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Bascos Test:

COMMON CARRIERS

- 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.

Art. 1732. 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
compensation, offering their services to the public.
Aguedo F. Agbayani, COMMERCIAL LAWS OF THE
PHILIPPINES, vol. 4, 1989 ed. (hereinafter 4 Agbayani)

Extraordinary diligence
A common carrier must render service with the greatest skill
and utmost foresight.

What is a common carrier?

- Rationale: The nature of the business of common carriers

and the exigencies of public policy

- A contract of carriage or transportation is one whereby a

certain person/association of persons obligate themselves to
transport persons, things, or news from one place to another
for a fixed price.

Transportation defined.-- a contract of transportation is

one whereby a certain person or association of persons
obligate themselves to transport persons, things, or news
from one place to another for a fixed price

REQUISITES OF A COMMON CARRIER OF GOODS

Classification :1. As to object: (1) things; (2) persons; (3)

news

FPIC Test
1. He must be engaged in the business of carrying goods for
others as a public employment, AND must hold himself out
as ready to engage in the transportation of goods for person
generally as a business and not as a casual occupation;
2. He must undertake to carry goods of the kind to which his
business is confined;

2. As to place of travel: (1) land; (2) water; (3) air

Parties to contract of transportation:
(1) shipper or consignor.-- person to be transported; one
who gives rise to the contract of transportation by agreeing
to deliver the things or news to be transported, or to present
his own person or those of other or others in the case of
transportation of passengers

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.

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(2) carrier or conductor.-- one who binds himself to

transport persons, things, or news as the case may be; one
employed in or engaged in the business of carrying goods
for other for hire
(3) consignee-- the party to whom the carrier is to deliver
the things being transported; one to whom the carrier may
lawfully make delivery in accordance with its contract of
carriage (but the shipper and the consignee may be one
person)
Freight defined.-- The terms has been defined as: (1) the
price or compensation paid for the transportation of goods
by a carrier, at sea, from port to port. But the term is also
used to denote (2) the hire paid for the carriage of goods on
land from place to place, or on inland streams or lakes. The
name is also applied to (3) the goods or merchandise
transported at sea, on land, or inland streams or lakes. Thus
the term is used in 2 senses: to designate the price for the
carriage, also called freightage, or to designate the goods
carried.
Contracts through transportation agents.-- A contract
of transportation is not changed, altered or affected by the
mere fact that the obligor avails of other parties to effect the
transportation agreed upon, as in the case of transportation
agents.
Carriers defined.-- Persons or corporations who undertake
to transport or convey goods, property or persons, from one
place to another, gratuitously or for hire, and are classified
as private or special carriers, and common or public carriers
Private carriers defined.-- Those who transport or
undertake to transport in a particular instance for hire or

reward
Common carriers vs Private carriers:
(1) the common carrier
holds himself out in
common, that is, to all
persons who choose to
employ him, as ready to
carry for hire; no one can
be a common carrier unless
he has held himself out to
the public as a carrier in
such a manner as to render
him liable to an action if he
should refuse to carry for
anyone who wished to
employ him

(1) the private carrier

agrees in some special case
with some private individual
to carry for hire

(2) a common carrier is

bound to carry all who offer
such goods as it is
accustomed to carry and
tender reasonable
compensation for carrying
them

(2) a private carrier is not

bound to carry for any
reason, unless it enter into
a special agreement to do
so

(3) a common carrier is a

public service and is
therefore subject to
regulation

(3) a private carrier does

not hold itself out as
engaged in the business for
the public, circumstances or

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conditions.
The law prohibits common
carriers (CC) from
subjecting any person, etc.
or locality, or any kind of
traffic, to any undue or
unreasonable prejudice or
discrimination whatsoever.
Exception: When the actual
cost of handling and
transporting is different,
then different rates may be
charged

The true test 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 actually transacted, or the
no. and character of the conveyances used in the
employment (the test is therefore the character of the
business actually carried on by the carrier.)
Case : an airplane owner is a common carrier where he
undertakes for hire to carry all persons who apply for
passage indiscriminately as long as there is room and no
legal excuse for refusing; airlines engaged in the passenger
service on regular schedules on definite routes, who solicit
patronage of the traveling public, advertise schedules for
routes, times of leaving and rates of fare, and make the
usual stipulation as to baggage are common carriers
Characteristics of common carriers:

Test for a common carrier:

(1) He must be engaged in the business of carrying goods
for others as a public employment, and must hold himself
out as ready to engage in the transportation of goods for
persons generally as a business, and not a casual
occupation.
(2) He must undertake to carry goods of the kind to which
his business is confined.
(3) He must undertake to carry by the methods by which his
business is conducted, and over his established roads.
(4) The transportation must be for hire.

