Transport Law Review

TRANSPORTATION LAW
ATTY. BENEDICT G. NISPEROS, ENP

(BSBA, DURP, JD, MSC LED, (PHD Candidate)
 Introduction
 Class rules
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 Reporting Requirements Assignments
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 Case updates on Transport Law (2020-2021)
 Special Topics in Transport Law (confer which
special topics to include – Agencies on )
 Updates on Law and Regulation on Transport Law
(Public Service Act, Sim Card Registration etc)
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Professor before intended absence
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Feb 16 – Transport Law
Feb 19 – Transport Law
Feb 23 – Reporting and Submission of
Schedule Questions on Other Topics
Feb 26 - Other issues in Civil Law and
Commercial Law
 Common Carriers – Art. 1732
a) are persons, corporations, firms or associations
b) engaged in the business of carrying or
CONCEPT OF transporting passengers or goods or both
COMMON c) by land, water, or air
CARRIER d) for compensation
e) offering their services to the public
Civil Code
Code of Commerce
APPLICABLE
LAW Public Service Act (currently being revised – for
signature of PRRD)
1987 Constitution
 4 TESTS OF COMMON CARRIER OF GOODS
(1ST Philippine Industrial Corp vs. CA):
1. He must be engaged in the business of carrying goods for
others as a public employment, and must hold himself out as
4 TESTS OF ready to engage in the transportation of goods for person
generally as a business and not as a casual occupation;
COMMON 2. He must undertake to carry goods of the kind to which his
CARRIER OF business is confined;
GOODS 3. He must undertake to carry by the method by which his

business is conducted and over his established roads; and
4. The transportation must be for hire.
 True Test: It has been held that the 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 transportation service
for a fee.
True Test
 Private Carrier — One which, without being
engaged in the business of carrying as a public
employment, undertakes to deliver goods or
passengers for compensation.
 De Guzman vs. CA
 Article 1732 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.
NO  Article 1732 also carefully avoids making any
DISTINCTION 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.
 National Steel Corp vs. CA
 It has been held that the 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 transportation service for a fee. A
carrier which does not qualify under the above test
is deemed a private carrier.
 The most typical, although not the only form of
private carriage, is the charter party.
 1ST Philippine Industrial Corp vs. CA
 A "common carrier" may be defined, broadly, as one who
holds himself out to the public as engaged in the
business of transporting persons or property from place
to place, for compensation, offering his services to the
public generally.
 It undertakes to carry for all persons indifferently, that is,
to all persons who choose to employ its services, and
transports the goods by land and for compensation. The
fact that petitioner has a limited clientele does not
exclude it from the definition of a common carrier
 Calvo vs. UCPB Insurance
 Article 1732 does not distinguish between a carrier
offering its services to the "general public," i.e., the
general community or population, and one who offers
services or solicits business only from a narrow segment
of the general population. Article 1732 deliberately
refrained from making such distinctions.
 Asia Lighterage vs. CA
 It is a common carrier whether its carrying of goods is
done on an irregular rather than scheduled manner, and
with an only limited clientele. A common carrier need
not have fixed and publicly known routes. Neither does
it have to maintain terminals or issue tickets.
 The test to determine a common carrier is whether the
given undertaking is a part of the business engaged in by
the carrier which he has held out to the general public as
his occupation rather than the quantity or extent of the
business transacted.
 FGU Insurance Corp vs. G.P. Sarmiento
 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.
 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.
 Philippine American General Insurance (PhilAmGen)
vs. PKS Shipping
 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.
 Customs broker
 Pawnshop
 Trucking service
 Pipeline
 Barges
QUIZ  Charter Party
 Ferry Service
 Food delivery (Grab and Food Panda)
 Arrasttre
 Travel Agency
 Customs broker – principal business or not
 Pawnshop – no carriage of goods
 Trucking service –carriage of goods and charging of fees
 Pipeline – carriage of goods
 Barges –regular or irregular carriage of goods
QUIZ  Charter Party – regular course of business
 Ferry service – ancillary part of business
 Food delivery (Grab and Food Panda)
 Arrastre – service rendered in terminals
 Travel agency – no carriage of goods or service
 Bascos vs. CA
 Common carriers are obliged to observe extraordinary
diligence in the vigilance over the goods transported by them.
EXTRA- Accordingly, they are presumed to have been at fault or to
ORDINARY have acted negligently if the goods are lost, destroyed or

deteriorated. There are very few instances when the
DILIGENCE presumption of negligence does not attach and these instances
are enumerated in Article 1734.
 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;
EXTRA-
ORDINARY  (2) Act of the public enemy in war, whether international or civil;
DILIGENCE  (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.

 A.F. Sanchez Brokerage vs. CA and FGU Insurance
 A common carrier is mandated to observe extraordinary
diligence in the vigilance over the goods it transports
according to all the circumstances of each case. In the event
that the goods are lost, destroyed or deteriorated, it is
Common presumed to have been at fault or to have acted negligently,

unless it proves that it observed extraordinary diligence.
Carrier  A common carrier is liable to the resulting damage to the goods
if the improper packaging is known to the carrier or his
employees or is apparent upon ordinary observation, but he
nevertheless accepts the same without protest or exception
 Spouses Pereñas vs. Spouses Zarate
 The diligence required of a private carrier is only ordinary,
that is, the diligence of a good father of the family. In
contrast, a common carrier is required to observe extraordinary
diligence, and is presumed to be at fault or to have acted
Common negligently in case of the loss of the effects of passengers, or
the death or injuries to passengers. The Pereñas operated as a
Carrier 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
 Fisher vs. Yangco Steamship Co.
 Common carriers exercise a sort of public office, and have duties to
perform in which the public is interested. Their business is, therefore,
affected with a public interest, and is subject of public regulation. The
right to enter the public employment as a common carrier and to offer
Common 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 interest of
Carrier 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 discrimination of any kind whatsoever in the
performance of the carrier's duties as a servant of the public (Act No.
98).
 Loadstar Shipping Co. Inc. vs. 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. The bare fact that the vessel was carrying a
Common particular type of cargo for one shipper, which appears

to be purely coincidental, is not reason enough to convert
Carrier the vessel from a common to a private carrier, especially
where, as in this case, it was shown that the vessel was
also carrying passengers.
 The doctrine of limited liability does not apply where
there was negligence on the part of the vessel owner or
agent.
 San Pablo vs. Pantranco South Express
 The contention of Pantranco that its ferry service
operation is as a private carrier, not as a common carrier
for its exclusive use in the ferrying of its passenger buses
Common and cargo trucks is absurd. Pantranco does not deny that
it charges its passengers separately from the charges for
Carrier the bus trips and issues separate tickets whenever they
board the MV "Black Double" that crosses Matnog to
Allen.
 Planters Products Inc. vs. Soriamont Steamship &
Kyosei Kisen Kabushiki Kaisha & CA\
 A public/common carrier shall remain as such,
notwithstanding the charter of the whole or portion of a
Common vessel by one or more persons, provided the charter is
Carrier 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.
 KMU Labor Center vs. Garcia, Jr.
 Given the task of determining sensitive and delicate
matters as route-fixing and rate-making for the transport
sector, the responsible regulatory body is entrusted with
the power of subordinate legislation. The LTFRB, may
implement broad policies laid down in a statute by "filling
Common in" the details which the Legislature may neither havetime
Carrier or competence to provide. The authority given by the

LTFRB to the provincial bus operators to set a fare range
over and above the authorized existing fare, is illegal and
invalid as it is tantamount to an undue delegation of
legislative authority.
 Tatad vs. Garcia, Jr.
 While a franchise is needed to operate these facilities to
serve the public, they do not by themselves constitute a
public utility. What constitutes a public utility is not their
ownership but their use to serve the public. There is a clear
Common distinction between the "operation" of a public utility and the
Carrier ownership of the facilities and equipment used to serve the

public. 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.
 Samar Mining Company vs. Nordeutscher Lloyd
 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. There is
Common actual delivery in contracts for the transport of goods
Carrier 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. In the present case, there
was actual delivery to the consignee through its duly
authorized agent, the carrier.
 Eastern Shipping Lines vs. IAC , see National Development
Company vs. CA
 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
Governing Law 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.
 Gelisan vs. Alday
 As the registered owner of a public service vehicle, owner
should be responsible for all damages that may arise as
consequences of the operation of their service. The claim
that owner is not liable in view of the lease contract executed
Registered by and between the contracting parties should exempt the
Owner Rule owner from liability to third persons cannot be sustained

because it appears that the lease contract had not been
approved by the Public Service Commission. Since the lease
is without approval, owner is still continued to be the
operator in contemplation of law and thus should be jointly
and severally liable with the drive for damages incurred.
 Benedicto vs. IAC
 The prevailing doctrine on common carriers makes the
registered owner liable for consequences flowing from the
operations of the carrier, even though the specific vehicle
involved may already have been transferred to another person.
Registered This doctrine rests upon the principle that in dealing with
Owner Liable 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. The registered owner is not allowed to
deny liability by proving the identity of the alleged transferee.
 Philtranco Services Enterprises vs. CA
 The liability of the registered owner of a public service vehicle
Registered for damages arising from the tortious acts of the driver is
Owner Liable primary, direct, and joint and several or solidary with the
driver.
 Equitable Leasing Corp vs. Lucita Suyon
 The registered owner is the lawful operator insofar as the
public and third persons are concerned; consequently, it is
directly and primarily responsible for the consequences of its
Registered operation. In the eyes of the law, the owner/operator of record
is the employer of the driver, the actual owner/operator being
Owner Liable considered as merely the agent of the registered
owner/operator. The principle applies even if the registered
owner of any vehicle does not use it for public service.
 Lita Enterprise vs. IAC
 The “kabit system" is whereby a person who has been granted a
certificate of convenience allows another person who owns
motors 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. Although not
“Kabit system” 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 them
both where it finds them.
 Teja Marketing vs. IAC
 The "kabit system" has been identified as one of the root causes
of the prevalence of graft and corruption in the government
Kabit system transportation offices. It is a fundamental principle that the
a problem court will not aid either party to enforce an illegal contract, but
will leave both where it finds them.
 Magboo vs. Bernardo
 There is an employer-employee relationship under a boundary
system arrangement. The fact that the driver does not receive a
fixed wage but gets only the excess of the receipt of fares
collected by him is not sufficient to withdraw the relationship
Boundary between them from that of employer and employee. To exempt
from liability the owner of a public vehicle who operates it
System 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.
 3 REQUISITE FOR A VALID STIPULATION LIMITING
LIABILITY OF CARRIER: (Art. 1744)
Stipulations 1. In writing, signed by shipper or owner .
Limiting 2. Supported by a valuable consideration other than the service
Liability rendered by carriers .

3. It must be reasonable, just, and not contrary to public policy .
 5 CIRCUMSTANCES THAT WILL EXEMPT FROM
LIABILITY:
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 goods or defects in the packing or in the
containers
5. Order or act of competent authority
*Acts of GOD including pandemic/health emergency

 Eastern Shipping Lines vs. CA & First Nationwide
Assurance Co.
 Common carriers are bound to observe extraordinary
EOD OVER vigilance over goods according to all circumstances of
CASO each case. Once the carrier has failed to establish any
FORTUITO caso fortuito, the presumption by law of fault of

