COMMREV MARCH 19

Let’s talk about common carriers. Who is a common carrier? It can be an individual, partnership, corporation,
or association—those without separate juridical personality. The Civil Code states that anyone can be a common
carrier. To be considered a common carrier, one must agree to transport goods or passengers or both as a
service to the public for compensation. If one is transported gratuitously by someone, the latter is not a common
carrier, only a private carrier. The element of compensation, thus, is very important.

A common carrier is free to choose what to transport. It may choose to transport only goods, such as the couriers
LBC, JRS, UPS, and FoodPanda. There are also carriers that prefer to transport only passengers such as taxi
operators, bus operators, and jeepney operators. Those who transfer both are shipping companies and airlines.

There are common carriers who prefer to transport only goods as this allows the maximum utilization of
vehicles, as such cannot be done when only passengers are transported. The equipment to be used depend on
the weight of what is being transported. In common carriers choosing to transport only goods, oftentimes,
special equipment such as cranes and forklifts are needed. This is the downside thereof, for in transporting
passengers, at most, the special equipment needed are wheelchairs and other accessibility instruments as
people are mobile in nature.

When you say carrier, services must be offered to the public. What is the connotation of public in this sense?
Previously, it was said in relation to the general public. However, now it can mean only a narrow segment of the
public, as was ruled by the Supreme Court in a case involving a school bus operator. School bus nowadays are
oftentimes only AUVs limited to up to twelve passengers only. Are school buses considered as a common
carrier? Yes.

In a case involving a pipeline operator that was being taxed by the local government, the Supreme Court made
a pronouncement that carriage is synonymous with transportation—when something is moved from one to
another. The pipeline operator transports oil from oil depots across vast distances. The local government was
taxing the pipeline operator but the pipeline operator begged off such tax because it was already paying
common carrier tax. The local government claimed that the pipeline operator cannot be considered a common
carrier because it only had two clients. The Supreme Court ruled differently, stating that to be considered a
common carrier, a multitude of clients is not required. What is required is the availability of the carrier’s services
to whoever would like to avail thereof.

In another case, the person involved was a customs broker, technically a professional fixer because his services
are engaged when importers would like to negotiate with customs officials without directly dealing with the
same. In this case, the customs broker told his client that he has a truck that can be used to transport goods. It
was the customs broker thus who transported the goods from the port area to the warehouse of the client.
When it arrived in the warehouse, some goods were damaged and the loss was substantial. The client sued the
customs broker for the damage. The Supreme Court said the customs broker is obliged to pay the damage
because it was considered as a common carrier despite the fact that only one client was engaged at the time.
The broker’s defense that it was a mere private carrier is not tenable.

In the transportation of goods, what standard of care is expected from a common carrier? The Civil Code
provides that in the transportation of goods or passengers, common carriers must exercise extraordinary
diligence. However, this does not mean that the same standard of care should be observed for both. There is a
later provision which states that in the transport of passengers, utmost diligence of a very cautious person is
the standard of care which must be observed by common carriers. This is a higher standard of care than that of
in transportation of goods.
When should a common carrier start exercising extraordinary diligence in the transportation of goods? From
the time the goods are unconditionally placed at the disposal of the carrier until it is delivered to the consignee.
If there is no agreement to deliver, it shall be up to the time the consignee had been informed of the arrival of
the goods and was given a reasonable opportunity to claim the goods from the courier.

In case a shipment of goods is to be stored first in the warehouse of a common carrier prior to the actual
transport thereof to its destination, it is evident that the extraordinary standard of care must be already
exercised by the common carrier as early as then for it was already in possession of the goods. The Civil Code
itself provides for this. The reckoning period is always from the time the goods is placed unconditionally in the
possession of a common carrier.

Not all common carriers do door-to-door delivery. What they do is they move goods from one place to another,
and it is up to the consignee to claim the goods from the warehouse of the carrier. In a case where someone
had a perishable good delivered via Philippine Airlines, the item should be handled as carefully as possible until
it is eventually claimed.

Who is a consignee? He is the person to whom goods are sent. The Civil Code calls the person who sent the
goods to the consignee as shipper.