(1) The common carrier undertakes to carry for all people

indifferently; he holds himself out as ready to engage in the
transportation of goods for hire as a public employment and
not as a casual occupation, and he undertakes to carry for
all persons indifferently, within the limits of his capacity and
the sphere of the business required of him, so that he is
bound to serve all who apply and is liable for refusal, without
sufficient reason, to do so
(2) The common carrier cannot lawfully decline to accept a
particular class of goods for carriage to the prejudice of the
traffic in those goods
Exception : for some sufficient reason, where the
discrimination in such goods is reasonable and necessary
(substantial grounds)
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(3) No monopoly is favored - the Commission has the power

to say what is a reasonable compensation to the utility and
to make reasonable rules and regulations for the
convenience of the traveling public and to enforce them

handling and transporting may only be made when the

difference is based upon actual cost

(4) Public convenience - for the best interests of the public

This involves a consideration of the following--

Meaning of Public use.-- It is not confined to privileged

individuals, but is open to the indefinite public; there must
be a right which the law compels the owner to give to the
general public. Public use is not synonymous with public
interest. The true criterion is whether the public may enjoy
it by right or only by permission

(1) suitability of the vessels of the company for the

transportation of such products;

The law prohibits unreasonable discrimination by

common carriers.-- The law requires common carriers to
carry for all persons, either passengers or property, for
exactly the same charge for a like or contemporaneous
service in the transportation of like kind of traffic under
substantially similar circumstances or conditions. The law
prohibits common carriers (CC) from subjecting any person,
etc. or locality, or any kind of traffic, to any undue or
unreasonable prejudice or discrimination whatsoever.

(3) the general nature of the business done by the carrier;

Exception: When the actual cost of handling and

transporting is different, then different rates may be
charged
Cases : (1) merchandise of like quantity may not be
considered alike - the quantity, kind and quality may be
exactly the same, and yet not be alike, so far as the cost of
transportation is concerned
(2) shipments may be alike although composed of different
classes of merchandise - difference in the charge for

Determination of justifiable refusal:

(2) reasonable possibility of danger or disaster, resulting

from their transportation in the form and under the
conditions in which they are offered for carriage;

(4) all the attendant circumstances which might affect the

question of the reasonable necessity for the refusal by the
carrier to undertake the transportation of this class of
merchandise
Case: The mere fact that the carriage of dynamites may
lead to destructive explosions is not sufficient to justify
refusal if it can be proven that in the condition in which it is
offered for carriage there is no real danger to the carrier nor
reasonable ground to fear that the vessel and those on
board will be exposed to unnecessary or unreasonable risks.
3. Nature and Basis of Liability
Basis of Liability
The basis is the contract of carriage
Nature of Liability

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The nature is direct and immediate.

(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 the goods or defects in the
packaging or in the containers;
(5) Order or act of competent public authority.

Art. 1733. Common carriers, from the nature of their

business and for reasons of public policy, are bound
to observe extraordinary diligence in the vigilance
over the goods and for the safety of the passengers
transported by them, according to the circumstances
of each case.
Such extraordinary diligence in the vigilance over the
goods is further expressed in Articles 1734, 1735,
and 1745, Nos. 5,6, and 7, while the extraordinary
diligence for the safety of the passengers is further
set forth in Articles 1755 and 1756.

