POINTERS TRANSPO

Art. 1732- what is a common carrier

Elements:

1. A common carrier is either a person, corporation, partnership, etc (a legal entity)

2. Entity is engaged in business
3. The business must involve transporting passengers or goods or both. (May be a full time or
ancillary business)
4. The transpoportation passes thru carrier by land, water, or air (it does not require use of
motorized vehicle nor wheels)
5. The activity of transportation is being done for compensation or profit. (not for free)
6. Service is offered to the public.

Relevant points to consider if we are dealing with a CC

1. Degree of diligence

Highest degree; extraordinary diligence

- Once an accident happened, the CC is presumed negligent. The person injured (passenger)
needs to prove:
a. There is contract of carriage
b. Prove damage or loss

The only way CC may escape liability if he was able to prove that he exercised extraordinary
diligence or there was unforeseen circumstance.

2. Determine WoN there was negligence on the part of the private car

Ex.

Bus A hit bus B, bothe have passengers

- Culpa contractual against the transpo company

Bus B would involve culpa aquiliane- if there was negligence on the part of B and it is the proximate
cause of the damage/loss

May file a criminal case against driver of Bus A.

Reckless imprudence – personal liability

If the driver cannot pay, they may hold CC with subsidiary liability

Article 1734

- With respect to natural calamity:

A common carrier needs to prove that they were able to exercise extraordinary diligence
together with the natural calamity
Contributory negligence

1. Negligence on the part of the passenger

2. Stretching out your arm in the bus

Effect of contributory negligence –

GR: at best can mitigate the liability

XPN: If it is the proximate cause of the damage, it exculpates the common carrier.

Proximate cause: Proximate cause is defined as that which, in the natural and continuous sequence,
unbroken by any efficient, intervening cause, produces the injury, and without which the result would
not have occurred

ELEMETS TO CLAIM DAMAGE BASED ON BREACH OF CULPA CONTRACTUAL:

1. Contract of carriage
2. Injury or damage (hospital bills, surgery, loss of income, moral damages such as ptsd)

Is proximate cause critical in contributory negligence?

Not necessarily, only if the proximate cause is caused by the victim.

LAST CLEAR CHANCE APPLICABILITY (ONLY IN CULPA EXTRA CONTRACTUAL)

1. Both are negligent, the one who has the last clear opportunity to avoid damage shall bear the
loss.
2. Both are negligent, no proximate cause.

KABIT SYSTEM

Certificate of Public Convenience – prangkisa ng LTO (can be one or more)

The extra slot in franchise given to another is the “kabit”

Use of franchise

The operator will be the owner of the franchise

REGISTERED OWNER RULE – whoever is the registered owner cannot escape liability

BOUNDARY SYSTEM

There is an employee-employer relationship

WEEK 5.

Death indemnity – whenever death arises in a contract of carriage, automatically awarded. 3k in civil
code, 50k jurisprudence (80’s), around 2000’s above 50k (80k), highest 100k

High Contracting Party – Countries signatory to the Convention

REMEDIES UNDER WARSAW CONVENTION (AMOUNTS PRESCRIBED) – These are not exclusive. In this
jurisdiction, bad faith, bismerchment, maltreatment, and the likes are taken into consideration for
awarding of damages.

MONTREAL CONVENTION – Supersedes Warsaw Convention

- Venue of action is the same (Domicile, principal place of business, where the contract was
made, place of the destination; at the option of the plaintiff)
- 2 years prescription from the date of arrival
o Condition precedent- there has to be a claim filed with the common carrier 7 days
from the receipt of the baggage
 In case of delay- 21 days from the date of receipt of the baggage.
 In case of death or bodily injury- filing of complaint is not a condition
precedent in this case.
- Compensation system
o Currency: Special drawing rights

Force Majure as a defense:

- IN case of natural calamity, aside from such the common carrier needs to prove exercise of
extraordinary diligence still to overcome the presumption of negligence and be able to use
Force Majure as a defense.

Limitation of Liability pertaining to carriage of cargo

1. Limitation on responsibility
- A stipulation that provides for a lesser degree of diligence than extraordinary diligence
would be valid provided that the following requisites are present:
o The agreement is in writing
o There is valuable consideration received by the carrier
o The agreement is reasonable
 Look at 1745 (NCC)
 Does not apply to private carriers
o Once a transportation company is converted from CC to PC,
this will not apply.
o Ex. A ship was chartered by a passenger, and the charter is a
bare-boat charter (not only the ship but also the crew was
taken over)
2. Limitation on Liability per se
3 types of limitation on liability
a. Stipulation providing for no liability at all to the CC in the event of loss or damage to the
cargo
o This is a void stipulation for being contrary to public policy
b. Stipulation providing for limited liability

“only up to the amount of” stipulation – also a void stipulation for being a blanket
limitation on liability
 c. Qualified limitation on liability – valid
Such qualified stipulation limiting liability must be: (1) must be reasonable and
(2) freely and fairly agreed upon (no compulsion on the part of the passenger)