negligence on the part of carriers applies.
 Delsan Transport Lines vs. CA
 From the nature of their business and for reasons of public
policy, common carriers are bound to observe extraordinary
diligence in the vigilance over the goods and for the safety of
passengers transported by them, according to all the
circumstances of each case. In all other cases, 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.
 Philippine Charter Insurance vs. Unknown Owner
 Common carriers duty to observe the requisite diligence in the
shipment of goods last from the times the articles are
surrendered to, or unconditionally placed in the possession of,
and received by, the carriers for transportation until delivered
to, or until the lapse of a reasonable time for their acceptance,
by the person entitled to receive them.
 Saludo vs. CA
 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 instanti.
 Lorenzo Shipping vs. BJ Marthel
 In determining whether time is of the essence in a contract, the
ultimate criterion is the actual or apparent intention of the
parties and before time may be so regarded by a court, there
must be a sufficient manifestation, either in the contract itself
or the surrounding circumstances of that intention. The law
implies, however, that if no time is fixed, delivery shall be
made within a reasonable time, in the absence of anything to
show that an immediate delivery intended.
 Sealoader Shipping vs. Grand Cement
 The doctrine of last clear chance states that where both
parties are negligent but the negligent act of one is
appreciably later than that of the other, or where it is
impossible to determine whose fault or negligence caused
the loss, the one who had the last clear opportunity to avoid
the loss but failed to do so, is chargeable with the loss. The
antecedent negligence of plaintiff does not preclude him from
recovering damages caused by the supervening negligence of
defendant, who had the last fair chance to prevent the
impending harm by the exercise of due diligence.
 FGU Insurance vs. CA & San Miguel Corp
 Caso fortuito or force majeure by definition, are extraordinary
events not foreseeable or avoidable, events that could not be
foreseen, or which though foreseen, were inevitable. It is
therefore not enough that the event should not have been
foreseen or anticipated, as is commonly believed but it must be
one impossible to foresee or to avoid. To be exempted from
responsibility, the natural disaster should have been the
proximate and only cause of the loss. There must have been no
contributory negligence on the part of the common carrier.
 FIRE IS NOT CASO FORTUITO
 Delsan Transport vs. American Home
 Common carriers are bound to observe extraordinary diligence
in the vigilance over the goods transported by them. They are
presumed to have been at fault or to have acted negligently if
the goods are lost, destroyed or deteriorated. To overcome the
presumption of negligence in case of loss, destruction or
deterioration of the goods, the common carrier must prove that
it exercised extraordinary diligence. There are, however,
exceptions to this rule found in Article 1734 of the NCC.
 Maersk Lines vs. CA
 While it is true that common carriers are not obligated by law
to carry and to deliver merchandise, and persons are not vested
with the right to prompt delivery, unless such common carriers
previously assume the obligation to deliver at a given date or
time, delivery of shipment or cargo should at least be made
within reasonable time.
 DSR-Senator Lines vs. Federal Phoenix
 Fire is not one of those enumerated under Article 1734 which
exempts a carrier from liability for loss or destruction of the
cargo. 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. Even if
fire were to be considered a natural disaster within the purview
of Article 1734, it is required under Article 1739of the same
Code that the natural disaster must have been the proximate
and only cause of the loss, and that the carrier has exercised
due diligence to prevent or minimize the loss before, during or
after the occurrence of the disaster.
 Philamgen vs. CA & Transpacific Towage, Inc.
 The cargo having been lost due to typhoon "Saling", and the
delay incurred in its unloading not being due to negligence,
private respondent is exempt from liability for the loss of the
cargo, pursuant to Article 1740 of the Civil Code. The records
also show that before, during and after the occurrence of
typhoon "Saling", private respondent through its shipmaster
exercised due negligence to prevent or minimize the loss of the
cargo. The diligence exercised by the shipmaster further
supports the exemption of private respondent from liability for
the loss of the cargo.
 Belgian Overseas vs. Philippine First Insurance
 Mere proof of delivery of the goods in good order to a common
carrier and of their arrival in bad order at their destination
constitutes a prima facie cause of fault or negligence against
the carrier. If no adequate explanation is given as to how the
deterioration, the loss or the destructions of the goods
happened, the transporter or the carrier shall be held
responsible.
 Cokaliong vs. UCPB General
 Having originated from an unchecked crack in the fuel oil
service tank, the fire could not have been caused by force
majeure. May refer to Eastern Shipping Lines, Inc. vs.
Intermediate Appellate Court. A stipulation that limits liability
is valid as long as it is not against public policy.
 Sarkies Tours vs. IAC
 The cause of the loss in the case at bar was petitioner's
negligence in not ensuring that the doors of the baggage
compartment of its bus were securely fastened. As a result of
this lack of care, almost all of the luggage was lost, to the
prejudice of the paying passengers. Where a common carrier
accepted its passengers’ baggage for transportation and even
had it placed in the vehicle, it is responsible for the consequent
loss of the baggage.
 Valenzuela Hardwood vs. CA
 In a contract of private carriage, the parties may validly
stipulate that responsibility for the cargo rests solely on the
charterer, exempting the ship owner from liability for loss of or
damage to the cargo caused even by the negligence of the ship
captain. Pursuant to Article 1306 of the Civil Code, such
stipulation is valid because it is freely entered into by the
parties and the same is not contrary to law, morals, good
customs, public order, or public policy. We stress that in a
contract of private carriage, the parties may freely stipulate
their duties and obligations which perforce would be binding
on them. Unlike in contract involving a common carrier,
private carriage does not involve the general public.
 Yobido vs. CA
 The explosion of the new tire is not a fortuitous event. There are
human factors involved in the situation. The fact that the tire was
new did not imply that it was entirely free from manufacturing
defects or that it was properly mounted on the vehicle. Neither
may the fact that the tire bought and used is of a brand name
noted for quality, resulting in the conclusion that it could not
explode within five day’s use. Itis settled that an accident caused
either by defects in the automobile or through the negligence of
its driver is not a caso fortuito. Moreover, a common carrier may
not be absolved from liability in case of force majeure. A
common carrier must still prove that it was not negligent in
causing the death or injury resulting from the accident. Thus,
having failed to overthrow the presumption of negligence with
clear and convincing evidence, petitioners are hereby held liable
for damages.
 Central Shipping Co. Inc vs. Insurance Company of North
America
 A common carrier is presumed to be at fault or negligent. It
shall be liable for the loss, destruction or deterioration of its
cargo, unless it can prove that the sole and proximate cause of
such event is one of the causes enumerated in Article 1734 of
the Civil Code, or that it exercised extraordinary diligence to
prevent or minimize the loss. The doctrine of limited liability
under Article 587 of the Code of Commerce is not applicable to
the present case. This rule does not apply to situations in which
the loss or the injury is due to the concurrent negligence of the
ship-owner and the captain.
 Everett Steamship vs. CA & Hernandez Trading
 A stipulation in the bill of lading limiting the common carriers
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. 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 agreed upon.
 Spouses Cruz vs. Sun Holidays
 Common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary
diligence for the safety of the passengers transported by them,
according to all the circumstances of each case. They are
bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very
cautious persons, with due regard for all the circumstances.
When a passenger dies or is injured in the discharge of a
contract of carriage, it is presumed that the common carrier is
at fault or negligent. In fact, there is even no need for the court
to make an express finding of fault or negligence on the part of
the common carrier. This statutory presumption may only be
overcome by evidence that the carrier exercised extraordinary
diligence.
 Southern Lines, Inc. vs. CA
 If the fact of improper packing is known to the carrier or his
servants, or apparent upon ordinary observation, but it accepts
the goods notwithstanding such condition, it is not relieved of
liability for loss or injury resulting therefrom.
 Mitsui OSK Lines vs. CA
 As defined in the Civil Code and as applied to Section 3(6),
paragraph 4 of the Carriage of Goods by Sea Act, loss
contemplates merely a situation where no delivery at all was
made by the shipper of the goods because the same had
perished, gone out of commerce, or disappeared in such a way
that their existence is unknown or they cannot be recovered. As
long as it is claimed, therefore, as it is done here, that the losses
or damages suffered by the shipper or consignee were due to
the arrival of the goods in damaged or deteriorated condition,
the action is still basically one for damage to the goods, and
must be filed within the period of one year from delivery or
receipt.
 Sulpicio Lines vs. First Lepanto-Taisho Insurance
 Damage to the packaging is not tantamount to damage to the
cargo. It must be stressed that the damage sustained by the
packaging of the cargo while in carrier’s custody resulted in its
unfitness to be transported to its consignee in Singapore. Such
failure to ship the cargo to its final destination because of the
ruined packaging, indeed, resulted in damages on the part of the
owner of the goods. A common carrier is bound to transport its
cargo and its passengers safely "as far as human care and
foresight can provide, using the utmost diligence of a very
cautious person, with due regard to all circumstances." The
extraordinary diligence in the vigilance over the goods tendered
for shipment requires the common carrier to know and to follow
the required precaution for avoiding the damage to, or
destruction of, the goods entrusted to it for safe carriage and
delivery.
 Coastwise Lighterage Corporation vs. CA
 Two kinds of charter parties—charter by demise or bareboat
charter, and contract of affreightment. Although a charter party
may transform a common carrier into a private one, the same
however is not true in a contract of affreightment. Common
carriers, as a general rule, are presumed to have been at fault or
negligent if the goods they transported deteriorated or got lost
or destroyed. It may also logically, follow that a person without
license to navigate, lacks not just the skill to do so, but also the
utmost familiarity with the usual and safe routes taken by
seasoned and legally authorized ones
 Philippine First Insurance vs. Wallem First Shipping
 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. A ship captain is liable for the cargo from the time it is
turned over to him at the dock or afloat alongside the vessel at
the port of loading, until he delivers it on the shore or on the
discharging wharf at the port of unloading, unless agreed
otherwise. 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.
 Samar Mining Company vs. Nordeutscher Lloyd
 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. 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. In the present case,
there was actual delivery to the consignee through its duly
authorized agent, the carrier. 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.
 Ganzon vs. 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, the contract of carriage was deemed perfected.
Consequently, the petitioner-carrier's extraordinary responsibility
for the loss, destruction or deterioration 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.
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. The petitioner has failed to show that the loss of the
scraps was due to any of the following causes enumerated in
Article 1734 of the Civil Code. Hence, the petitioner is presumed
to have been at fault or to have acted negligently.
 Saludo vs. CA
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
eo instanti.
 Macam vs. CA
 It is a standard maritime practice when immediate delivery is of
the essence, for shipper to request or instruct the carrier to
deliver the goods to the buyer upon arrival at the port of
destination without requiring presentation of bill of lading as
that usually takes time. After all, the cargoes consist of
perishable fresh fruits and immediate delivery thereof the
buyer/importer is essentially a factor to reckon with. We
emphasize 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.
 PAL vs. CA
 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. Since the passenger's destination in
this case was the Philippines, Philippine law governs the
liability of the carrier for the loss of the passenger's luggage.
 Cathay Pacific vs. CA
 Common carriers breach its contract of carriage with private
respondent when it failed to deliver his luggage at the
designated place and time, it being the obligation of a common
carrier to carry its passengers and their luggage safely to their
destination, which includes the duty not to delay their
transportation. Moral damages predicated upon a breach of
contract of carriage may only be recoverable in instances
where the mishap results in death of a passenger, or where the
carrier is guilty of fraud or bad faith. Although the Warsaw
Convention has the force and effect of law in this country,
being a treaty commitment assumed by the Philippine
government, said convention does not operate as an exclusive
enumeration of the instances for declaring a carrier liable for
breach of contract of carriage or as an absolute limit of the
extent of that liability.
 Trans-Asia Shipping Lines vs. CA
 For a vessel to be seaworthy, it must be adequately equipped
for the voyage and manned with a sufficient number of
competent officers and crew. The failure of a common carrier
to maintain in seaworthy condition its vessel involved in a
contract of carriage is a clear breach of is duty prescribed in
Article 1755 of the NCC. In allowing its unseaworthy M/V
Asia Thailand to leave the port of origin and undertake the
contracted voyage, with full awareness that it was exposed to
perils of the sea, it deliberately disregarded its solemn duty to
exercise extraordinary diligence and obviously acted with bad
faith and in a wanton and reckless manner.
 Sweet Lines vs. Teves
 The Supreme Court held that the condition printed at the back
of the ticket limiting the venue of actions arising from the
contract is void and unenforceable because it subverts the
public policy on transfer of venue of proceeding. Furthermore,
it will prejudice the rights and interests of innumerable
passengers located in different places of the country, who,
under the condition, will have to file suits against petitioner
only in the City of Cebu. Thus, such condition will likewise
defeat the ends of justice.
 Ysmael & Co. vs. Barreto
 The validity of the stipulations limiting carrier’s liability is to
be determined by their reasonableness and their conformity to
the sound public policy. It cannot lawfully stipulate for
exemption from liability, unless such exemption is just and
reasonable, and unless the contract is freely and fairly made. In
the case at bar, to limit the defendants’ liability for each case of
silk for loss or damage from any cause or for any reason would
put it in the power of the defendants to have taken the whole
cargo. Such limitation of value is unconscionable and void as
against public policy.
 Shewaram vs. PAL
 In accordance with the provision 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." The
requirements must be complied with before a common carrier
can claim a limitation of its pecuniary liability in case of loss,
destruction or deterioration of the goods it has undertaken to
transport. In the case before at bar, the Supreme Court believe
that the requirements of said article have not been met. It having
been clearly found by the trial court that the transistor radio and
the camera of the appellee were lost as a result of the negligence
of the appellant as a common carrier, the liability of the
appellant is clear — it must pay the appellee the value of those
two articles.
 Ong Yiu vs. CA
 No bad faith committed when airline company exerted due
diligence with its duty in locating a passenger’s lost luggage.
Bad faith means a breach of a known duty through some
motive of interest or ill will. In the absence of a wrongful act or
omission or of fraud or bad faith, petitioner is not entitled to
moral damages. Exemplary damages can be granted if the
defendant acted in a wanton, fraudulent, reckless, oppressive,
or malevolent manner, which has not been proven in this case.
 Sea-Land Service, Inc vs. IAC
 Since the liability of a common carrier for loss of or damage to
goods transported by it under a contract of carriage is governed by
the laws of the country of destination and the goods in question were
shipped from the United States to the Philippines, the liability of
Sea-Land has Cue is governed primarily by the Civil Code, and as
ordained by the said Code, supplementary, in all matters not cluttered
thereby, by the Code of Commerce and special laws. One of these
supplementary special laws is the Carriage of goods by Sea Act
(COGSA), made applicable to all contracts for the carriage by sea to
and from the Philippines Ports in Foreign Trade. Not only is there
nothing in the Civil Code which absolutely prohibits agreements
between shipper and carrier limiting the latter's liability for loss of or
damage to cargo shipped under contracts of carriage. A stipulation
that the common carrier's liability is limited to the value of the goods
appearing in the bill of lading, unless the shipper or owner declares a
greater value, is binding.
 Citadel Lines vs. CA
 The Supreme Court held that that the subject shipment was lost
while it was still in the custody of herein petitioner Citadel
Lines, Inc., and considering further that it failed to prove that
the loss was occasioned by an excepted cause, the inescapable
conclusion is that the CARRIER was negligent and should be
held liable. The duty of the consignee is to prove merely that
the goods were lost. Thereafter, the burden is shifted to the
carrier to prove that it has exercised the extraordinary diligence
required by law.
 British Airways vs. CA
 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 passengers’ lack of knowledge thereof or
assent thereto. This doctrine is recognized in this jurisdiction.
Benefits of limited liability are subject to waiver such as when
the air carrier failed to raise timely objections during the trial
when questions and answers regarding the actual claims and
damages sustained by the passenger were asked. Given the
foregoing, the inescapable conclusion is that British Airways
had waived the defense of limited liability when it allowed
Mahtani to testify as to the actual damages he incurred due to
the misplacement of his luggage, without any objection.
 Loadstar Shipping Co. vs. CA
 The law imposes duties and liabilities upon common carriers for
the safety and protection of those who utilize their services and
the law cannot allow a common carrier to render such duties and
liabilities merely facultative by simply failing to obtain the
necessary permits and authorizations. 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.
 Quisumbing, Sr. vs. CA
 The Court ruled that under the highjacking-robbery was force
majeure. Observing that hijackers do not board an airplane
through a blatant display of firepower and violent fury. The
robbers were able to gain entrance to the plane with the guns
they used already in their possession, which fact could not have
been prevented nor avoided by the defendant. Hence, making it
force majeure. The Court ruled that PAL could not be faulted
for want of diligence, particularly for failing to take positive
measures.
 Pan American World Airways vs. Jose Rapadas & CA
 Plane ticket is what is known as a contract of "adhesion", in
regards which it has been said that contracts of adhesion
wherein one party imposes a ready-made form of contract on
the other, as the plane ticket in the case at bar, are contracts not
entirely prohibited. The one who adheres to the contract is in
reality free to reject it entirely; if he adheres, he gives his
consent. If the loss of life or property is caused by the gross
negligence or arbitrary acts of the airline or the contents of the
lost luggage are proved by satisfactory evidence other than the
self-serving declarations of one party, the Court will not
hesitate to disregard the fine print in a contract of adhesion.
Otherwise, the Court is constrained to rule and to enforce the
contract as it is the only reasonable basis to arrive at a just
award.
 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 traveling 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. However,
the Supreme Court has held that benefits of limited liability are
subject to waiver such as when the air carrier failed to raise
timely objections during the trial when questions and answers
regarding the actual claims and damages sustained by the
passenger were asked.
 Norcum vs. Laguna Tayabas Bus Company
 While it is true the passengers of appellant's bus should not be
made to suffer for something over which they had no control,
fairness demands that in measuring a common carrier's duty
towards its passengers, allowance must be given to the reliance
that should be reposed on the sense of responsibility of all the
passengers in regard to their common safety. It is to be presumed
that a passenger will not take with him anything dangerous to
the lives and limbs of his co-passengers, not to speak of his own.
Of course, when there are sufficient indications that the
representations of the passenger regarding the nature of his
baggage may not be true, in the interest of the common safety of
all, the assistance of the police authorities may be solicited, not
necessarily to force the passenger to open his baggage, but to
conduct the needed investigation consistent with the rules of
propriety
 Mecenas vs. CA
 The behavior of the captain of the Don Juan in tills instance
playing mahjong before and up to the time of collision
constitutes behavior that is simply unacceptable on the part of
the master of a vessel to whose hands the lives and welfare of at
least 750 passengers had been entrusted. Whether or not
Captain Santisteban was "off-duty" or "on-duty" at or around
the time of actual collision is quite immaterial; there is, both
realistically speaking and in contemplation of law, no such thing
as "off-duty" hours for the master of a vessel at sea that is a
common carrier upon whom the law imposes the duty of
extraordinary diligence. Article 1755 repeats this same
qualification: "A common carrier is bound to carry the
passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons,
with due regard for all the circumstances."
 Negros Navigation vs. CA
 The Court relied on the findings of this Court in Mecenas v.
Intermediate Appellate Court, which case was brought for the
death of other passengers. In that case it was found that
although the proximate cause of the mishap was the negligence
of the crew. Negros Navigation was found equally negligent in
tolerating the playing of mahjong by the ship captain and other
crew members while on board the ship and failing to keep the
M/V Don Juan seaworthy so much so that the ship sank.
 Calalas vs. CA
 In quasi-delict, the negligence or fault should be clearly
established because it is the basis of the action, whereas in
breach of contract, the action can be prosecuted merely by
proving the existence of the contract and the fact that the
obligor, in this case the common carrier, failed to transport his
passenger safely to his destination. In case of death or injuries
to passengers, Art. 1756 of the Civil Code provides that
common carriers are presumed to have been at fault or to have
acted negligently unless they prove that they observed
extraordinary diligence.
 Pilapil vs. CA
 A common carrier does not give its consent to become an
insurer of any and all risks to passengers and goods. It merely
undertakes to perform certain duties to the public as the law
imposes, and holds itself liable for any breach thereof. A tort
committed by a stranger, which causes injury to a passenger
does not accord the latter a cause of action against the carrier.
The negligence for which a common carrier is held responsible
is the negligent omission by thecarrier's employees to prevent
