIME IN DELIVERY OF GOODS (MAERSK LINE V.CA)
- The oft-repeated rule regarding a carrier's liability for delay is that in the
absence of a special contract, a carrier is not an insurer against delay in
transportation of goods. When a common carrier undertakes to convey
goods, the law implies a contract that they shall be delivered at destination
within a reasonable time, in the absence, of any agreement as to the time
of delivery. But where a carrier has made an express contract to transport
and deliver property within a specified time, it is bound to fulfill its contract
and is liable for any delay, no matter from what cause it may have arisen.
This result logically follows from the well-settled rule that where the law
creates a duty or charge, and the party is disabled from performing it
without any default in himself, and has no remedy over, then the law will
excuse him, but where the party by his own contract creates a duty or
charge upon himself, he is bound to make it good notwithstanding any
accident or delay by inevitable necessity because he might have provided
against it by contract. Whether or not there has been such an undertaking
on the part of the carrier is to be determined from the circumstances
surrounding the case and by application of the ordinary rules for the
interpretation of contracts
B. LIMITATION ON THE AMOUNT OFLIABILITY
- ARTICLE 1749
- ARTICLE 1750
1. AD VALOREM
- in proportion to the estimated value of the goods or transaction concerned.
- a tax whose amount is based on the value of a transaction or of property. It
is typically imposed at the time of a transaction
2. YSMAEL V. BARRETO
- A common carrier cannot lawfully stipulate for exemption from liability,
unless such exemption is just and reasonable and the contract is freely and
fairly made
LYKADENNESE
- By the weight of modern authority, the carrier cannot limit its liability for
injury to or loss of goods shipped where such injury or loss was caused by
its own negligence.
- The rule rests on consideration of public policy, as the contract of the carrier
is to carry and deliver the goods, and a contract that undertakes to relieve
the carrier from any liability for loss or damage accruing or arising from its
own negligence would in legal effect nullify the contract
3. SHEWARAM V. PHILIPPINE AIRLINES
- Under the provisions of Article 1750 of the new Civil Code, the pecuniary
liability of a common carrier may, by contract, be limited to a fixed amount.
It is required, however, that the contract must be reasonable and just under
the circumstances and has been fairly and freely agreed upon. In the instant
case, the fact that the conditions are printed at the back of the ticket stub
in letters so small that they are hard to read would not warrant the
presumption that the appellee was aware of those conditions such that he
had "fairly and freely agreed" to those conditions. Appellee, therefore, is not
and cannot be bound, by the conditions of carriage found at the back of the
ticket stub issued to him when he made the flight on appellant's plane.
4. ONG YIU V. CA
- a contract limiting liability upon an agreed valuation does not offend against
the policy of the law forbidding one from contracting against his own
negligence
5. SEA LAND SERVICES INC. V. CA
- There can be no doubt or equivocation about the validity and enforceability
of freely-agreed-upon stipulations in a contract of carriage or bill of lading
limiting the liability of the carrier to an agreed valuation unless the shipper
declares a higher value and inserts it into said contract or bill. This pro-
position, moreover, rests upon an almost uniform weight of authority.
6. CITADEL LINES INC V. CA
- But over and above that consideration, the just and reasonable character of
such stipulation is implicit in it giving the shipper or owner the option of
avoiding accrual of liability limitation by the simple and surely far from
onerous expedient of declaring the nature and value of the shipment in the
bill of lading. And since the shipper here has not been heard to complain of
having been 'rushed,' imposed upon or deceived in any significant way into
agreeing to ship the cargo under a bill of lading carrying such a stipulation
— in fact, it does not appear that said party has been heard from at all
insofar as this dispute is concerned — there is simply no ground for
assuming that its agreement thereto was not as the law would require,
freely and fairly sought and given
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7. EVERETTSTEAMSHIP CORP. V.CA
- A stipulation in the bill of lading limiting the common carrier's liability for
loss or destruction of a cargo to a certain sum, unless the shipper or owner
declares a greater value, is sanctioned by law, particularly Articles 1749 and V.