Inasmuch as a common carrier is obliged to observe a very high standard of care, does that make the carrier an
insurer against all kinds of risks in transportation? No. In fact, the Civil Code mentions five occasions when a
common carrier may avoid liability for the loss or damage in the shipment of goods. First, when the proximate
and only cause of the loss or damage is a storm, earthquake, lightning, or other kind of natural calamity. Fire is
not considered as a natural calamity unless, of course, it was a consequence of lightning. The Supreme Court
has ruled it as such.

Second, where the proximate and only cause of the damage is an act of a public enemy in times of war whether
civil or international. How is a public enemy defined in the Revised Penal Code? It refers to a citizen or subject
of a country with which the Philippines is at war. When you say public enemy in the Civil Code, it points out that
it is either in times of a civil or international war. It does not have to be a foreign person thus, as defined by
what is a public enemy in the Revised Penal Code.

Third, where the proximate and only cause of the damage is an act or omission of the shipper himself. For
example, X has a poultry farm wherein he gathers the eggs laid by the chickens therein every morning. The usual
doer of this task went on sick leave. Y did this instead. However, he was unaware as how to properly do it. He
was unable to put insulation during his act of transferring the goods. Once Y arrived at the public market, the
eggs were already broken. The common carrier cannot be faulted here because it was the shipper themselves
who was amiss.

Fourth, where the proximate and only cause of the damage is the character of the goods. For example, if fish is
to be transported, it must be iced. Otherwise, it might perish. Should the fish perish before it reaches the
consignee, the common carrier cannot be faulted for its deterioration as it is natural for fish to perish.

Fifth, where the proximate and only cause of damage is an order of a competent public authority. Are customs
policemen a competent public authority? No. It is the collector of customs who has authority in this case. For
example, there is a possibility that the goods will perish while a competent public authority is conducting an
investigation on the shipment prior to its release to the common carrier. As such, the common carrier cannot
be faulted for damage or loss incurred during such inspection.
If the proximate and only cause of the loss or damage, and you are the carrier, should you certainly be absolved
from liability? No, because the Supreme Court has held that the common carrier shall be liable if it had
committed unnecessary delay in the prosecution of the voyage. This case involved a shipping company. It is
usual shipping company practice to immediately load shipments onto the vessel, individually by stevedores.

A common carrier shall also be liable if it had committed an improper deviation. All modes of transportation
follow a path. Jeepneys, for example, follow a route. Such is also the case for sea vessels, which follow only
accepted sea lanes. In airplanes, there are also airspaces. If a mariner deviated from the route and cause delay
to the voyage, if this was improper, the carrier shall be liable for loss or damage.

The proximate and only cause of the loss or damage may only be one of those five mentioned in the law. If you
were the shipper, would you be able to recover anything from the carrier in any of these scenarios? The anser
is yes. To recover, the shipper must prove that the carrier failed to exercise extraordinary diligence during the
occurrence of any of these situations that would normally arise to the absolution from liability of the common
carrier.

The proximate and only cause of the loss or damage is not one of the five. Is it certain thus that the common
carrier shall be liable for the damage? Not necessarily. If the common carrier proves that under the
circumstances they were able to exercise extraordinary diligence, there shall be no liability. There is a shifting
of the burden of proof depending on the circumstances present in every case.

May the shipper and the carrier validly stipulate a standard of care less than extraordinary diligence? Yes, the
law allows such. What is not allowed is a stipulation between passengers and carriers that carriers need not to
exercise the required standard of care because the Supreme Court has held that the safety of passengers can
never be compromised.

The shipper and the carrier may validly stipulate a standard of care less than extraordinary diligence under the
following conditions: (1) the stipulation must be in writing and signed by both parties, it cannot be oral; (2) it
must be supported by a consideration other than a promise to transport [Book 4 of the Civil Code provides that
the consideration in a contract is the promise of one party to do something for the other, thus if a contract is
bilateral and onerous, there are two considerations which, in a contract of carriage, with respect to the carrier,
it is the promise of the shipper to pay the fare, and with respect to the shipper, it is the promise of the carrier
to transport the goods. Consideration is the same as prestation. In a contract of carriage, it is the respective
promises of the carrier and the shipper to each other. What then is the consideration other than the promise to
transport? The usual consideration other than the promise to transport is the promise of the carrier to give a
discount in the fare.]; (3) the stipulated standard of care must not be less than diligence of a good father of a
family; and (4) all other stipulations must be fair and reasonable.

The highest degree of standard of care is that in the transport of persons which is the utmost diligence of a very
cautious person with due regard to the circumstances. What is less than utmost diligence? Extraordinary
diligence, which is the standard of care required by the Civil Code in the transportation of goods.