the tort from being committed when the same could have been
foreseen and prevented by them.
 Philippine Rabbit Bus vs. IAC
 The principle about "the last clear" chance, would call for
application in a suit between the owners and drivers of the two
colliding vehicles. It does not arise where a passenger demands
responsibility from the carrier to enforce its contractual
obligations. For it would be inequitable to exempt the negligent
driver of the jeepney and its owners on the ground that the
other driver was likewise guilty of negligence.
 Bustamante vs. CA
 The doctrine of last clear chance means that even though a
person's own acts may have placed him in a position of peril,
and an injury results, the injured person is entitled to recovery.
A person who has the last clear chance or opportunity of
avoiding an accident, notwithstanding the negligent acts of his
opponent or that of a third person imputed to the opponent is
considered in law solely responsible for the consequences of
the accident. Since the case at bar is not a suit between the
owners and drivers of the colliding vehicles but a suit brought
by the heirs of the deceased passengers against both owners and
drivers of the colliding vehicles the court erred in absolving the
owner and driver of the cargo truck from liability.
 Lara vs. Valencia
 The deceased, as well as his companions who rode in the pick-up of
Valencia, were merely accommodation passengers who paid nothing
for the service and so they can be considered as invited guests within
the meaning of the law. As accommodation passengers or invited
guests, Valencia as owner and driver of the pick-up owes to them
merely the duty to exercise reasonable care so that they may be
transported safely to their destination. The rule is established by the
weight of authority that the owner or operator of an automobile owes
the duty to an invited guest to exercise reasonable care in its
operation, and not unreasonably to expose him to danger and injury
by increasing the hazard of travel. Since one riding in an automobile
is no less a guest because he asked for the privilege of doing so.
Valencia, therefore, is only required to observe ordinary care, and is
not in duty bound to exercise extraordinary diligence as required of a
common carrier by Philippine law.
 Necessito vs. Paras
 While the carrier is not an insurer of the safety of the
passengers, the manufacturer of the defective appliance is
considered in law the agent of the carrier, and the good repute
of the manufacturer will not relieve the carrier from liability.
The rationale of the carrier’s liability is the fact that the
passengers has no privity with the manufacturer of the
defective equipment; hence, he has no remedy against him,
while the carrier has.
 Japan Airlines vs. CA
 When a party is unable to fulfill his obligation because of force
majeure, the general rule is that he cannot be held liable for
damages for non-performance. When JAL was prevented from
resuming its flight to Manila due to the effects of the eruption,
whatever losses or damages in the form of hotel and meal
expenses the strandedpassengers incurred cannot be charged to
JAL. The predicament of the private respondents was not due
to the fault or negligence of JAL. JAL had the duty to arrange
the respondents’ flight back to Manila. However, it failed to
look after the comfort and convenience of its passengers when
it made the passengers arrange their flight back to Manila on
their own and after waiting in the airport for a whole day.
 Jesusa Vda. De Nueca vs. Manila Railroad
 Even disregarding the matter of tickets, and assuming Nueca
intended to be a passenger, he was never accepted as such by
MRC as he did not present himself at the proper place and in a
proper manner to be transported. Nueca was not a passenger
thus, MRC did not owe him extraordinary diligence. While
railroad companies are not bound to the same degree of care in
regard to strangers who are unlawfully upon the premises of its
passengers, it may still be liable to such strangers for negligent
or tortious acts. The train was under the complete control of the
railroad company at the time of the accident. The baggage car
would not have been derailed if the train had been properly
operated.
 Dangwa Transportation vs. CA
 The victim herein, by stepping and standing on the platform of
the bus, is already considered a passenger and is entitled all the
rights and protection pertaining to such a contractual relation.
Hence, it has been held that the duty which the carrier
passengers owes to its patrons extends to persons boarding cars
as well as to those alighting therefrom. It is the duty of
common carriers of passengers, including common carriers by
railroad train, streetcar, or motorbus, to stop their conveyances
a reasonable length of time in order to afford passengers an
opportunity to board and enter, and they are liable for injuries
suffered by boarding passengers resulting from the sudden
starting up or jerking of their conveyances while they are doing
so.
 La Mallorca vs CA
 The relation of carrier and passenger does not necessarily cease
where the latter, after alighting from the car, aids the carrier's
servant or employee in removing his baggage from the car. The
issue to be determined here is whether as to the child, who was
already led by the father to a place about 5 meters away from
the bus, the liability of the carrier for her safety under the
contract of carriage also persisted. It has been recognized as a
rule that the relation of carrier and passenger does not cease at
the moment the passenger alights from the carrier's vehicle at a
place selected by the carrier at the point of destination, but
continues until the passenger has had a reasonable time or a
reasonable opportunity to leave the carrier's premises.
 Aboitiz Shipping vs. CA
 All persons who remain on the premises a reasonable time after
leaving the conveyance are to be deemed passengers, and what
is a reasonable time or a reasonable delay within this rule is to
be determined from all the circumstances, and includes a
reasonable time to see after his baggage and prepare for his
departure. The carrier-passenger relationship is not terminated
merely by the fact that the person transported has been carried
to his destination if, for example, such person remains in the
carrier's premises to claim his baggage. Yet, even if he had
already disembarked an hour earlier, his presence in petitioner's
premises was not withoutcause. The victim had to claim his
baggage which was possible only one (1) hour after the vessel
arrived since it was admittedly standard procedure in the case
of petitioner's vessels that the unloading operations shall start
only after that time.
 Mallari vs. CA
 The rule is settled that a driver abandoning his proper lane for
the purpose of overtaking another vehicle in an ordinary
situation has the duty to see to it that the road is clear and not to
proceed if he cannot do so in safety. Under Art. 2185 of the
Civil Code, 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 a traffic regulation.
Further, pursuant to Art. 1759 of the same Code, it is liable for
the death of or injuries to passengers through the negligence or
willful acts of the formers employees. This liability of the
common carrier does not cease upon proof that it exercised all
the diligence of a good father of a family in the selection of its
employees.
 LRTA vs. Navidad
 Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the trip
but for so long as the passengers are within its premises and
where they ought to be in pursuance to the contract of carriage.
The statutory provisions render a common carrier liable for
death of or injury to passengers (a) through the negligence or
willful acts of its employees or (b) on account of willful acts or
negligence of other passengers or of strangers if the common
carriers employees through the exercise of due diligence could
have prevented or stopped the act or omission. The foundation
of LRTAs liability is the contract of carriage and its obligation
to indemnify the victim arises from the breach of that contract
by reason of its failure to exercise the high diligence required
of the common carrier.
 Pestaño vs. Sumayang
 As a professional driver operating a public transport bus,
Pestaño should have anticipated that overtaking at a junction
was a perilous maneuver and should have exercised extreme
caution. When an injury is caused by the negligence of a
servant or an employee, the master or employer is presumed to
be negligent either in the selection or in the supervision of that
employee. This presumption may be overcome only by
satisfactorily showing that the employer exercised the care and
the diligence of a good father of a family in the selection and
the supervision of its employee. Allowing Pestaño to ply his
route with a defective speedometer showed laxity on the part of
Metro Cebu in the operation of its business and in the
supervision of its employees. The negligence alluded is in its
supervision over its driver, not in that which directly caused the
accident.
 Ludo vs. CA
 Doctrine of res ipsa loquitur (the thing speaks for itself)
contemplates that where the thing which causes injury is shown to
be under the management of the defendant, and the accident is
such as in the ordinary course of things does not happen if those
who have the management use proper care, it affords reasonable
evidence, in the absence of an explanation by the defendant, that
the accident arose from want of care. The doctrine recognizes that
parties may establish prima facie negligence without direct proof
and allows the principle to substitute for specific proof of
negligence. This is invoked when under the circumstances, direct
evidence is absent and not readily available. Petitioner did not
have direct evidence on what transpired within as the officers and
crew maneuvered the vessel to its berthing place. Applying now
the above, there exists a presumption of negligence against private
respondents which we opine the latter failed to overcome.
 Philippine Rabbit Lines vs. IAC
 The driver cannot be held jointly and severally liable with the
carrier in case of breach of the contract of carriage. The
rationale behind this is readily discernible. Firstly, the contract
of carriage is between the carrier and the passenger, and in the
event of contractual liability, the carrier is exclusively
responsible to the passenger, even if such breach be due to the
negligence of his driver. . Secondly, if We make the driver
jointly and severally liable with the carrier, that would make
the carrier's liability personal instead of merely vicarious and
consequently, entitled to recover only the share which
corresponds to the driver, contradictory to the explicit provision
of Article 2181 of the New Civil Code.
 Juntilla vs. Fontanar
 While it may be true that the tire that blew-up was still good
because the grooves of the tire were still visible, this fact alone
does not make the explosion of the tire a fortuitous event. No
evidence was presented to show that the accident was due to
adverse road conditions or that precautions were taken by the
jeepney driver to compensate for any conditions liable to cause
accidents. Common carriers should teach their drivers not to
overload their vehicles, not to exceed safe and legal speed
limits, and to know the correct measures to take when a tire
blows up thus insuring the safety of passengers at all times.
 Bayasen vs. CA
 It is obvious that the proximate cause of the tragedy was the
skidding of the rear wheels of the jeep and not the
"unreasonable speed" of the petitioner because there is no
evidence on record to prove or support the finding that the
petitioner was driving at "an unreasonable speed". It is a well-
known physical tact that cars may skid on greasy or slippery
roads, as in the instant case, without fault on account of the
manner of handling the car. Skidding means partial or complete
loss of control of the car under circumstances not necessarily
implying negligence. It may occur without fault. Under the
particular circumstances of the instant case, the petitioner-
driver who skidded could not be regarded as negligent, the
skidding being an unforeseen event, so that the petitioner had a
valid excuse for his departure from his regular course.
 Cervantes vs. CA
 Under Article 1989 of the New Civil Code, the acts an agent
beyond the scope of his authority do not bind the principal,
unless the latter ratifies the same expressly or impliedly.
Furthermore, when the third person (herein petitioner) knows
that the agent was acting beyond his power or authority, the
principal cannot be held liable for the acts of the agent. If the
said third person is aware of such limits of authority, he is to
blame, and is not entitled to recover damages from the agent,
unless the latter undertook to secure the principal's ratification.
Petitioner knew there was a strong possibility that he could not
use the subject ticket, so much so that he bought a back-up
ticket to ensure his departure. Should there be a finding of bad
faith, it should be on the petitioner. What the employees of PAL
did was one of simple negligence. No injury resulted on the part
of petitioner.
 Calalas vs. CA
 The fact that Sunga was seated in an "extension seat" placed
her in a peril greater than that to which the other passengers
were exposed. Therefore, not only was petitioner unable to
overcome the presumption of negligence imposed on him for
the injury sustained by Sunga, but also, the evidence shows he
was actually negligent in transporting passengers.
 Gillaco vs. Manila Railroad
 There can be no quarrel with the principle that a passenger is
entitled to protection from personal violence by the carrier or its
agents or employees, since the contract of transportation
obligates the carrier to transport a passenger safely to his
destination. But under the law of the case, this responsibility
extends only to those that the carrier could foresee or avoid
through the exercise of the degree of car and diligence required
of it. The act of guard Devesa in shooting passenger Gillaco
(because of a personal grudge nurtured against the latter since
the Japanese occupation) was entirely unforeseeable by the
Manila Railroad Co. The latter had no means to ascertain or
anticipate that the two would meet, nor could it reasonably
foresee every personal rancor that might exist between each one
of its many employees and any one of the thousands of eventual
passengers riding in its trains.
 Maranan vs. Perez
 Defendant-appellant relies solely on the ruling enunciated in
Gillaco v. Manila Railroad that the carrier is under no absolute
liability for assaults of its employees upon the passengers. The
attendant facts and controlling law of that case and the one at
bar are very different however. In the Gillaco case, the
passenger was killed outside the scope and the course of duty
of the guilty employee. In the case at bar, the killing was
perpetrated by the driver of the very cab transporting the
passenger, in whose hands the carrier had entrusted the duty of
executing the contract of carriage. Unlike the Gillaco case, the
killing of the passenger here took place in the course of duty of
the guilty employee and when the employee was acting within
the scope of his duties. The death of the passenger in the
Gillaco case was truly a fortuitous event which exempted the
carrier from liability
 Doctrine of Respondeat Superior –
the carrier is liable only when the act of the employee is within
the scope of his authority and duty. It is not sufficient that the act
be within the course of employment only.
 Principle of Implied Duty –
it is enough that the assault happens within the course of the
employee's duty. It is no defense for the carrier that the act was
done in excess of authority or in disobedience of the carrier's
orders. The carrier's liability here is absolute in the sense that it
practically secures the passengers from assaults committed by its
own employees.
 PNR vs. CA
 The petitioner does not deny, that the train boarded by the
deceased Winifredo Tupang was so over-crowded that he and
many other passengers had no choice but to sit on the open
platforms between the coaches of the train. Death or any injury
suffered by any of its passengers gives rise to the presumption that
it was negligent in the performance of its obligation under the
contract of carriage. But while petitioner failed to exercise
extraordinary diligence as required by law, it appears that the
deceased was chargeable with contributory negligence. Since he
opted to sit on the open platform between the coaches of the train,
he should have held tightly and tenaciously on the upright metal
bar found at the side of said platform to avoid falling off from the
speeding train. Such contributory negligence, while not exempting
the PNR from liability, nevertheless justified the deletion of the
amount adjudicated as moral damages.
 Isaac vs. Al Ammen
 Principles governing the liability of a common carrier:
1) the liability of a carrier is contractual and arises upon breach of
its obligation;
2) a carrier is obliged to carry its passenger with the utmost
diligence of a very cautious person, having due regard for all the
circumstances;
3) a carrier is presumed to be at fault or to have acted negligently
in case of death of, or injury to, passengers, it being its duty to
prove that it exercised extraordinary diligence; and
4) the carrier is not an insurer against all risks of travel.
One who is placed in such a predicament cannot exercise such
coolness or accuracy of judgment as is required of him under
ordinary circumstances and he cannot therefore be expected to
observe the same judgment, care and precaution as in the latter. .
Considering all the circumstances, the Court is persuaded to
conclude that the driver of the bus has done what a prudent man
could have done to avoid the collision and in our opinion this
relieves appellee from legibility under our law.
 A circumstances which miliates against the stand of appellant is
the fact borne out by the evidence that when he boarded the bus
in question, he seated himself on the left side thereof resting his
left arm on the window sill but with his left elbow outside the
window, this being his position in the bus when the collision
took place. It is for this reason that the collision resulted in the
severance of said left arm from the body of appellant thus
doing him a great damage. It is therefore apparent that
appellant is guilty of contributory negligence. Had he not
placed his left arm on the window sill with a portion thereof
protruding outside, perhaps the injury would have been avoided
 Bachelor Express vs. CA
 The running amuck of the passenger was the proximate cause of
the incident as it triggered off a commotion and panic among the
passengers such that the passengers started running to the sole exit
shoving each other resulting in the falling off the bus by
passengers Beter and Rautraut causing them fatal injuries. The
sudden act of the passenger who stabbed another passenger in the
bus is within the context of force majeure. In order that a common
carrier may be absolved from liability in case of force majeure, it
is not enough that the accident was caused by force majeure. The
common carrier must still prove that it was not negligent in
causing the injuries resulting from such accident. However, the
petitioners failed to prove that the deaths of the two passengers
were exclusively due to force majeure and not to the failure of the
petitioners to observe extraordinary diligence in transporting
safely the passengers to their destinations as warranted by law.
 Fortune Express vs. CA
 Despite warning by the Philippine Constabulary at Cagayan de
Oro that the Maranaos were planning to take revenge on the
petitioner by burning some of its buses and the assurance of
petitioner’s operation manager, Diosdado Bravo, that the
necessary precautions would be taken, petitioner did nothing to
protect the safety of its passengers. Had petitioner and its
employees been vigilant they would not have failed to see that
the malefactors had a large quantity of gasoline with them.
Under the circumstances, simple precautionary measures to
protect the safety of passengers, such as frisking passengers and
inspecting their baggage, before allowing them on board could
have been employed without violating the passenger’s
constitutional rights. Deceased cannot be held guilty of
contributory negligence for his attempt to help the driver of the
bust by pleading for his life against the malefactors.
 Manila Railroad vs. Ballesteros
 No professional chauffeur shall permit any unlicensed person to
drive the motor vehicle under his control, or permit a person,
sitting beside him or in any other part of the car, to interfere
with him in the operation of the motor vehicle, by allowing said
person to take hold of the steering wheel, or in any other
manner take part in the manipulation or control of the car.
 Smith Bell vs. Borja
 Petitioner’s vessel was carrying chemical cargo. While
knowing that their vessel was carrying dangerous inflammable
chemicals, its officers and crew failed to take all the necessary
precautions to prevent an accident. Petitioner was, therefore,
negligent. Hence, the owner or the person in possession and
control of a vessel and the vessel are liable for all natural and
proximate damage caused to persons and property by reason of
negligent management or navigation.
 Yobido vs. CA
 The explosion of the new tire may not be considered a
fortuitous event. There are human factors involved in the
situation. The fact that the tire was new did not imply that it
was entirely free from manufacturing defects or that it was
properly mounted on the vehicle. The common carrier must
still prove that it was not negligent in causing the death or
injury resulting from an accident.
 Bayasen vs. CA
 Under the particular circumstances of the instant case, the
petitioner- driver who skidded could not be regarded as
negligent, the skidding being an unforeseen event, so that the
petitioner had a valid excuse for his departure from his regular
course. The negligence of the petitioner not having been
sufficiently established, his guilt of the crime charged has not
been proven beyond reasonable doubt. He is, therefore, entitled
to acquittal.
 Gatchalian vs. Delim
 For a waiver to be valid and effective, it must not be contrary to
law, morals, public policy or good customs. Waiver (Joint
Affidavit) signed by the victims cannot be considered as a valid
waiver limiting the bus company’s liability after the incident
took place as well as waive their right to action or file a
complaint.
 Fortune Express vs. CA
 The armed men actually allowed Atty. Caorong to retrieve
something from the bus. What apparently angered them was his
attempt to help the driver of the bus by pleading for his life. He
was playing the role of the Good Samaritan. Certainly, this act
cannot considered an act of negligence, let alone recklessness.
 Singson vs. CA
 Cathay cannot argue that their liability is limited upon the fact
that Singson was a “chance passenger”. The round trip ticket
issued by the carrier to the passenger was in itself a complete
written contract by and between the carrier and the passenger. It
had all the elements of a complete written contract. In fact, the
contract of carriage in the instant case was already partially
executed as the carrier complied with its obligation to transport
the passenger to his destination.
 Bill of Lading – It is a written acknowledgment of the
 receipt of goods and an agreement to transport and to deliver
them at a specified place to a person named or on his or her
order. Not indispensable for creation of contract of carriage.
 FUNCTIONS
a. Operates as a receipt for the goods shipped. Carries a
presumption that goods were delivered to the carrier issuing the
bill.
b. Bill of lading operates as a contract by which three parties
named the shipper, the carrier, and the consignee.
c. It is also a document title. Bill lading issued by the master to
the charterer, as shipper, is in fact and in legal contemplation
merely a receipt and a document title.
 Heacock vs. Macondary
 A common carrier, by stipulations inserted in the bill of lading,
can limit its liability for the loss of or damage to the cargo to an
agreed valuation.
 Three kinds of stipulations have often been made in a bill of
lading:
1. One exempting the carrier from any and all liability for loss or
damage occasioned by its own negligence.
2. One providing for an unqualified limitation of such liability to
an agreed valuation.
3. One limiting the liability of the carrier to an agreed valuation
unless the shipper declares 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. The present
case falls within the third stipulation.
 Macondray Co. vs. Acting Commissioner of Customs
 This is for the simple reason that while a manifest is a
declaration of the entire cargo, a bill of lading is but a
declaration of a specific part of the cargo and is a matter of
business convenience based exclusively on a contract.
 MANIFEST CARGO to furnish the customs officers with a list
to check against, to inform our revenue officers what goods are
being brought into the country, and to provide a safeguard
against goods being brought into this country on a vessel and
then smuggled ashore .
 BILL OF LADING ordinarily merely a convenient commercial
instrument designed to protect the importer or consignee
absolutely essential to the exportation or importation of
property in all vessels.
 The purpose served by the manifest is far different from that of

