Transportation Law

Topics

1. Common carrier vs. private carrier

a. To determine the applicable law
b. The diligence required
c. The burden of proof applicable
2. Chartering arrangements (Time/Voyage Charter vs. bareboat or demise)
a. T/V Charter remain public or common carrier (remains to be a common carrier)
b. BB/demise – vessel becomes private carrier (will convert into a private arrangement, not
considered as common carrier)
3. Contributory negligence
4. Extraordinary diligence
5. Doctrine of last clear chance
6. Doctrine of inscrutible fault
7. Kabit system
8. Boundary system
9. Warsaw convention
10. COGSA

Common Carriers

Who is a common carrier?

- Art. 1732 provides the definition

Who is a private carrier?

On who without making the activity a vocation, or without holding himself or itself out to the public as ready to act
for all who may desire his or its services, undertakes by special agreement in a particular instance only, to transport
goods or persons from one place to another either gratuitously or for hire. (Sps. Teodoro and Nanette Perana vs. Sps.
Nicolas and Teresita Zarate)

Common carrier vs. Private Carrier

- Law that governs

- The diligence required
o Common carrier required to observe extraordinary diligence
 Presumed to be at fault or to have acted negligently in case of the loss or death
o Private Carrier
 Only ordinary diligence

What is the test to determine if the carrier is a common carrier?

- The test to determine a common carrier is whether the given undertaking is a part of the business engaged
in buy the carrier which he has held out to the general public as his occupation rather than the quantity or
extent of the business transacted. (Asia lighterage vs. CA)
- 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 asser when charged with the duties and
obligations that the law imposes (Sps. Teodoro and Perana vs. Sps. Nicolas and Zarate)

Why is it necessary to determine is the party is a common carrier?

- The law applicable to the case

- Standard of diligence required of the carrier; and
 - Burden of proof applicable to the case (National Steel Corp. vs. CA)

Can common carrier convert into a private carrier by virtue of the time charter party agreement?

- YES

Is the term common carrier limited to vehicles or vessels in land, sea or air?

- NO (Pipleline may be considered as common carrier)

Common carriers:

- Pipeline operators
- Sole proprietors (panghakot ng scrap materials)
- Barge operators are common carriers
- A resorts owner offering tour package-contract which includes ferry services for guests is a common carrier

Can parties agree to lessen the diligence the common carrier can observe?

- NO (Erena Case)

Can a common carrier be held liable for the death of a passenger whose death was caused by another passenger?

- NO (GV Florida case)

What should a common carrier do to avid liability for the death or injury to a passenger?

- That the carrier exercised extra-ordinary diligence

What is contributory negligence?

- Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm
he has suffered, which falls below the standard to which he is required to conform….

Negligence: driver of bus that bumped jeepney or driver of jeepney that was traversing a road out of its allowed
route?

- Both are negligent

- It is apparent that the proximate cause of the accident is the passenger bus with contributory negligence of
the jeepney driver.
- The jeepney driver violated his franchise by travelling along an unauthorized route and that the jeepney
was overloaded with passengers, and the deceased passenger was clinging at the back thereof. (Travel &
Tours Case)

What is the doctrine of last clear chance?

- Both parties negligent, but the one who has the last clear opportunity to avoid the loss will be liability.
(Sealoader case)

Can the common carrier use the doctrine of last clear chance against its passenger?

- NO, the principle is applicable only in a suit between the owner and driver of colliding vehicles.

Certificate of public convenience is not required to hold common carriers liable.

What is registered owner rule?

- Its main aim is to identify the owner so that if any accident happens, or that any damage or injury is cause
by the vehicle on the public highways, responsibility therefor can be fixed on a definite individual, the
registered owner.
Registered owner is directly and primarily liable to the person while the motor vehicle is being operated.

When does contract of carriage begin?

- By stepping and standing in the platform of the bus, is already considered a passenger and is entitled to all
rights and protection pertaining to contract of carriage.

When does it end?

- Continues until the passenger has been landed at the port of destination and has left the vessel owners dock
or premises.

What is right of way? (Larry Caminos Case)

Who has the right of way between an aircraft taxiing or aircraft taking off or about to take off?

- Aircraft taxiing on the maneuvering area of an aerodrome shall give way to aircraft taking off or about to
take off. (PAL vs. Pacific airways corporation)

Kabit System?

- An arrangement whereby a person who has been granted a certificate of public convenience allows another
person who owns motor vehicles to operate under such franchise for a fee
- Is it legal?
o Although not penalized outright as a criminal offense, but it is invariably recognized as being
contrary to public policy and, therefore, void and inexistent under Art. 1409 of the CC. it is an
abuse of a certificate of public convenience, which is a special privilege granted by the
government. (Teja Marketing vs. IAC)
- Rationale?
o 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 possess no
property with which to respond financially for damage done. (Santos vs. Sibug)
- Liability in case of liability?
o Although the registered owner is always liable, nevertheless the actual operator can be held
solidarily liable with the owner as a joint tortfeasor. (Jereos vs. CA)
o Rationale
 Public policy
 The kabit operator and the owner should not profit from their personal arrangement at the
expense of the riding public
- Can it be used to avoid liability?
o No, because the thrust of the law in enjoining the kabit system is not to penalize the parties but to
identify the party upon whom responsibility may be fixed in case of accident. It is for the
protection of the public. (Abelardo Lim vs. CA)

Boundary System?