The least standard of care is diligence of a good father of a family, as this is ordinary diligence. Anything less
than this standard of care is already considered as negligence. What is the standard of care that is higher than
diligence of a good father of a family? The law no longer provides for a name thereto because diligence is
determined by the circumstances of every case and there is no exact yardstick to measure diligence by.

If you are a common carrier, to avoid liability, the explanation for any loss incurred in the exercise of an
obligation must be very detailed.
If there is any regulation, and one exceeds the regulation, there can be no exercise of the diligence of a good
father of a family standard. There is a law which states that when a motorist is in violation of a traffic rule, he is
presumed to have been negligent.

Diligence in the transportation of passengers shall be discussed next. Common carriers must make a full stop at
bus stops to enable the passengers to go in or jump out. The usual practice of only slowing down to do so is not
an exercise of diligence as it is negligence. Drivers should not have vehicles moving while loading or unloading
passengers. Passengers who will sustain an injury because of this behavior of a bus driver shall have a cause of
action against the bus operator. The practice of overloading passenger buses also constitutes negligence. Thus,
if an overloaded bus is hit by a car and passengers of both were injured, the bus operator will still be liable even
if there was no fault on the part of the bus driver because the fact of overloading means there is a violation and
any violation of traffic laws automatically gives rise to the presumption that a driver is negligent.

May the carrier and passenger validly stipulate a standard of care less than that required by law? The Supreme
Court has said there can be no compromise with respect to the safety of passengers. If you were a common
carrier, does this mean you are an insurer against all risks of transportation? The answer is no. While the law
imposes a very high standard of care in the transportation of passengers, this does not mean that a common
carrier is an insurer of risk against all risks of transportation. For example, if a passenger was hit by a stray bullet
while on a bus, the bus operator has no liability to him.

In case a third person on a common carrier causes injury to another co-passenger, the law says that the common
carrier shall be liable for the acts or omissions of third persons if such could have been prevented had the proper
diligence been exercised. A common carrier cannot avoid liability by posting signs or notices to that effect. These
have no legal advantage because the law itself provides that liability shall lie.

The law obliges a passenger to observe, for his own safety, the diligence of a good father of a family. This applies
to all passengers. If you are a passenger, it is a basic rule to not extend any part of your body outside of a moving
vehicle.

When may a common carrier be made liable for moral damages? There are occasions in which the Supreme
Court allowed this. The relationship between passengers and common carriers is contractual. If the passenger
was already aware of breach of contract, no moral damages can be awarded. This is because moral damages
would only be awarded in case of wounded feelings, serious anxiety, and besmirched reputation. In breach of
contract, usually only actual damages can be awarded. However, the Supreme Court awards moral damages (1)
when there be death of a passenger [if a passenger dies, who gets the award for moral damages? The legal heirs,
excluding brothers and sisters, shall be the ones entitled thereto—meaning, children and spouse, and the
parents in default thereof—however, there was one exceptional case wherein a foster parent was awarded
moral damages in a case where their foster child was killed in an accident involving a common carrier]; (3) when
a passenger gets injured [who receives the award of moral damages in this case? Only the injured passenger
himself may be so entitled]; (4) where there are acts of discourtesy of an employee of the carrier [this provision
has no exception: in a case where there were Filipinos who came from Hawaii and was ultimately destined for
Surigao, who had too much baggage that was unable to be loaded in their Philippine Airlines flights; Philippine
Airlines informed them of this and offered to pay for their accommodation but not at their desired Cebu Plaza
Hotel because it was already fully booked. The couple insisted still and was later allowed but still asked for
monies “for tips” to waiters and other hotel personnel, a request one of Philippine Airlines’ employees was
discourteous in granting. The couple thus filed suit and asked for moral damages, which the Supreme Court
granted.]; and (5) because its employee committed discrimination among passengers [In a case involving
Philippine Airlines, it was ruled that in a case where there is a layover the expenses thereof were not going to
be paid for by the airline but only for some passengers and not all, the affected persons were awarded damages.]
A passenger should not sue the carrier for mere slight breaches, as was exhibited in the case of Spouses Vasquez
vs. Cathay Pacific. They booked a flight in business class but was informed that there were no more available
seats in that cabin. Nevertheless, they were offered seats in first class. The spouses rejected this and filed suit
against Cathay Pacific, which was granted in their favor in the lower court. On appeal, the Court of Appeals ruled
that there was no bad faith but the moral damages were merely reduced and not stricken off. When the case
was elevated to the Supreme Court, it was ruled that no moral damages should have been awarded at all,
according to jurisprudence, due to the lack of bad faith. Only nominal damages was awarded.