the bill of lading, the Court cannot accept or place an
imprimatur on the contention of petitioner that the entries in the
bill of lading adequately supplied the deficiency of the manifest
and cured it of its infirmity.
 Magellan Manufacturing vs. CA
 Transhipment is defined as the act of taking cargo out of one
ship and loading it in another or; the transfer of goods from the
vessel stipulated in the contract of affreightment to another
vessel before the place of destination named in the contract has
been reached.
 It is a long standing jurisprudential rule that a bill of lading
operates both as a receipt and as a contract. It is a receipt for
the goods shipped and a contract to transport and deliver the
same as therein stipulated. The holding in most jurisdictions
has been that a shipper who receives a bill of lading without
objection after an opportunity to inspect it, and permits the
carrier to act on it by proceeding with the shipment is presumed
to have accepted it as correctly stating the contract and to have
assented to its terms. In other words, the acceptance of the bill
without dissent raises the presumption that all the terms therein
were brought to the knowledge of the shipper and agreed to by
him and, in the absence of fraud or mistake, he is estopped
from thereafter denying that he assented to such terms.
 Saludo vs. CA
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
eo instanti.
 Ysmael vs. Barretto
 The parties may, if they see fit, fix by agreement a shorter time
for the bringing of suit on the contract than that provided by the
statute of limitations, and if the period therein limited is
reasonable, suit must be brought within that time or the
shipper’s right of action will be barred.
 Such a provision is prohibited by no rule of law nor by any
 consideration of public policy. Nor is it at all affected by the
existence within the jurisdiction of a statutory or constitutional
prohibition against carriers limiting or restricting their common law
liability, since it is held that such a stipulation does not in any way
defeat the complete vestiture of the right to recover, but merely
requires the assertion of that right by action at an earlier period than
would be necessary to defeat it through the operation of the ordinary
statute of limitations. But the limitation must be reasonable, and if
the period of time specified is such that under the facts of the
particular case the shipper could not with reasonable diligence be
enabled to bring suit before it expired, the attempted limitation is
void. Thus, a provision that suit must be brought within thirty days
after the loss or damage occurred has been held unreasonable.
carrier cannot limit its liability for injury to or loss of goods shipped
where such injury or loss was caused by its own negligence.
 Shewaram vs. PAL
 It cannot be said that the appellee had actually entered into a
contract with the appellant, embodying the conditions as
printed at the back of the ticket stub that was issued by the
appellant to the appellee. The fact that those 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.
 Ong Yiu vs. CA
 The total liability of the Carrier for lost or damaged baggage of
the passenger is LIMITED TO P100.00 for each ticket unless a
passenger declares a higher valuation in excess of P100.00, but
not in excess, however, of a total valuation of P1,000.00 and
additional charges are paid pursuant to Carrier's tariffs. There is
no dispute that petitioner did not declare any higher value for
his luggage, much less did he pay any additional transportation
charge.
 While it may be true that petitioner had not signed the plane
ticket, he is nevertheless bound by the provisions thereof.
"Such provisions have been held to be a part of the contract of
carriage, and valid and binding upon the passenger regardless
of the latter's lack of knowledge or assent to the regulation"
(known as contract of adhesion). Considering, therefore, that
petitioner had failed to declare a higher value for his baggage,
he cannot be permitted a recovery in excess of P100.00.
Besides, passengers are advised not to place valuable items
inside their baggage but "to avail of our V-cargo service ". It is
likewise to be noted that there is nothing in the evidence to
show the actual value of the goods allegedly lost by petitioner.
 Aboitiz Shipping vs. CA
 While it is true that in the bill of lading there is such stipulation
that the liability of the carrier is US$500.00 per
package/container/customary freight, there is an exception, that
is, when the nature and value of such goods have been declared
by the shipper before shipment and inserted in the bill of
lading. In no event shall the carrier be liable for more than the
amount of damage actually sustained. Neither the carrier nor
the ship shall be responsible in any event for loss or damage to
or in connection with the transportation of the goods if the
nature or value thereof has been knowingly and fraudulently
misstated by the shipper in the bill of lading. In this case the
description of the nature and the value of the goods shipped are
declared and reflected in the bills of lading. Thus, it is the basis
of the liability of the carrier as the actual value of the loss.
 Sea-Land vs. IAC
 Sec. 4(5) of Carriage of Goods by Sea Act reads: Neither the
carrier nor the ship shall in any event be or become liable for
any loss or damage to or in connection with the transportation
of goods in an amount exceeding $500 per package lawful
money of the United States, or in case of goods not shipped in
packages, per customary freight unit, or the equivalent of that
sum in other currency, unless the nature and value of such
goods have been declared by the shipper before shipment and
inserted in the bill of lading. This declaration, if embodied in
the bill of lading, shall be prima facie evidence, but shall not be
conclusive on the carrier.
 There is no question of right of a consignee in a bill of lading to
recover from the carrier shipper for loss of, or damage to,
goods being transported under said bill, although that document
may have been drawn up only by the consignor and the carrier
without the intervention of the consignee.
 Citadel Lines vs. CA
 It is clearly and expressly provided under Clause 6 of the
aforementioned bills of lading issued by the CARRIER that its
liability is limited to $2.00 per kilo. Basic is the rule, long since
enshrined as a statutory provision that a stipulation limiting the
liability of the carrier to the value of the goods appearing in the
bill of lading, unless the shipper or owner declares a greater
value, is binding. Further, a contract fixing the sum that may be
recovered by the owner or shipper for the loss, destruction or
deterioration of the goods is valid, if it is reasonable and just
under the circumstances, and has been fairly and freely agreed
upon.
 Everett Steamship
 In the bill of lading, the carrier made it clear that its liability
would only be up to One Hundred Thousand (Y100,000.00)
Yen. However, the shipper, Maruman Trading, had the option
to declare a higher valuation if the value of its cargo was higher
than the limited liability of the carrier. Considering that the
shipper did not declare a higher valuation, it had itself to blame
for not complying with the stipulations. To defeat the carriers’
limited liability, the aforecited Clause 18 of the bill of lading
requires that the shipper should have declared in writing a
higher valuation of its goods before receipt thereof by the
carrier and insert the said declaration in the bill of lading, with
the extra freight paid. These requirements in the bill of lading
were never complied with by the shipper, hence, the liability of
the carrier under the limited liability clause stands.
 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.
 The Court, in addition, held that benefits of limited liability are
subject to waiver such as when the air carrier failed to raise
timely objections during the trial when questions and answers
regarding the actual claims and damages sustained by the
passenger were asked. Given the foregoing postulates, the
inescapable conclusion is that BA had waived the defense of
limited liability when it allowed Mahtani to testify as to the
actual damages he incurred due to the misplacement of his
luggage, without any objection.
 Sweet Lines vs. Teves
 The Supreme Court held that the condition printed at the back
of the ticket limiting the venue of actions arising from the
contract is void and unenforceable because it subverts the
public policy on transfer of venue of proceeding. Furthermore,
it will prejudice the rights and interests of innumerable
passengers located in different places of the country, who,
under the condition, will have to file suits against petitioner
only in the City of Cebu. Thus, such condition will likewise
defeat the ends of justice.
 Alitalia vs. IAC
 Under the Warsaw Convention, an air carrier is made liable for
damages for the delay in the transportation by air of passengers,
luggage or goods. The Convention also purports to limit the
liability of the carriers. The Warsaw Convention however
denies to the carrier availment "of the provisions which exclude
or limit his liability, if the damage is caused by his willful
misconduct or by such default on his part as, in accordance
with the law of the court seized of the case, is considered to be
equivalent to willful misconduct.”
 In the case at bar, no bad faith or otherwise improper conduct
may be ascribed to the employees of petitioner airline; and Dr.
Pablo's luggage was eventually returned to her, belatedly, it is
true, but without appreciable damage. As the petitioner put it,
she "was really shocked and distraught and confused."
Certainly, the compensation for the injury suffered by Dr. Pablo
cannot under the circumstances be restricted to that prescribed
by the Warsaw Convention for delay in the transport of
baggage.
 Pan American World Airways vs. IAC
 Petitioner cites the case of Ong Yiu, where the Court sustained
the validity of a printed stipulation at the back of an airline
ticket limiting the liability of the carrier for lost baggage to a
specified amount and ruled that the carrier's liability was
limited to said amount since the passenger did not declare a
higher value, much less pay additional charges. The petition
has merit, and Ong Yiu is applicable to the instant case. In view
thereof petitioner's liability for the lost baggage is limited to
$20.00 per kilo or $600.00, as stipulated at the back of the
ticket.
 China Airlines vs. Chiok
 It is significant to note that the contract of air transportation
was between CAL and respondent, with the former endorsing
to PAL the Hong Kong to Manila segment of the journey. Such
contract of carriage has always been treated in this jurisdiction
as a single operation. Warsaw Convention provides that:
transportation to be performed by several successive air carriers
shall be deemed, for the purposes of this Convention, to be one
undivided transportation, if it has been regarded by the parties
as a single operation, whether it has been agreed upon under
the form of a single contract or of a series of contracts.
 Since he had secured confirmation of his flight not only once,
but twice by personally going to the carrier’s offices where he
was consistently assured of a seat thereon PAL’s negligence
was so gross and reckless that it amounted to bad faith. In view
of the foregoing, we rule that moral and exemplary damages
were properly awarded by the lower courts.
 Santos III vs. Northwest Orient Airlines
 The Warsaw Convention is a treaty commitment voluntarily
assumed by the Philippine government and, as such, has the
force and effect of law in this country.Santos III vs. Northwest
Orient Airlines The Warsaw Convention is a treaty commitment
voluntarily assumed by the Philippine government and, as such,
has the force and effect of law in this country.
 The place of destination, within the meaning of the Warsaw
Convention, is determined by the terms of the contract or
carriage or, specifically in this case, the ticket. Examination of
petitioner’s ticket shows that his ultimate destination is San
Francisco. Although the date of the return flight was left open,
the contract of carriage between the parties indicates that NOA
was bound to transport petitioner from Manila to San
Francisco. Manila should therefore be considered merely an
agreed stopping place and not the destination. Hence,
Philippine courts have no jurisdiction over the case.
 United Airlines vs. Uy
 Supreme Court held that although the 2-year prescriptive
period under the Warsaw Convention has lapsed, it did not
preclude the application of other pertinent provisions of the
Civil Code which prescribe a different period or procedure for
instituting the action, specifically, Art. 1146 thereof which
prescribes four (4) years for filing an action based on torts.
Thus, the action for damages could still be filed.
 Supreme Court found that there was an exception to the
applicability of the 2-year prescriptive period – that is when the
airline employed delaying tactics and gave the passenger the
run-around. Verily, respondent filed his complaint more than
two (2) years later, but it is obvious that respondent was
forestalled from immediately filing an action by but not giving
in to his demands.
 Also, the Convention does not preclude the operation of the
Civil Code and other pertinent laws. It does not regulate, much
less exempt, the carrier from liability for damages for violating
the rights of its passengers under the contract of carriage,
especially if willful misconduct on the part of the carrier's
employees is found or established.
 Spouses Fabre vs. CA
 The Supreme Court held that this case actually involves a
contract of carriage. Petitioners, the Fabres, did not have to be
engaged in the business of public transportation for the
provisions of the Civil Code on common carriers to apply to
them. Art. 1732 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.
 Air France vs. Carrascoso
 There exists a contract of carriage between Air France and
Carrascoso. There was a contract to furnish Carrasocoso a first
class passage; Second, That said contract was breached when
Air France failed to furnish first class transportation at
Bangkok; and Third, that there was bad faith when Air France’s
employee compelled Carrascoso to leave his first class
accommodation berth “after he was already, seated” and to take
a seat in the tourist class, by reason of which he suffered
inconvenience, embarrassments and humiliations, thereby
causing him mental anguish, serious anxiety, wounded feelings
and social humiliation, resulting in moral damages.
 There is also a tortuous act based on culpa aquiliana.
Passengers do not contract merely for transportation. They have
a right to be treated by the carrier’s employees with kindness,
respect, courtesy and due consideration. They are entitled to be
protected against personal misconduct, injurious language,
indignities and abuses from such employees.
 Tiu vs. Arriesgado
 This is because under the said contract of carriage, the
petitioners assumed the express obligation to transport the
respondent and his wife to their destination safely and to
observe extraordinary diligence with due regard for all
circumstances. Any injury suffered by the passengers in the
course thereof is immediately attributable to the negligence of
the carrier. Upon the happening of the accident, the
presumption of negligence at once arises, and it becomes the
duty of a common carrier to prove that he observed
extraordinary diligence in the care of his passengers.
 Phil. Am. Gen. Insurance & Tagum vs. Sweet Lines
 Philamgen asserted that the bills of lading with prescriptive
period were contracts of adhesion and that such provisions
were “contrary to law and public policy” and thus, Sweet Lines
cannot avail of such prescriptive period as a valid defense. The
SC said that Philamgen’s failure to deny under oath the
existence of the bills of lading was tantamount to an admission
of its existence.
 In Ong Yu vs CA SC held that contracts of adhesion are not
entirely prohibited. The one who adheres to the contract is in
reality free to reject it entirely; if he adheres he gives his
consent. Philamgen, thus, gave its consent to the contracts–the
bills of lading–including consent to the prescriptive periods
therein. The SC also agreed with the CA that parties can
stipulate a shorter prescriptive period for the filing of suits.
 The SC said ruled the validity of a contractual limitation of
time for filing the suit itself against a carrier shorter than the
statutory period therefor has generally been upheld as such
stipulation merely affects the shipper's remedy and does not
affect the liability of the carrier. In the absence of any statutory
limitation and subject only to the requirement on the
reasonableness of the stipulated limitation period, the parties to
a contract of carriage may fix by agreement a shorter time for
the bringing of suit on a claim for the loss of or damage to the
shipment than that provided by the statute of limitations.
 Dole Phils. Inc. vs. Maritime Co. of the Philippines
 Carriage of Goods by Sea Act, in its Section 3, paragraph 6,
provides that: the carrier and the ship shall be discharged from
all liability in respect of loss or damage unless suit is brought