- An arrangement whereby the registered owner of a vehicle allows another person to operate it as a common
carrier under a lease arrangement between, and thereby avoiding the establishment of either an employer-
employee relationship or that of a principal-agent relation.
o The driver is deemed to be an employee of the operator.
o in the boundary system the driver as well as the operator is held liable. Whereas in a lease
agreement, the operator can easily avoid liability.
- Relationship
o EER
- Why not recognized?
 o Because it seeks to exempt the purported owner-lessor from the solidarily liability imposed by the
CC
- Who is liable in case of accident?
o Both, the driver and operator shall be solidarily liable.

Maritime Commerce

- Is COGSA applicable in the Philippines?

o YES.
- When applicable?
o Shall apply to every contract of carriage of goods by sea, the carrier in relation to the loading,
handling, stowage carriage, custody, care and discharge of such goods shall be subject to
responsibilities.
- When will COGSA operation end?
o From the time when the goods have been discharged from the ship and given to the custody of the
arrastre operator.
- If there is/are damage/s on the goods, is notice required? If yes, when should it be given?
o Complain directly on the shipper.
o If the damage is apparent, do not delay. At the very moment complain.
o Yes, notice is required, notice of loss or damages must be filed within 3 days of delivery if
damage is not apparent.
o If apparent, you must complain immediately
- Prescriptive period?
o Within 1 year from the delivery of the goods or the date when the goods should have been
delivered.
 If no action is made, then the carrier is discharged from liability
- Who may avail of the defense of prescription
o Both the carrier and the ship may put up the defense of prescription if the action for damages is
not brought within 1 year after the delivery of the goods or the date when the goods should have
been delivered.
- Relationship of arrastre operator and consignee?
o Akin to then between of a warehouseman and….
o Arrastre operator cannot invoke the prescriptive period of 1 year.
- Prescriptive period can agree on extending the prescriptive period.
o The 1 year is only the minimum period the law requires.
- Is there such thing as a package limitation rule under COGSA?
o Yes, the COGSA supplements the CC by establishing a provision limiting the carriers liability in
the absence of a shipper’s declaration of a higher value in the bill of lading.
o 500$ is the maximum if you did not declare anything.
- Is a stipulation limiting the carriers liability allowed in COGSA?
o Yes, allowed under 1749 of the civil code.
- If the goods are damaged or has deteriorated without proper explanation, who will be liable?
o If no adequate explanation is given as to how the loss happened, then the carrier is held liable.

Bill of Lading?

- The official document prepared by the carrier duly accepting the goods for shipment containing
information like item, quantity, value, vessel, details, date, port, consigner, consignee etc.
o It is a contract by itself.
o It is a written acknowledgement of the receipt of the goods and an agreement to transport the
goods
- 3-fold character of bill of lading
 o A receipt for the goods delivered to the carrier for shipment.
o A definition of the contract of carriage of the goods.
o It is a document of title to the goods described therein.
o It is also a document of transfer, but not a negotiable instrument in the legal sense.
o It binds the carrier to its terms, irrespective of who the actual holder is.
- Will the release by common carrier of the goods to the consignee even without the surrender of the bill of
lading wrong?
o The surrender of the original bill of lading is not absolute. (designer baskets vs. air sea transport)

Bareboat Charter

- An arrangement for the chartering or hiring of a ship or boat, whereby no crew or provisions are included
as part of the agreement; instead, the people who rent the vessel from the owner are responsible for taking
care of such things.
- Differs in Voyage or time charter, the charterer can direct where the ship will go but the owner of the ship
retains possession of the shop through its employment of the master and crew.

Warsaw convention

- Applicable to the Philippines on February 9, 1951

- Covers only those issues relating to air travel.
- Applies to all international carriage of persons, luggage or goods performed by aircraft for reward. Does
not apply to private gratuitous carriage.
- Is claim for damages due to humiliated caused by airline employees covered by the convention?
o No, there should be a distinction between the 1. Damage to the passenger’s baggage and 2.
Humiliation he suffered at the hands of the airlines employees. The first cause of action was
covered by the warsaw convention which prescribes in 2 years, while the second was covered by
the provisions of the civil code on torts which prescribes in 4 years.
- Is the negligent act of the airline in not informing the passenger of the cancellation of her flight covered by
the convention?
o No, it did not occur during the performance of carriage.
- Prescription?
o 2 years reckoned from the date of the arrival on the destination.
- Is there a notice requirement?
o Yes
- Bump offs (removal of passenger like united airline case in US)?
o The passenger can hold the airline company liable for damages.
o Airlines are allowed to book exceeding 10%
o Would the airline be liable for bumping off passengers to higher accommodation?
 Yes! bumping off applies also to giving the passengers better accommodation.
- Overbooking?
o If it exceeds 10% then presumed bad faith.
- Lex Loci Contractus
o As a rule, the law of the place where a contract is made or entered into governs with respect to its
nature and validity, obligation and interpretation.