Laws are repealed only by subsequent ones. The Carriage of Goods by Sea Act or COGSA is applicable only to
shipments of goods by sea from another country into the Philippines. It is not applicable to passengers. It does
not apply to air travel as well as what shall apply then is the Warsaw Convention. The laws applicable to
shipment of goods within the Philippines, whatever mode, are the Civil Code and the Code of Commerce. The
law that applies for the shipment of goods from the Philippines to another country is the law of the destination
country, not the Philippines, the goods no longer being in Philippine jurisdiction. The Civil Code provides that it
is the law of the country to which the goods are shipped that shall determine the liability of the carrier.

What if there would be a shipment of goods from another country and by the time these were delivered to you,
there was apparent loss or damage? If goods came from another country into the Philippines and the consignee
would see that there is an apparent loss or damage, the COGSA requires him to immediately file a claim with
the carrier—not yet a suit. When one files a claim with the carrier, the carrier would usually settle immediately
and no more problems will arise. However, as it is possible that the carrier may not act on the claim or deny it
in its entirety, if the loss is substantial and the consignee seeks indemnity, a complaint in court must be filed
within one year from delivery of the goods to the arrastre operator.

Why is the arrastre operator involved? Goods are not automatically released once arrival in the Philippines. It
will first be turned over with the arrastre because the Bureau of Customs must first assess how much duties
would be paid. Carriers first turn goods over to the arrastre and these shall be checked via a tally sheet. If there
is a sign that something was lost or damaged and the tally sheet was signed immediately, it will appear that the
loss or damage took place under the arrastre operator’s care. That is why tally sheets are often signed only after
thorough inspection and annotation of the losses or damages incurred during the voyage, which are not
attributable to them. A clean tally sheet is that which bears no annotation that something was lost or damaged.

Can you file a complaint in court without having filed with the carrier a claim first? Yes. The law expressly allows
this. COGSA provides that a complaint can be filed in court without the need of filing a claim with the carrier.
Claims are obviously less expensive, though. Should resort to court be chosen, the complaint should have been
filed within one year from the delivery of the goods to the arrastre operator, the material date thereof
discoverable in the tally sheet of the arrastre operator.

The Civil Code and the Code of Commerce are applicable in the shipment of goods within the Philippines. Under
the Code of Commerce, if there shall be apparent loss or damage, a claim should be filed immediately with the
carrier. If the loss or damage is not apparent, the claim should be filed with the carrier within twenty-four hours
from delivery—in COGSA, the period is three days. Under the COGSA, one can file a complaint directly in court.
In the Code of Commerce, no complaints may be filed in court without first filing a claim with the carrier as such
is a condition precedent to the filing of a complaint in court.

There are other scenarios. The tally sheet was clean upon turnover and inspection at the arrastre operator.
Upon delivery to the arrastre operator, the customs duties shall assess the shipment. After assessment, the
proper fees will be paid. Thereinafter, the shipments will be allowed release. If you are the consignee who had
already paid, who will release the shipment to you? It is the arrastre operator who shall release the same. Upon
release, you will be required to sign as well. In every phase of the turnover process, there should be documents
to record.

In a case where the tally sheet was clean, evidencing that there was no loss or damage, who will you go after as
a consignee if you observe damage or loss upon release to you? It is only the arrastre operator from whom you
can recover because the carrier no longer has liability as the clean tally sheet had already cleared the carrier of
liability.

Suit against the arrastre operator shall be based on quasi-delict due to the fact that there is no pre-existing
contract or relationship between the consignee and the operator.

When you engage the services of a customs broker to cause the release of your shipment from the arrastre
operator, and the goods were turned over to the customs broker upon release, the customs broker is liable
should there be loss or damage upon receipt of the shipment to the consignee and discovery that there was loss
or damage despite the tally sheet being clean. The basis thereof is breach of contract as there was an agreement
between the consignee and the customs broker for the transfer of the former’s goods from the arrastre
operator’s care to the warehouse.