TRANSPORTATION LAW

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Preliminary concepts
Nature of transportation activity
- There is a contract of transportation when a person obligates himself to transport
persons or property from one place to another for a consideration.
- The contract may involve carriage of passengers or carriage of goods.
- The persons involved may be common carrier or private carrier.
- A contract of carriage is defined as one whereby a certain person or association of
persons obligate themselves to transport persons, things, or news from one place to
another for a fixed price.
Parties involved and the differing juridical relationships between and among them
- Carriage of Passengers
o Common Carrier
o Passenger – one who travels in a public conveyance by virtue of contract,
express or implied, with the carrier subject to payment of fare or an
equivalent thereof.
- Carriage of Goods
o Carrier
o Shipper – person who pays the consideration or on whose behalf payment is
made.
State regulation over transportation industry/business
Relevant sources of obligations (Civil Code)
-Contract
Art. 1159. Obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith.
- A contract is defined as “a meeting of the minds between two persons whereby one binds
himself, with respect to the other, to give something to render some service.”
- Obligatory Force of Contract – existence of a valid and enforceable contract
-Delict
Art. 1161. Civil obligations arising from criminal offenses shall be governed by the penal
laws.
- Every person criminally liable is also civilly liable.
- The rule is that when a criminal action is instituted, the civil action for the recovery of civil
liability arising from the offense charged is deemed instituted with the criminal action,
unless the offended party waives civil action, reserves the right to institute it separately or
institute the civil action prior to the criminal action.
-Quasi-delict
Art. 1162. Obligations derived from quasi-delicts shall be governed by this book and special
penal laws.
Quasi-delict is a legal institution distinct and separate from delict or crime. The requisites
must concur: damage suffered by the plaintiff; fault or negligence of the defendant; and
connection of cause and effect between the fault or negligence of defendant and the
damage incurred by the plaintiff.

Concept of common carrier

- Common Carriers are persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by land, water, air,
or air, for compensation, offering their services to the public. (Art. 1732, NCC).
Common carriage vs. private carriage

Common Carriers Private Carrier

As to Definition Common carriers are persons,
A private carrier is one who,
corporations, without
firms or associations engaged
making the activity a vocation,
in the or without
business of carrying or
holding himself or itself out to
transporting the public as
passengers or goods or both,
ready to act for all who may
by land, water, desire his or its
or air, for compensation, services, undertakes, by
offering their special agreement
services to the public. (Article
in a particular instance only,
1732, Civil to transport
Code) goods or persons from one
place to another
either gratuitously or for hire.
The
provisions on ordinary
contracts of the Civil
Code govern the contract of
private
carriage. (Perena v. Nicolas,
G.R. No.
157917, 29 August 2012)
As to Character of Undertaking is the transport Undertaking is a single
Business and conveyance of goods or transaction, not a part of a
persons from one place to general business or
another. occupation, although
involving the carriage of the
goods for a fee, the person or
corporation offering such
service is private carrier.

CASES:
 1. Pedro De Guzman vs. Court of Appeals, GR L-47822, 22 December 1988
FACTS:
Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used bottles
and scrap metal in Pangasinan. He utilized 2 six-wheeler trucks which he owned to transport
the materials to Manila. Upon return to Pangasinan, he would load with cargo which various
merchants wanted delivered in Pangasinan where he charged freight rates which were
commonly lower than regular commercial rates.
Petitioner Pedro De Guzman, merchant and authorized dealer of General Milk
Company, contracted with Respondent for the hauling of 750 cartos of milk from Makati to
Rizal; 150 cartos were loaded in the 1st truck driven by him, and 600 were loaded in the other
truck driven by Manuel Estrada (employee). The 2nd truck was hijacked somewhere in Tarlac,
hence, only 150 boxes were delivered.
Petitioner filed an action demanding payment of P22,150.00 against respondent
contending that as a common carrier, he failed to exercise extraordinary diligence required by
law. Respondent denied that he was a common carrier, and the loss was due to a force
majeure.
RTC Decision: Found private respondent to be a common carrier holding him liable for the
value of the undelivered goods.
CA Decision: Reversed the judgment of the trial court and held that respondent had been
engaged in transporting return of freight “as a casual occupation” – a sideline to his scarp
iron business” and not a common carrier. CA referred to the fact that private respondent held
no certificate of public convenience, and concluded he was not a common carrier.
ISSUE: WON respondent Ernesto Cendana is a common carrier?
WON respondent Ernesto Cendana was liable for the undelivered cargo?
RULING:
1. YES. Respondent Cendana is a common carrier.
Article 1732 defined Common carriers as persons, corporations, firms or associations
engaged in the business of carrying or transporting passengers or goods or both, by land,
water, or air for compensation, offering their services to the public.
Based on the provision, it makes no distinction between one whose principal business
activity is the carrying of persons or goods or both, and one who does such carrying only as
an ancillary activity. Article 1732 also carefully avoids making any distinction between a
person or enterprise offering transportation service on a regular or scheduled basis and one
offering such service on an occasional, episodic or unscheduled basis.
Respondent Cendana is properly characterized as a common carrier even though he merely
"back-hauled" goods for other merchants from Manila to Pangasinan, although such
backhauling was done on a periodic or occasional rather than regular or scheduled manner,
and even though private respondent’s principal occupation was not the carriage of goods for
others.
2. NO. Respondent is NOT liable with the undelivered value of the cargo.
On the issue of incurring liability by Respondent Cendana, the Court holds that the
occurrence of the loss must reasonably be regarded as quite beyond the control of the
common carrier and properly regarded as a fortuitous event. It is necessary to recall that even
common carriers are not made absolute insurers against all risks of travel and of transport of
goods, and are not held liable for acts or events which cannot be foreseen or are inevitable,
provided that they shall have complied with the rigorous standard of extraordinary diligence.
GR: Common carriers are responsible for the loss, destruction or detertioration of the
goods which they carry (Art. 1734).
XPN: Art. 1735 (6) – common carrier’s liability for acts committed by thieves or
robbers is dispensed with or diminished – this provision is contrary to public policy.
Hence, the Court agrees with the result reached by the Court of Appeals that private
respondent Cendaña is not liable for the value of the undelivered merchandise which
was lost because of an event entirely beyond private respondent’s control.