within one year after delivery of the goods or the date when the
goods should have been delivered; Provided, That, if a notice of
loss or damage, either apparent or conceded, is not given as
provided for in this section, that fact shall not affect or
prejudice the right of the shipper to bring suit within one year
after the delivery of the goods or the date when the goods
should have been delivered
 The substance of its argument is that since the provisions of the
Civil Code are, by express mandate of said Code, suppletory of
deficiencies in the Code of Commerce and special laws in
matters governed by the latter, and there being "a patent
deficiency with respect to the tolling of the prescriptive period"
provided for in the Carriage of Goods by Sea Act, prescription
under said Act is subject to the provisions of Article 1155 of the
Civil Code on tolling.
 These arguments might merit weightier consideration were it
not for the fact that the question has already received a
definitive answer. To which, the Supreme Court ruled that
in a case governed by the Carriage of Goods by Sea Act, the
general provisions of the Code of Civil Procedure on
prescription should not be made to apply.
 Similarly, we now hold that in such a case the general
provisions of the new Civil Code (Art. 1155) cannot be
made to apply, as such application would have the effect of
extending the one-year period of prescription fixed in the law. It
is desirable that matters affecting transportation of goods by sea
be decided in as short a time as possible; the application of the
provisions of Article 1155 of the new Civil Code would
unnecessarily extend the period and permit delays in the
settlement of questions affecting transportation, contrary to the
clear intent and purpose of the law.
 Maritime Agencies vs. CA
 A voyage charter being a private carriage, the parties may
freely contract respecting liability for damage to the goods and
other matters. The basic principle is that "the responsibility
for cargo loss falls on the one who agreed to perform the duty
involved" in accordance with the terms of most voyage
charters. This is true in the present cases where the charterer
was responsible for loading, stowage and discharging at the
ports visited, while the owner was responsible for the care of
the cargo during the voyage.
 The liability imposable upon it cannot be borne by
Maritime which, as a mere agent, is not answerable for
injury caused by its principal. It is a well-settled principle that
the agent shall be liable for the act or omission of the principal
only if the latter is undisclosed. The charterer did not represent
itself as a carrier and indeed assumed responsibility ability
only for the unloading of the cargo, i.e, after the goods were
already outside the custody of the vessel. Maritime acted in
representation of the charterer and not of the vessel; thus
cannot be considered a ship agent. As a mere charterer's
agent, it cannot be held solidarily liable with
Transcontinental for the losses/damages to the cargo outside
the custody of the vessel.
 Zulueta vs. Pan American World Airways
 Passengers do not contract merely for transportation. They
have a right to be treated by the carrier's employees with
kindness, respect, courtesy and due consideration. They are
titled to be protected against personal misconduct, injurious
language, indignities and abuses from such employees. So
it is, that any rude or discourteous conduct on the part of
employees towards a passenger gives the latter an action for
damages against the carrier. Where a conductor uses
language to a passenger which is calculated to insult,
humiliate, or wound the feelings of a person of ordinary
feelings and sensibilities, the carrier is liable, because the
contract of carriage impliedly stipulates for decent,
courteous, and respectful treatment, at hands of the carrier's
employees.
 Gatchalian vs. Delim
 To uphold a supposed waiver of any right to claim
damages by an injured passenger, under circumstances like
those exhibited in this case, would be to dilute and weaken
the standard of extraordinary diligence exacted by the law
from common carriers and hence to render that standard
unenforceable.
 Because what is involved here is the liability of a common
carrier for injuries sustained by passengers in respect of whose
safety a common carrier must exercise extraordinary
diligence, SC construed any such purported waiver most
strictly against the common carrier. For a waiver to be valid
and effective, it must not be contrary to law, morals, public
policy or good customs.
 Marchan vs. Mendoza
 The riding public is not expected to inquire from time to time
before they board the passenger bus whether or not the driver
who is at the steering wheel of said bus was authorized to
drive said vehicle or that said driver is acting within the scope
of his authority and observing the existing rules and
regulations required of him by the management. To hold
otherwise would in effect render the provision of law
(Article 1759) ineffective.
 De Caliston vs. CA
 Under Article 2206 of the Civil Code: The amount of
damages for death caused by a crime or quasi-delict shall be at
least three thousand pesos, even though there may have been
mitigating circumstances. In addition, the defendant shall
be liable for the loss of the earning capacity of the
deceased, and the indemnity shall be paid to the heirs of the
latter. The pension of the decedent being a sure income that
was cut short by her death for which Dalmacio was responsible,
the surviving heir of the former is entitled to the award of P
10,000.00 which is just equivalent to the pension the
decedent would have received for one year if she did not die.
 Trans World Airlines vs. CA
 The Court held that the petitioner is liable for moral and
exemplary damages. The discrimination in this case is
obvious and the humiliation brought to the respondent is
indisputable. The petitioner showed lack of care in
accommodating the respondent in the class that the latter
contracted. In addition, the petitioner rudely informed the
respondent of such downgrading of class. Such awarding of
damages would serve as an example and a discouragement
to carriers who may repeat such oppressive and
discriminatory acts.
 Prudenciado vs. Alliance Transport System Inc.
 A careful review of the records makes it readily apparent that
the injuries sustained by Dra. Prudenciado are not as serious or
extensive as they were claimed to be, to warrant the
damages awarded by the trial court. In fact, a closer scrutiny
of the exhibits showed only a moderate damage to the car,
not to mention the fact that such injuries were not
supported by the medical findings presented.
 Unquestionably, therefore, the damages imposed by the lower
court should be reduced to more reasonable level. On the other
hand, it will be observed that the reduction of the damages
made by the Court of Appeals is both too drastic and
unrealistic, to pass the test of reasonableness, which appears to
be the underlying basis to justify such reduction. While the
damages sought to be recovered were not satisfactorily
established to the extent desired by the petitioner, it was
nonetheless not disputed that an accident occurred due to the
fault and negligence of the respondent.
 Maritime Law – is the system of laws which particularly relates
to the affairs and business of:
a. the sea
b. to ships
c. their crews
d. navigation
e. marine conveyances
 Vessel – is any kind, class or type of craft or artificial
contrivance:
a. capable of floating in water
b. capable of being used as a means of water transport for carriage
of passenger or cargo or both
c. capable of utilizing its own motive power or that of another
 CHARACTERISTICS OF MARITIME TRANSACTION
 1. Real Similar to transaction over real property with
respect to effectivity against third persons which is done
through registration
 2. Hypothecary The liability of the carrier in connection is
confined to the vessel, which stands as the guaranty for
their settlement
 LIMITED LIABILITY RULE:
 The exclusively real and hypothecary nature of maritime law
operates to limit the liability of the ship-owner to the value of –
a. the vessel
b. earned freightage
c. proceeds of insurance, if any
 When applicable?
 Code of Commerce sanctions the application of the doctrine in
the following cases:
1. Civil liability for indemnities in favor of third persons
which arise from the conduct of the captain in the case of the
goods
2. Civil liability arising from collisions
3. Unpaid wages of the captain and the crew if the vessel and its
cargo are totally lost by reason of capture and shipwreck
 What are the exceptions?
1. Injury to or death of a passenger is due either to the fault of the
shipowner or to the concurring negligence of shipowner and the
captain
2. Vessel is insured
3. Workmen’s compensation claim
4. When presumption of negligence was not overcome
 Abandonment – shipowner or agent may exempt themselves
from liability by abandoning the vessel with all her equipment
and the freight it may have earned.
  If insured, abandonment covers the insurance proceeds
while the vessel itself shall be abandoned in favor of the
insurer
 Yangco vs. Laserna
 It was held that the liability of a shipowner is limited to the
value of the vessel or to the insurance thereon. Despite the
total loss of the vessel therefore, its insurance answers for
the damages that a shipowner or agent may be held liable for
by reason of the death of its passengers. Under Article 587 of
the Code of Commerce, a shipowner or agent has the right of
abandonment; and by necessary implication, his liability is
confined to that which he is entitled as of right to abandon
— “the vessel with all her equipment’s and the freight it may
have earned during the voyage”
 The limited liability doctrine applies not only to the goods but
also in all cases like death or injury to passengers wherein
the shipowner or agent may properly be held liable for the
negligent or illicit acts of the captain.
 Dela Torre vs. CA
 No vessel, no liability expresses in a nutshell the limited
liability rule. The shipowner’s or agent’s liability is merely
coextensive with his interest in the vessel such that a total loss
thereof results in its extinction. The total destruction of the
vessel extinguishes maritime liens because there is no longer
any res to which it can attach.
 Chua Yek Hong vs. IAC
 The term “ship agent” as used in Art.587 is broad enough to
include the ship owner. Pursuant to said provision, both he ship
owner and ship agent are civilly and directly liable for the
indemnities in favor of third persons which may arise from
the conduct of the captain in the care of goods transported, as
well as for the safety of passengers transported. However,
this direct liability is moderated and limited by the ship
agent's or ship owner's right of abandonment of the vessel
and earned freight. This expressed the universal principle of
limited liability. The most fundamental effect of
abandonment is the cessation of the responsibility of the
ship agent/owner. The ship owner's or agent's liability is
merely co-extensive with the interest in the vessel such that a
total loss thereof results in its extinction.
 Philippine Refining Corporation vs. Jarque
 Vessels are considered personal property under the civil law.
Since the term "personal property" includes vessels, they are
subject to mortgage agreeably to the provisions of the Chattel
Mortgage Law. The only difference between a chattel mortgage
of a vessel and a chattel mortgage of other personalty is that
it is not now necessary for a chattel mortgage of a vessel to
be noted in the registry of the register of deeds, but it is
essential that a record of documents affecting the title to a
vessel be entered in the record of the Collector of Customs at
the port of entry.
 The Chattel Mortgage Law in describing what shall be
deemed sufficient to constitute a good chattel mortgage,
includes the requirement of an affidavit of good faith
appended to the mortgage and recorded therewith. The absence
of the affidavit vitiates a mortgage as against creditors and
subsequent encumbrancers.
 Philippine American General Insurance vs. CA
 Ship’s liability can be limited through abandonment of the
vessel, its equipment and freightage as provided in Art. 587.
Nonetheless, there are exceptional circumstances wherein
the ship agent could still be held answerable despite the
abandonment, as where the loss or injury was due to the fault
of the shipowner and the captain. The international rule is
to the effect that the right of abandonment of vessels, as a
legal limitation of a shipowners liability, does not apply
to cases where the injury or average was occasioned by the
shipowners own fault. Where the shipowner is likewise to be
blamed, Art. 587 will not apply, and such situation will be
covered by the provisions of the Civil Code on common carrier.
 Sweet Lines vs. CA
 A captain who, having agreed to make a voyage, fails to fulfill
his undertaking, without being prevented by fortuitous event
or force majeure, shall indemnify all the losses which his
failure may cause, without prejudice to criminal penalties
which may be proper. In case of interruption of a voyage
already begun, the passengers shall only be obliged to pay
the fare in proportion to the distance covered, without
right to recover damages if the interruption is due to
fortuitous event or force majeure, but with a right to indemnity,
if the interruption should have been caused by the captain
exclusively. If the interruption should be caused by the
disability of the vessel, and the passenger should agree to wait
for her repairs, he may not be required to pay any increased
fare of passage, but his living expenses during the delay shall
be for his own account.
 Fireman’s Fund Insurance vs. Metroport Services
 The legal relationship between the consignee and the
arrastre operator is akin to that of a depositor and
warehouseman. The relationship between the consignee and the
common carrier is similar to that of the consignee and the
arrastre operator. Since it is the duty of the arrastre to
take good care of the goods that are in its custody and to
deliver them in good condition to the consignee, such
responsibility also devolves upon the carrier. Both the
arrastre and the carrier are therefore charged with and
obligated to deliver the goods in good condition to the
consignee.
 International Container Terminal vs. Prudential
 Normally, a request for a bad order survey is made in case there
is an apparent or presumed loss or damage. The consignee
made no such request despite being provided by the petitioner a
form therefor. The lack of a bad order survey does not toll
the prescriptive period for filing a claim for loss, because
the consignee can always file a provisional claim within 15
days from the time it discovers the loss or damage. Such a
claim would place the arrastre operator on notice that the
shipment sustained damage or loss, even if the exact
amount thereof could not be specified at the moment.
 In this manner, the arrastre operator can immediately verify its
culpability and liability. This is to give arrastre contractor a
reasonable opportunity to check the validity of the claim, while
the facts are still fresh in the minds of the persons who took
part in the transaction, and while the pertinent documents are
still available. The period of 15 days is sufficient for the
consignee to file a provisional claim after the discharge of the
goods from the vessel.
 Far Eastern Shipping vs. CA
 A pilot, in maritime law, is a person duly qualified, and
licensed, to conduct a vessel into or out of ports, or in
certain waters, to guide vessels into or out of ports, and entrusted
with the navigation of vessels on the high seas. The pilot
supersedes the master for the time being in the command and
navigation of the ship, and his orders must be obeyed in all
matters connected with her navigation. He becomes the master
pro hac vice and should give all directions as to speed, course,
stopping and reversing anchoring, towing and the like. The
master is still in command of the vessel notwithstanding the
presence of a pilot. There are occasions when the master may
and should interfere and even displace the pilot, as when the pilot
is obviously incompetent or intoxicated and the circumstances
may require the master to displace a compulsory pilot because
of incompetency or physical incapacity.
 CHARTER PARTY – is a contract by which with the entire
ship or some principal part thereof is let by the owner to
another person for a specified period of time.
 Two Types of Charter Parties
1. Contract of Affreightment which involves the use of shipping
space leased by the owner in part or as a whole, to carry goods for
others:
a. Time Charter – lease for a fixed period of
time
b. Voyage – for a single voyage
2. Charter by Demise or Bareboat by which the whole vessel is
let to the charterer which transfers to him its entire
command and possession and consequent control over its
navigation, including the master and crew who are his
servants.
 REQUISITES OF A VALID CHARTER PARTY: (CEFC)
a. Consent of the contracting parties
b. Existing vessel which should be placed at the disposition
of the shipper
c. Freight
d. Compliance with Art. 652 of Code of Commerce
Jason Clause – a stipulation in a charter party that in case of a