OVERSEAS TRADE (COGSA)

Carriage of Goods by Sea Act

1. Application – to transportation of goods by Sea (to and from the Philippines in International
trade)
 If within the Philippines only, Civil Code shall primarily apply and COGSA will only be
suppletory.
 ABROAD TO PHILIPPINES COGSA WILL NOT APPLY BUT THE CIVIL CODE (The law on the
country of destination shall apply principle)
2. Liability – if no value stated in the bill of lading, the maximum liability will only be 500$ per
package,
 If stated, apply the rule on qualified liability. (can claim more than)
3. Period to file claims – If the damage to the cargo is apparent (broken, perished, tampered) the
rule is that the owner of cargo shall file notice of claim with the CC immediately upon discharge
 If not apparent – within 3 days from delivery.
 IF CLAIM IS DENIED/UNSUCCESSFUL – Go after CC on the ground of CULPA CONTRACTUAL
 1 year from the delivery of goods or date the goods left port or date of delivery to the
arastre operator, whichever comes first.
 IF NO NOTICE OF COMPLAINT FILED WITH CC – It will not preclude the filing in court.
Notice in COGSA is not a condition precedent to file a CULPA CONTRACTUAL case.
 FOR DOMESTIC TRADE – the rule is:
i. If apparent – file immediately a notice of complaint
ii. If not apparent – file notice of complaint within 24 hours

WHAT IF REFUSED BY CC – can resort to the courts and file a culpa contractual case

Prescriptive period – if no bill of lading, period to file claim is 6 years from the time the
cause of action accrues. IF THERE IS A BILL OF LADING – 10 years from the time the
cause of action accrues

Cause of action accrues arises from the time the claim was denied by the CC

IF NOTICE WAS NOT FILED EARLIER- Notice of claim in domestic trade is a condition
precedent.

WHAT IS AN ARASTRE OPERATOR

- CORPORATION “INTERNATION CONTAINER TERMINAL SERVICES INCORPORATE”

o Entity engaged by the government to deliver services of an arastre operator in our
ports.
- The service: unload the cargoes from abroad to the Philippines and deliver the same to the
consignees or the owner of the goods.
- PARTIES: The Philippines through the BOC and the Arastre operator
 o Consignees are not parties to the contract (this stipulation are pour autrui) strangers
to the contract are bound by stipulation even if they are not parties to the contract
(they can claim the benefits)
- In management contract binds itself that they incur liabilities to the consignees and/or
importers if damages or loss incurred by the cargoes.
- ARASTRE OPERATORS APPLIES ONLY TO OVERSEAS TRADE
- important stipulation in a management contract in arastre
o Filing of formal claim
 IF ever there is damage or loss to the cargoes delivered by the arastre- must
be filed within 15 days from the date of final entry with the bureau of
customs
 Must be documented with proper invoices and proper shipping documents
 Arastre operators is given 60 days to act (deny or pay damages)
 IF denied – owner of the goods must file in court within 1 years
 If was not acted upon – 1 year must run from the date of the
expiration of the 60-day period to decide on the claim.
 THESE ARE CONDITION PRECEDENT
o Qualified Liability of the Arastre operator
 5K PHP per package unless the shipper declares a higher value

WHAT IS THE DEGREE OF DILIGENCE REQUIRED OF AN ARASTRE OPERATOR?

- The same as that of a warehouse man and a common carrier

o In short; extraordinary diligence.
- In most cases CC and Arastre are made jointly and severally liable for the damage or loss.

SOME IMPORTANT DESIGNATIONS IN COMMERCIAL TRANSACTIONS

Free On Board (FOB)

Free Alongside Ship (FAS)

- Same as to legal implications (FAS and FOB)

o Buyer pays for the cost of the freight/shipment
o Since it is the buyer who pays, the rule is once the goods delivered to the vessel, it is
deemed delivered to the buyer. (The vessel is deemed the agent of the buyer)
 Significance:
 Under FOB/FAS – ownership of the cargo passes from the seller to the buyer
once the goods the carrier
 RES PERIT DOMINO will apply (buyer will bear the loss)
 Insurable interest – the buyer obtains insurable interest over the goods.
 TAX Implication – Since goods were transferred to the buyer at the point of
origin (at the common carrier) the law considers it as a perfected sale, thus,
subject to sales tax.

Cost Insurance and Freight (CIS)

- It is the seller pays for the cost of crating, packaging, insurance, and the cost of the freight.
o Vessel is deemed agent of the seller
o Seller remains the owner of the goods during the entire voyage of the goods.
o Seller will assume the loss. (Res perit domino)
o Failure to exercise extraordinary diligence, seller can sue CC
o Seller obtains insurable interest
o Sales tax- will not be due in the Philippines since there is no delivery or transfer of
ownership yet. Only upon the goods reaching the point of destination when the sale
is perfected.