Art. 1735. In all cases other than those mentioned in

Nos. 1, 2, 3, 4 and 5 of the preceding article, 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 as required in Art.
1733.
Art. 1745. Any of the ff. or similar stipulations shall
be considered unreasonable, unjust and contrary to
public policy:
xxx
(5) That the common carrier shall not be responsible
for the acts or omissions of his or its employees;

Art. 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:

(6) That the common carrier's liability for acts

committed by thieves, or of robbers who do not act
with grave or irresistible threat, violence or force, is
dispensed with or diminished;

(1) Flood, storm, earthquake, lightning, or other

natural disaster or calamity;

(7) That the common carrier is not responsible for the

loss, destruction, or deterioration of goods on

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account of the defective condition of the car, vehicle,

ship, airplane or other equipment used in the
contract of carriage.
Art. 1755. 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 a due regard for all
circumstances.
Art. 1756. In case of death of or injuries to
passengers, common carriers are presumed to have
been at fault or to have acted negligently, unless
they prove that they observed extraordinary
diligence as prescribed in articles 1733 and 1755.
Extraordinary diligence required of common
carriers.-- The law requires CC to exercise extra- ordinary
diligence which means that they must render service with
the greatest skill and utmost foresight. The extra-ordinary
diligence required of carriers in the handling of the goods of
the shippers and consignees last from the time the cargoes
are loaded in the vessels until they are discharged and
delivered to the consignees.
Reasons for requiring extra-ordinary diligence.-The nature of the business of common carriers and the
exigencies of public policy demand that they observe extraordinary diligence; the business of CC is impressed with a
special public duty and therefore subject to control and
regulation by the state. The public must of necessity rely on
the care and skill of CC in the vigilance over the goods and
safety of the passengers

Rigorous law on common carriers not applicable to

special employment as carrier.-- The laws applicable to
CC are rigorous and should not be extended to a person who
has neither expressly assumed that character, nor by his
conduct and from the nature of his business justified the
belief on the part of the public that he intended to assume
it.
Registered owner primarily and solidarily liable with
driver, under the "kabit system."-- Registered owner is
primarily and solidarily liable for the damage caused by the
vehicle registered in his name, even if the said vehicle had
already been sold, leased or transferred to another person
who was, at the time of the accident, actually operating the
vehicle. The operator of record continues to be the operator
of the vehicle in contemplation of law, as regards the public
and third persons, and as such is responsible for the
consequences incident to its operation; such owner/operator
of record is held in contemplation of law as the employer of
the driver.
Kabit system.-- One whereby a person who has been
granted a certificate of public convenience allows other
persons who own vehicles to operate them under such
license, for a fee or percentage of the earnings. This is
contrary to public policy, and therefore, void and inexistent;
"this is a pernicious system that cannot be too severely
condemned; it constitutes an imposition upon the good faith
of the govt."
Reason for holding registered owner liable.-- The law
does not relieve the registered owner directly of the
responsibility that the law fixes and places upon him as an
incident or consequence of registration -- where a registered
owner allowed to evade responsibility by proving who the
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supposed transferee or owner is, it would be easy for him by

collusion with others or otherwise, to escape said
responsibility and transfer the same to an indefinite person
or to one who possesses no property with which to respond
financially for the damage or injury done; in case of an
accident, the registered owner should not be allowed to
disprove his ownership to the prejudice of the person injured
or to be relieved from responsibility
4. Classes of common carriers
As to service
- Carrier of goods;- Carrier of passengers
As to mode of transportation
- Land - Water - Air
D. LAW APPLICABLE
Applicability of laws (in order)

Art. 1732. 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
compensation, offering their services to the public.
Art. 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound
to observe extraordinary diligence in the vigilance
over the goods and for the safety of the passengers
transported by them, according to the circumstances
of each case.
Such extraordinary diligence in the vigilance over the
goods is further expressed in Articles 1734, 1735,
and 1745, Nos. 5,6, and 7, while the extraordinary
diligence for the safety of the passengers is further
set forth in Articles 1755 and 1756.

1.

Civil Code

2.

Code of Commerce

Art. 1755. 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 a due regard for all
circumstances.

3.

Special laws

5. Laws applicable

Note:
- According to Art. 1753, 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.

Art. 1766. In all matters not regulated by this Code,

the rights and obligations of common carriers shall
be governed by the Code of Commerce and by special
laws.
4 Agbayani:
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New Civil Code primarily governs common carriers.-The Provisions of the Civil Code [1732- 1766] primarily
govern common carriers and the provisions of the Code of
Commerce [Overland Transportation and Maritime
Commerce] and special laws [Carriage of Goods by Sea Act;
Salvage Act] have only subsidiary application to common
carriers.

of the common carrier for their loss, destruction or

deterioration.
The provisions of the NCC primarily govern contracts of
carriage of goods from foreign ports to Philippine ports

Art. 1753, NCC. The law of the country to which the

goods are to be transported shall govern the liability

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