maritime accident for which the shipowner is not responsible by law,
contract, or otherwise, the cargo shippers, consignees or owners shall
contribute with the shipowner in general average
Paramount Clause – a clause in charter party providing that the

COGSA shall apply even through the transportation is domestic
 Litonjua Shipping vs. National Seamen Board
 What the time charterer acquires is the right to utilize the
carrying capacity and facilities of the vessel and to
designate her destinations during the term of the charter. A
voyage charter, or trip charter, is simply a contract of
affreightment, that is, a contract for the carriage of goods, from
one or more ports of loading to one or more ports of unloading,
on one or on a series of voyages. In a voyage charter, master
and crew remain in the employ of the owner of the vessel.
 It is well settled that in a demise or bare boat charter, the
charterer is treated as owner pro hac vice (for this
occasion) of the vessel, the charterer assuming in large measure
the customary rights and liabilities of the shipowner in
relation to third persons who have dealt with him or with the
vessel. In such case, the Master of the vessel is the agent of
the charterer and not of the shipowner. The charterer or
owner pro hac vice, and not the general owner of the vessel,
is held liable for the expenses of the voyage including the
wages of the seamen.
 Planters Products vs. CA
 When PPI chartered the vessel M/V "Sun Plum", the ship
captain, its officers and compliment were under the employ
of the shipowner and therefore continued to be under its
direct supervision and control. Hardly then can we charge the
charterer, a stranger to the crew and to the ship, with the duty
of caring for his cargo when the charterer did not have any
control of the means in doing so.
 Caltex vs. Suspicio Lines
 The charterer of a vessel has no obligation before
transporting its cargo to ensure that the vessel it chartered
complied with all legal requirements. The duty rests upon the
common carrier simply for being engaged in public service.
The Civil Code demands diligence which is required by
the nature of the obligation and that which corresponds
with the circumstances of the persons, the time and the place.
Towage is not a charter party. It is a contract for the hire of
services by which a vessel engaged to tow another vessel
from one port to another for consideration. Whereas a
charter party is a contract whereby the whole of part of the ship
is let.
 DEMURRAGE -The sum of money due by express contract
for the detention of the vessel in loading or unloading,
beyond the time allowed for that purpose in the charter
party.
 DEADFREIGHT -The amount paid by or recoverable from
a charterer of a ship for the portion of the ship’s capacity the
latter contracted but failed to occupy .
 PRIMAGE -Bonus to be paid to the captain after the
successful voyage
 Fortuitous Cases: (WIPE-B)
a. War or interdiction of commerce
b. Inability of the vessel to navigate
c. Prohibition to receive cargo
d. Embargo
e. Blockade
 Delivery of Goods without Surrender of Bill of Lading
 The obligation of the carrier is also terminated if the goods are
delivered even if the bill of lading was not surrendered. The
surrender of the BoL is not necessary for the discharge of the
obligation of the carrier
 FUNCTIONS OF A BILL OF LADING (ECR)
 Evidence of existence of contract of carriage of cargo
 Commercial document, if negotiable may be transferred
 Receipt of cargo
 Types of Bill of Lading:
 1. “On Board” Bill of Lading – it states that the goods have
been received on board the specified vessel that will carry them
 2. “Received Shipment” Bill of Lading – it states that the goods
have been received for shipment with or without specifying the
vessel on which they are to be shipped
 RIGHTS AND OBLIGATION OF PARTIES
 Shipowner or Agent
(NO-US-LPB)
1. Not to accept cargo from others if the vessel is wholly
chartered.
2. Observe represented capacity.
3. Unload cargo clandestinely placed.
4. Substitute another vessel if load is less than 3/5 of capacity.
5. Leave port if charterer does not bring the cargo within lay days.
6. Place vessel in a condition to navigate.
7. Bring cargo to nearest neutral port in case of war or blockade.
 Charterer
(AFL-WES)
1. Pay agreed charter price .
2. Pay freightage on unboarded cargo .
3. Pay loses to others for loading uncontracted and illicit cargo .
4. Wait if the vessel needs repairs .
5. Pay expenses for deviation.
6. Sub-charter
 Definition
 BOTTOMRY
a. Loan secured by the shipowner of ship agent
b. Guaranteed by the vessel
c. Payable only upon arrival of vessel at destination
 RESPONSENTIA
a. Loan secured by the owner of the cargo
b. Guaranteed by the cargo
c. Payable upon safe arrival of the cargo at destination
 Common Elements
1. Exposure of security to marine peril
2. Obligation of the debtor conditioned upon safe arrival
 Forms
May be executed by means of:
1. Public instrument
2. Policy signed by the contracting parties and the broker taking
part therein
3. Private instrument
 Hypothecary Nature of Bottomry/Respondentia
 The obligation of the borrower to pay the loan is extinguished
if the goods are absolutely lost by reason of an accident in sea
during voyage unless loss is due to:
a. Inherent defect
b. Barratry on part of the captain
c. Fault or malice of the borrower
d. Vessel engaged in contraband
e. Cargo loaded is different from what agreed
 GENERAL AVERAGE
 Definition
 Includes all damages and expenses which are deliberately cause
in order to save the vessel, its cargo, or both at the same time
from real and known risks.
 Requisites
a. Common danger to ship and the cargo after loading
b. For common safety, vessel or the cargo or both is sacrificed
deliberately
c. Successful saving of the vessel and cargo
d. Expenses should have been incurred after taking legal steps and
authority
 Formalities
 1. Resolution of the captain
 2. Resolution must be entered in the logbook—
a. Stating reasons and motives for dissent
b. Signatures of all present
c. Detail of jettisoned goods and injuries caused to those on board
 PARTICULAR AVERAGE
 Definition
 Are all the expenses and damages caused to the vessel or to her
cargo which have not inured to the benefit and common profit
of all persons interested in the vessel and cargo
 COLLISIONS – it refers to the contact of two moving vessels.
If one vessel is moving while the other is stationary, the same is
more appropriately called allusion
 DOCTRINE OF INSCRUTABLE FAULT
 In a collision, the vessel at fault shall indemnify the damages
sustained or losses incurred and if both vessels were at fault,
each shall suffer its own damages, both shall be solidarily liable
to others. This solidarity has been held to preclude a common
carrier from interposing a defense of due diligence in selection
and supervision.
RULES ON COLLISION OF VESSELS
Who is at Fault Who shall be Liable