1750 of the Civil Code. Such limited-liability clause has also been consistently
upheld by this Court in a number of cases
- Pursuant to the afore-quoted provisions of law, it is required that the
stipulation limiting the common carrier's liability for loss must be
"reasonable and just under the circumstances, and has been freely and fairly
agreed upon
8. BRITISH AIRWAYS V.CA
- Admittedly, in a contract of air carriage a declaration by the passenger of a
higher value is needed to recover a greater amount. (Article 22[1] of the
Warsaw Convention). American jurisprudence provides that an air carrier is
not liable for the loss of baggage in an amount in excess of the limits
specified in the tariff which was filed with the proper authorities, such tariff
being binding on the passenger regardless of the passenger's lack of
knowledge thereof or assent thereto. This doctrine is recognized in this
jurisdiction. Notwithstanding the foregoing, we have, nevertheless, ruled
against blind reliance on adhesion contracts where the facts and
circumstances justify that they should be disregarded
9. H.E HEACOCK CO V. MACONDRAY & CO
- Three kinds of stipulation have often been made in a bill of lading. The first
is one exempting the carrier from any and all liability for loss or damage
occasioned by its own negligence. The second is one providing for an
unqualified limitation of such liability to an agreed valuation. And the third
is one limiting the liability of the carrier to an agreed valuation unless the
shipper declare a higher value and pays a higher rate of freight. According
to an almost uniform weight of authority, the first and second kinds of
stipulations are invalid as being contrary to public policy, but the third is
valid and enforceable
- A stipulation in a bill of lading which either exempts the carrier from liability
for loss or damage occasioned by its negligences or provides for an
unqualified limitation of such liability to an agreed valuation, is invalid as
being contrary to public policy
- But a stipulation in such bill of lading which limits the liability of the carrier
to a specified amount unless the shipper declares a higher value and pays a
higher rate of freight, is valid and enforceable. Thus, if a common carrier
gives to a shipper the choice of two rates, the lower of them conditioned
upon his agreeing to a stipulated valuation of his property in case of loss,
LYKADENNESE
even by the carrier's negligence, if the shipper makes the choice
understandingly and freely, and names his valuation, he cannot thereafter
recover more than the value which he thus places upon his property
PASSENGER’S BAGGAGES
- 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.
A. CHECKED IN VS. HAND CARRIED BAGGAGES
- CHECKED IN – those that are delivered to the carrier
- HAND CARRIED- those that are in the custody of passenger
B. QUISIMBING SR. V.CA
- failure to take certain steps that a passenger in hindsight believes should
have been taken is not the negligence or misconduct which mingles with
force majeure as an active and cooperative cause
C. PAN AMERICAN AIRLINES V. RAPADAS
- Since the checking-in was against the will of the respondent, we treat the
lost bag as partaking of involuntarily and hurriedly checked-in luggage and
continuing its earlier status as unchecked luggage
D. BRITISH AIRWAYS V. CA
- In the instant case, it is apparent that the contract of carriage was between
Mahtani and BA. Moreover, it is indubitable that his luggage never arrived
in Bombay on time. Therefore, as in a number of cases we have assessed the
airlines' culpability in the form of damages for breach of contract involving
misplaced luggage
- The nature of an airline's contract of carriage partakes of two types, namely:
a contract to deliver a cargo or merchandise to its destination and a contract
to transport passengers to their destination. A business intended to serve
the travelling public primarily, it is imbued with public interest, hence, the
law governing common carriers imposes an exacting standard. Neglect or
malfeasance by the carrier's employees could predictably furnish bases for
an action for damages.
E. ALITALIA V. INTERNATIONAL APPELLATE COURT
- Warsaw Convention also purports to limit the liability of the carriers in the
following manner:
1. In the carriage of passengers the liability of the carrier for each passenger
is limited to the sum of 250,000 francs . . . Nevertheless, by special contract,
the carrier and the passenger may agree to a higher limit of liability. LLjur
2. a) In the carriage of registered baggage and of cargo, the liability of the
carrier is limited to a sum of 250 francs per kilogramme, unless the
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passenger or consignor has made, at the time when the package was handed
over to the carrier, a special declaration of interest in delivery at destination
and has paid a supplementary sum if the case so requires. In that case the
carrier will be liable to pay a sum not exceeding the declared sum, unless he
proves that sum is greater than the actual value to the consignor at delivery.
b) In the case of loss, damage or delay of part of registered baggage or cargo,
or of any object contained therein, the weight to be taken into consideration
in determining the amount to which the carrier's liability is limited shall be
only the total weight of the package or packages concerned. Nevertheless,
when the loss, damage or delay of a part of the registered baggage or cargo,
or of an object contained therein, affects the value of other packages
covered by the same baggage check or the same air way bill, the total weight
of such package or packages shall also be taken into consideration in
determining the limit of liability.
3. As regards objects of which the passenger takes charge himself the
liability of the carrier is limited to 5000 francs per passenger.
4. The limits prescribed . . shall not prevent the court from awarding, in
accordance with its own law, in addition, the whole or part of the court costs
and of the other expenses of litigation incurred by the plaintiff. The
foregoing provision shall not apply if the amount of the damages awarded,
excluding court costs and other expenses of the litigation, does not exceed
the sum which the carrier has offered in writing to the plaintiff within a
period of six months from the date of the occurrence causing the damage,
or before the commencement of the action, if that is later

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