First Phil. Petroleum vs. Court of Appeals, GR 125948, 29 December 1998

Spouses Perena vs. Court of Appeals, GR 157917, 29 August 2012

DOCTRINE: The operator of a school bus service is a common carrier in the eyes of the law.
He is bound to observe extraordinary diligence in the conduct of his business. He is
presumed to be negligent when death occurs to a passenger. His liability may include
indemnity for loss of earning capacity even if the deceased passenger may only be an
unemployed high school student at the time of the accident.
FACTS:
The Perenas were engaged in the business of transporting students from their
respective residences in Paranaque to Makati. In 1996, the Zarates contracted the Perenas to
transport Aaron (son of Zarates) to and from Don Bosco school. In an incident, Aaron took
the left side of the van near the door along with other 14 student riders. While traversing the
railroad crossing, PNR train (operated by Johny Alano) hit the rear end of the van and the
impact threw nine of the 12 students in the rear including Aaron; he was dragged out of it
which caused his death. Alano fled from the scene. Consequently, the Zarates filed an action
for damages against the driver, the Perenas, PNR, and Alano.
The Zarates’ claim against the Pereñas was upon breach of the contract of carriage for
the safe transport of Aaron; but that against PNR was based on quasi-delict under Article
2176, Civil Code. The Perenas adduced evidence that they had exercised the diligence of a
good father of the family in the selection and supervision of Alfaro (the driver). PNR
defended that the van recklessly crossed the lane which caused the collision.
RTC Ruling: Decided in favor of the Zarates and against the Perenas ordering them to be
jointly and severally liable to pay damages including a loss of earning capacity of P2M; RTC
reiterated cooperative gross negligence of the Pereñas and PNR had caused the collision that
led to the death of Aaron; and that the damages awarded to the Zarates were not excessive.
Perenas and PNR both appealed.
CA Ruling: affirmed RTC decision but modified the damages. Perena’s morecon was denied.
ISSUEs: 1. WON the Perenas and PNR are solidarily liable based on breach of contract of
carriage and quasi-delict?
2. WON the indemnity for loss of Aaron’s earning capacity proper?
RULING:
1. YES. The Pereñas and the PNR are negligent. The Perenas were liable for the death
of Aaron Zarate.
Carrier Private Carrier
A carrier is a person or corporation who A private carrier is one who, without making
undertakes to transport or convey goods or the activity a vocation, or without holding
persons from one place to another, himself or itself out to the public as ready to
gratuitously or for hire. The carrier is act for all who may desire his or its services,
classified either as a private/special carrier or undertakes, by special agreement in a
as a common/public carrier. particular instance only, to transport goods or
persons from one place to another either
gratuitously or for hire.

In De Guzman v. Court of Appeals, the Court noted that Article 1732 of the Civil Code
avoided any distinction between a person or an enterprise offering transportation on a regular
or an isolated basis; and has not distinguished a carrier offering his services to the general
public, that is, the general community or population, from one offering his services only to a
narrow segment of the general population.
A common carrier is required to observe extraordinary diligence, and is presumed to be at
fault or to have acted negligently in case of the loss of the effects of passengers, or the death
or injuries to passengers. 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.
In this case, the Perenas were found to be: a) engaged in transporting passengers
generally as a business, not just as a casual occupation; (b) undertaking to carry passengers
over established roads by the method by which the business was conducted; and (c)
transporting students for a fee. Despite catering to a limited clientèle, the Pereñas operated as
a common carrier because they held themselves out as a ready transportation indiscriminately
to the students of a particular school living within or near where they operated the service
and for a fee.
The Pereñas were liable for the death of Aaron despite the fact that their driver might
have acted beyond the scope of his authority or even in violation of the orders of the common
carrier. Hence, the lower courts correctly held both the Pereñas and the PNR "jointly and
severally" liable for damages arising from the death of Aaron.
2. Calvo vs. UCPB General Insurance, GR No. 148496, 19 March 2002
3. Spouses Cruz vs. Sun Holidays, Inc., GR 186312, 29 June 2010
4. Estela Crisostomo vs. Court of Appeals, et al., GR 138334, 25 August 2003
5. FGU Insurance vs. G.P. Sarmiento Trucking, GR 141910, 6 August 2002
6. Kilusang Mayo Uno Labor Center vs. Jesus Garcia, GR 115381, 23 December 1994
7. Virata, et al. vs. Ochoa, et al., GR L-46179, 31 January 1978
8. Tiu vs. Arriesgado, GR 138060, 1 September 2004
9. Del Carmen, Jr. vs. Bacoy, et al., GR 173870, 25 April 2012
10. Heirs of Redentor Completo vs. Sgt. Albayda, GR 172200, 6 July 2010
11. LRTA vs. Marjorie Navidad, et al., GR 145804, 6 February 2003