Fault of one vessel Owner of the vessel at fault
shall be liable
Both vessel at fault Each vessel shall suffer its own

losses. BUT both owners shall
be jointly and severally liable to
owners of cargoes
Undeterminable fault Each bears own loss BUT both
owners shall be solidarily liable
to owners of cargoes
Fortuitous event Each bears own loss
3rd vessel’s fault 3rd vessel is liable
Fortuitous event but The vessel run into shall suffer
vessel properly its own damage or expense
anchored & moored
 DOCTRINE OF ERROR IN EXTREMIS
 There are 3 zones in collision
a. FIRST ZONE – time up to the moment when risk of collision
begins
b. SECON ZONE – time between moment when risj of collision
begins up to the moment it becomes practical certainty
c. THIRD ZONE – time when collision is certain up to the time of
impact If a vessel having a right of way suddenly changes its
course during the third zone, in an effort to avoid an imminent
collision due to the fault of another, such act is said to be done in
extremis
 Williams vs. Yangco
 The fault of the first vessel in failing to exhibit proper lights or
to take the proper side of the channel will relieve from liability
one who negligently runs into such vessels before he sees it;
although it will not be a defense to one who, having timely
warning of the danger of collision, fails to use proper care to
avoid it.
 Smith and Bell Company vs. CA
 Rule 18 (a) of the International Rules of the Road: When two
power-driven vessels are meeting end on, or nearly end on, so
as to involve risk of collision, each shall alter her course to
starboard, so that each may pass on the port side of the other.
Rule I (B) Under Rule 29 of the same set of Rules: A "proper
lookout" is one who has been trained as such and who is given
no other duty save to act as a look-out and who is stationed
where he can see and hear best and maintain good
communication with the officer in charge of the vessel, and
who must, of course, be vigilant. The fact that Second Mate
German was allowed to be in command of "Don Carlos" and
not the chief or the sailing mate in the absence of Captain
Rivera, gives rise to no other conclusion except that said vessel
[had] no chief mate.
 National Development Corporation vs. CA
 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. Since the goods in question are
transported from San Francisco, California and Tokyo, Japan to
the Philippines and that they were lost or due to a collision
which was found to have been caused by the negligence or fault
of both captains of the colliding vessels the laws of the
Philippines will apply.
 Macenas vs. CA
 The Court found the respondent to be gross negligent based on
certain instances. Such instances are first, the captain was
playing mahjong at the time of the collision and the captain
stated that he was on break during the emergency when he
should take charge of the ship, second, the ship was overloaded
with passengers than that prescribed number of passengers and
lastly, there was no ample number of life saving devices such
as rafts due to the overloading of passengers. The respondent
cannot also raise the defense that it followed the International
Rules of the Road when it had the chance to prevent the
collision with proper care and skill. The doctrine of last clear
chance cannot be applied in the case as well because the
doctrine is only applicable between two drivers that are
negligent against each other and not to a passenger claiming for
damages to the carrier.
 Aboitiz Shipping vs. General Accident and Life
 The only time the Limited Liability Rule does not apply is
when there is an actual finding of negligence on the part of the
vessel owner or agent. Among the inherent duties of a captain
is to examine a vessel before sailing and to comply with the
laws of navigation. The rights of a vessel owner or agent under
the Limited Liability Rule are akin to those of the rights of
shareholders to limited liability under our corporation law. Both
are privileges granted by statute, and while not absolute, must
be swept aside only in the established existence of the most
compelling of reasons.
 Philippine American General vs. CA
 The international rule is to the effect that the right of
abandonment of vessels, as a legal limitation of a ship owner's
liability, does not apply to cases where the injury or average
was occasioned by the ship owner's own fault. It must be
stressed at this point that Art. 587 speaks only of situations
where the fault or negligence is committed solely by the
captain. Where the ship owner is likewise to be blamed, Art.
587 will not apply, and such situation will be covered by the
provisions of the Civil Code on common carrier.
 ARRIVAL UNDER STRESS – it is the arrival of the vessel at
the nearest and most convenient port, if during the voyage the
vessel cannot continue the trip to the port of destination due to:
(LAW)
a. Lack of provisions
b. Well-founded fear of seizure, privateers or pirates
c. By reason of any accident of the sea disabling it to navigate
 It is unlawful when: (MINE)
a. Lack of provisions due to negligence to carry according to
usage and customs
b. Risk of enemy not well known or manifest
c. Defect of vessel due to improper repair
d. Malice, negligence, lack of foresight or skill of captain
 SALVAGE LAW
 There is salvage where a person (or persons) picks up and
conveys to a safe place a vessel or its cargo which are beyond
the control of the crew or shall have been abandoned by them.
However, there can also be a contract of salvage that may be
voluntarily agreed upon by the parties.
 Requisites to a Valid Salvage claim: (MVSS)
1. There must be a marine peril
2. Vessel is shipwrecked beyond the control of the crew or shall have been
abandoned
3. Services voluntarily rendered
4. Service must have been successful in whole or in part
 Subjects of Salvage
1. Ship itself
2. Jetsam – goods that were thrown off a ship which was in danger
3. Floatsam – goods which float upon the sea when cast overboard
4. Ligan or Lagan – goods cast into the sea tied to a buoy so that they may be
found again by owners
 DERELICT: a ship or her cargo which is abandoned and deserted at sea by
those who are in charge of it, without any hope of recovering it, or without
any intention of returning to it.
 Persons who have no Right to a Reward for Salvage:
1. Crew of the vessel saved
2. Person who commenced salvage in spite of opposition of the
Captain or his representative
3. A person who fails to deliver a salvaged vessel or cargo to the
Collector of Customs
SALVAGE TOWAGE
As to Governing Law
Governed by special law Governed by NCC on
(Act 2616) contract of lease
As to Requisite of Success
Requires success Success is not required
otherwise no payment
As to Consent
Must be done with Only the consent of the
consent of the captain or tugboat owner is needed
crewmen
As to Involvement of vessel in the Accident
Vessel must be involved Vessel must be involved
in an accident in an accident
As to Fees
Fees distributed among Fees belong to the
crewmen tugboat owner
 Erlanger & Galinger vs. Swedish East Asiatic
 The question whether or not a particular ship and her cargo is
an object of salvage depends upon her condition at the time the
salvage services are performed. In the present case the
plaintiff-appellant claims that the Nippon was a derelict or
quasi-derelict and that their claim should be adjudged upon this
basis. Whether property is to be adjudged derelict is
determined by ascertaining what was the intention and
expectation of those in charge of it when they quitted it. If
those in charge left within the intention of returning, or of
procuring assistance, the property is not derelict, but if they
quitted the property with the intention of finally leaving it, it is
derelict, and a change of their intention and an attempt to
return will not change of their intention and an attempt to
return will not change its nature.
 Barrios vs. Go Thong
 A ship in a desperate condition with passengers and persons on
board but who are unable to do anything for their own safety
may be considered a quasi-derelict. When the engine failure
occurred the seas were calm and the weather was clear. In fact
the ship did not drift too far from the location where its engines
failed. Further, the captain and crew of the MV Don Alfredo
did not find it necessary to jettison the vessel’s cargo as a safety
measure. Therefore the MV Don Alfredo cannot even be
considered as a quasi-derelict. Although the service of the
defendant did not constitute as salvage, it can be considered as
a quasi-contract of towage. However in a contract of towage,
only the owner of the towing vessel is entitled to remuneration.
 CARRIAGE OF GOODS BY SEA ACT (COGSA)
 Applicability:
 The transportation must be:
a. Water/maritime transport
b. For the carriage of goods
c. Overseas, international, foreign
 Parties:
a. Carrier – includes the charterer
b. Shipper
 Duties of Carrier under COGSA
1. Make ship seaworthy
2. Properly manned, equip, and supply the ship
3. Properly and carefully load, handle, stow, carry, keep, care and
discharge the goods
4. Make the holds, refrigerating, and cooling chambers
5. Issue to the shipper a bill of lading
 One-year prescriptive period:
 The prescriptive period of one year starts after the delivery of
the goods or the date the goods should have been delivered.
The period does not apply to conversions or misdeliveries. A
stipulation reducing the one year period is null and void, but a
written agreement to suspend it is valid.
  The rule applies in cases of collision, but it starts not from
the date of the collision but when the goods should have been
delivered
  Period is not suspended by an extrajudicial demand.
Suspended only by:
1) express agreement of the parties;
2) 2) filing of an action in court until it is dismissed
 Elser vs. CA
 Clause 18 must of necessity yields to the provisions of the
COGSA in view of the proviso contained in the same Act
which says: any clause, covenant, or agreement in a contract of
carriage relieving the carrier or the ship from liability for loss
or damage to or in connection with the goods . . . or lessening
such liability otherwise than as provided in this Act, shall be
null and void. This means that a carrier cannot limit its liability
in a manner contrary to what is provided for in said act. And so
Clause 18 of the bill of lading must of necessity be null and
void.
 Ang vs. Compania Maritima
 The action of Ang is based on misdelivery of the cargo which
should be distinguished from loss thereof. The one-year period
provided for in Section 3 (6) of the Carriage of Goods by Sea
Act refers to loss of the cargo. What is applicable is the four-
year period of prescription for quasi-delicts prescribed in
Article 1146 (2) of the Civil Code or ten years for violation of a
written contract as provided for in Article 1144 (1) of the same
Code. Four-year period of prescription for quasi-delicts or ten-
year period for violation of written contract, applicable to case
at bar.
 DOLE Philippines vs. Maritime Company
 The demand in this instance would be the claim for damages
filed by Dole with Maritime on May 4, 1972. The effect of that
demand would have been to renew the one year prescriptive
period from the date of its making. Stated otherwise, under
Dole's theory, when its claim was received by Maritime, the
one-year prescriptive period was interrupted (or tolled) and
began to run anew from May 4, 1972, affording Dole another
period of one year counted from that date within which to
institute action on its claim for damage. Unfortunately, Dole let
the new period lapse without filing action.
 Sea-Land Services vs. IAC
 There can be no doubt about the validity and enforceability of
freely-agreed-upon stipulations in an 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.
Since the liability of a common carrier for loss of damage to
goods transported by it under a contract of carriage is governed
by the laws of the country in destination, the liability of Sea-
Land to the consignee is governedprimarily by the Civil Code
and suppletorily by the Code of Commerce and special laws
such as the Carriage of Goods by Sea Act. The stipulation in
the questioned bill of lading limiting Sea-Land’s liability for
loss or damage to the shipment covered by said bill to $500 per
package is held valid and binding on private respondent.
 Maritime Agencies vs. CA
 The one-year period in the present cases should commence on
20 October 1979, when the last item was delivered to the
consignee. Union’s complaint was filed against Hong Kong on
19September 1980, but tardily against Macondray on 20 April
1981. The consequence is that the action is considered
prescribed as far as Macondray is concerned but not against its
principal, which is what matters anyway.
 Mayer Steel Corp. vs. CA
 Carriage of Goods by Sea Act governs the relationship between
the carrier on the one hand and the shipper, the consignee
and/or the insurer on the other hand. It defines the obligations
of the carrier under the contract of carriage. It does not,
however, affect the relationship between the shipper and the
insurer. This case is governed by the Insurance Code. The
insurer exercising its right of subrogation is bound by the one-
year prescriptive period. However, it does not apply to claim
against the insurer for the insurance proceeds because the claim
against the insurer is based on contract, it expires in 10 days.
 AVIATION LAW
 The governing law is now Republic Act No. 9497 of the Civil
Aviation Authority Act of 2008 which was passed on March 4,
2008.
 WARSAW CONVENTION – applies to international
transportation by air. There is international transportation when:
a. The place of departure and the place of destination are within
the territories of two contracting countries regardless of whether or
not there was a break in transportation or
b. The place of departure and the place of destination are within
the territory of a single contracting country if there is an agreed
stopping place within a territory subject to the sovereignty,
mandate or authority of another power even though the power is
not a party to the Convention
 Damage or Injury for which Carrier is Liable:
 A. Passenger – if injury took place:
1) on board the aircraft;
2) in the course of any of the operations of embarking;
3) in the course of disembarking;
4) when there was or because of delay
 B. Checked baggage or goods – damage occurred during air
transportation or when there is delay
 Limit of Liability:
 1. Passengers – $10,000 to $100,000 o except: agreement to a
higher limit
 2. Checked-in baggage – $20 / kg o except: consigner declared
its value and paid a supplementary sum, carrier liable to not
more than the declared sum unless it proves the sum is greater
than its actual value
 3. Hand-carry baggage – $400 to $1000/passenger
 Note: The Hague Protocol amended the Warsaw Convention by
removing the provision that if the airline took all necessary
steps to avoid the damage, it could exculpate itself completely
 SPECIAL RULES ON LIABILITIES OF AIRLINE
 CARRIERS
1. In case of flight diversion due to bad weather or other
circumstances beyond the pilot’s control, the relation between
carrier and passenger continues until the latter has been landed at
the port of destination and has left the carrier’s premises. The
carrier should exercise extraordinary diligence in safeguarding the
safety of its stranded passengers until they have reached their
final destination
 2. Even where overbooking of passengers is allowed as a
commercial practice, the airline company would still be guilty
of bad faith and still be liable for damages if it did not properly
inform passenger that it could breach the contract of carriage
even if they were confirmed passengers
 3. An open-dated ticket constitutes a complete contract between
the carrier and passenger. Hence, the airline company is liable
if it refused to confirm a passenger’s flight reservation
 4. An airline company which issued a confirmed ticket to a
passenger covering successive trips on different airlines can be
held liable for damages occasioned by “bumping off” by one of
the successive airlines
 5. An airline ticket providing that carriage by successive air
carriers is to be regarded as a “single operation” is to make the
issuing carrier liable for the tortuous conduct of the other
carrier. A printed provision in the ticket limiting liability only
to its own conduct is not enough to rebut that liability
 JURISDICTION OR VENUE:
a. Court where the carrier is domiciled
b. Court where the carrier has its principal place of business
c. Court where the carrier has an establishment by which the
contract has been made
d. Court of the place of destination
 NOTICE OF CLAIM AND PRESCRIPTIVE PERIOD:
 a. Notice of Claim or Complaint – this is mandatory or a
condition precedent. The complaint or notice must be files with
the international carrier
i. Baggage – within 3 days from receipt
ii. Baggage – in case of delay of delivery within 14 days from the
time the baggage was placed at the disposal of the passenger
iii. Goods – 7 days from delivery
 b. Prescription of Action – The case must be filed in court
within
i. 2 years from receipt in case of an action for damage to
passenger’s baggage
ii. If the action is for tort including humiliation at the hands of the
airline employees, filed within 4 years
 PUBLIC SERVICE ACT (CA 146)
 Public Service: Includes any person who may own, operate,
manage, or control in the Philippines for hire or compensation,
with general or limited clientele, whether permanent,
occasional or accidental, and done for general business
purposes, any common carrier, railroad, street railway, traction
railway, subway motor vehicle, steamboat, or steamship line,
ferries, and water craft, shipyard, ice-plant, electric light, heat
and power or any public utility
Government Agencies that replaces the Public
Service Commission
LTFRB Land Transportation
Franchising
Regulatory Board
MARINA Maritime Industry Authority
NTC National Telecommunications
Commission
ERC Energy Regulatory Commission
NWRC National Water Resources
Council
CAA Civil Aviation Authority
DoTC Department of Transportation
and
Communication
TRB Toll Regulatory Board
LTO Land Transportation Office
 CERTIFICATE OF PUBLIC CONVENIENCE
  No public service shall operate without having been issued a
certificate of public convenience or a certificate of public
convenience and necessity
  The certificate constitutes neither a franchise nor a contract,
confers no property right, and is a mere license or privilege.
The holder of said certificate does not acquire a property right
in the route covered thereby. Nor does it confer any property
right, interest or interest in the public highways. Revocation of
this certificate deprives him of no vested right. New and
additional burdens, alteration of the certificate, or even
revocation or annulment thereof is reserved to the State
CERTIFICATE OF CERTIFICATE OF
PUBLIC CONVENIENCE PUBLIC CONVENIENCE
AND NECESSITY
Any authorization to Requires franchise
operate public service issued by the legislative
issued by the Public department
Service Commission for
which no franchise either
municipal or legislative is
required
 Grounds for revocation of certificate:
a. Where holder is a mere dummy
b. Where operator ceased operation and placed his buses on
storage
c. Where operator totally abandons the service
 Requirements for granting certificate:
a. Citizen of the Philippines, or a corporation, etc. constituted and
organized under the laws of the Philippines at least 60% of its
stock or paid-up capital must belong entirely to citizens of the
Philippines
b. Financially capable of undertaking the proposed service
c. Proof of public necessity, interest and convenience
 Luzon Stevedoring vs. Public Service Commission
 C.A. No. 146 clearly declares that an enterprise of any of the kind
therein enumerated is a public service if conducted for hire or
compensation even if the operator deals only with a portion of the
public or limited clientele. The term 'public service' includes every
person that now or hereafter may own, operate, manage, or control
in the Philippines, for hire or compensation, with general or
limited clientele, whether permanent, occasional or accidental,
and done for general business purposes any common carrier. It is
not necessary, in order to be a public service, that an organization
be dedicated to public use, i.e., ready and willing to serve the
public as a class. It is only necessary that it must in some way be
impressed with a public interest; and whether the operation of a
business is a public utility depends upon whether or not the
service rendered by it is of a public character and of public
consequence and concern.
 San Pablo vs. Pantranco
 A ferry service is distinguished from a motorship or motorboat
service engaged in the coastwise trade in that the latter is intended
for the transportation of passengers and/or freight for hire or
compensation between ports or places in the Philippines without
definite routes or lines of service. Under no circumstance can the sea
between Matnog and Allen be considered a continuation of the
highway. While a ferry boat service has been considered as a
continuation of the highway when crossing rivers or even lakes,
which are small body of waters separating the land, however, when
as in this case the two terminals, Matnog and Allen are separated by
an open sea it cannot be considered as a continuation of the highway.
Respondent Pantranco should secure a separate CPC for the
operation of an inter-island or coastwise shipping service in
accordance with the provisions of law. 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.
 Manzanal vs. Ausejo
 There was no testimony whatsoever that her vehicles are of
such kind which may endanger the lives of the passengers or
are not suitable for the peculiar characteristics of the area
serviced. There is no proof that petitioner is not in a position to
cope with the obligations and responsibilities of the service and
to maintain a complete number of units as authorized. While
the Court agree with respondent Commission that said
provision does not necessarily require a "passenger-operator"
relationship, the Court disagrees that a single hold-up incident
which does not clearly link petition's taxicab can be
comprehended within its meaning. There is no proof that she
has hired a driver with criminal record or bad moral character
or has kept under her employ, such driver despite knowledge
about his moral behavior, discourteous conduct or criminal
record.
 Cogeo-Cubao Operators and Drivers Assoc. vs. CA
 A certificate of public convenience can be sold by the holder
thereof because it has considerable material value and is
considered as valuable asset. Although there is no doubt that it
is private property, it is affected with a public interest and must
be submitted to the control of the government for the common
good. Insofar as the interest of the State is involved, a
certificate of public convenience does not confer upon the
holder any proprietary right or interest or franchise in the route
covered thereby and in the public highways. However, with
respect to other persons and other public utilities, a certificate
of public convenience as property, which represents the right
and authority to operate its facilities for public service, cannot
be taken or interfered with without due process of law.
 KMU Labor Center vs. Garcia
 LTFRB is authorized under EO 202, s. 1987 to determine,
prescribe, approve andperiodically review and adjust,
reasonable fares, rates and other related charges, relative to the
operation of public land transportation services provided by
motorized vehicles. However, LTFRB is not authorized to
delegate that power to a common carrier, a transport operator,
or other public service. Authority given by the LTFRB to the
provincial bus operators to set a fare range over and above the
authorized existing fare, is illegal and invalid as it is
tantamount to an undue delegation of legislative authority. Rate
should not be confiscatory as would place an operator in a
situation where he will continue to operate at a loss; rate should
enable public utilities to generate revenues sufficient to cover
operational costs and provide reasonable return on the
investments.
 Tatad vs. Garcia
 What EDSA LRT Corporation, Ltd. owns are the rail tracks,
rolling stocks like the coaches, rail stations, terminals and the
power plant, not a public utility. While a franchise is needed to
operate these facilities to serve the public, they do not by
themselves constitute a public utility. What constitutes a public
utility is not their ownership but their use to serve the public. In
law, there is a clear distinction between the "operation" of a
public utility and the ownership of the facilities and equipment
used to serve the public. The right to operate a public utility
may exist independently and separately from the ownership of
the facilities thereof
 Philippine Airlines vs. Civil Aeronautics Board
 Under RA 776, CAB has the authority to issue Certificate of
Public Convenience and Necessity. A legislative franchise is
not a precedent requirement because the Congress has
delegated the authority to authorize the operation of domestic
air transport services to the CAB, an administrative agency.

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TRANSPORTATION LAW

ATTY. BENEDICT G. NISPEROS, ENP

Class Etiquette  Attend class (20% deduction per absent) – inform

GOODS 3. He must undertake to carry by the method by which his

ORDINARY have acted negligently if the goods are lost, destroyed or

 (1) Flood, storm, earthquake, lightning, or other natural disaster or

DILIGENCE  (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

 (5) Order or act of competent public authority.

Common presumed to have been at fault or to have acted negligently,

Common particular type of cargo for one shipper, which appears

Common vessel by one or more persons, provided the charter is

Carrier limited to the ship only, as in the case of a time-charter or

Carrier or competence to provide. The authority given by the

Common distinction between the "operation" of a public utility and the

Carrier ownership of the facilities and equipment used to serve the

Common actual delivery in contracts for the transport of goods

Carrier when possession has been turned over to the consignee

Registered by and between the contracting parties should exempt the

Owner Rule owner from liability to third persons cannot be sustained

Liability rendered by carriers .

*Acts of GOD including pandemic/health emergency

FORTUITO caso fortuito, the presumption by law of fault of

 The purpose served by the manifest is far different from that of

Jason Clause – a stipulation in a charter party that in case of a

Paramount Clause – a clause in charter party providing that the

Who is at Fault Who shall be Liable

Both vessel at fault Each vessel shall suffer its own

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