LAWS ON TRANSPORTATION

Civil Code Provisions on Common Carriers (Legal Framework)

Definition of Common Carries - Art. 1732

Tests for a Common Carrier

Characteristic of Common Carriers

Meaning of Public Use

Unreasonable Discrimination prohibited

CC subject to legislative regulation; Limitations on power to

regulate

Vigilance over the goods and safety of passengers

transported
(Art. 1733)
Public Policy requirement: Exercise of Extraordinary
Diligence
Contrast: Diligence of a good Father of a Family
(Defense in culpa aquiliana or quasi delict - Art. 2180,
2181)

Kabit System : Liability of registered owner/ driver

Loss, Destruction, Deterioration of Goods

Presumption of Negligence (Art. 1735
Culpa contractual (not culpa aquiliana)
Exemptions: Fortuitous. Events, actor omission of
shipper, Character of Goods, defects in packing/
container
Requisites for defense of natural disaster (Art. 1739):
proximate and only cause of the loss was the natural
disaster
Effect of delay (Art. 1740) re defense of natural disaster
Equitable reduction of damages: contributory act/
omission of shipper (Art. 1741)
Defense: Extraordinary Diligence includes the
selection and supervision of persons who handle the
goods (Art. 1735, Art. 1759) greatest skill, utmost
foresight required
Resposibility lasts from the time goods are loaded until
discharged or delivered to consignee (Art. 1738)
Notice of arrival of goods: constructive delivery
Due diligence still required (to minimize or prevent loss
of the goods before,during or after occurrence of storm,
flood, or other natural disaster
Due diligence also required to forestall or lessen loss
when caused by the character of the goods or faulty
packing/ container
Common carriers not responsible if goods are seized/
destroyed on lawful order of public authority, if authority
had power to issue order (Art. 1743)

Policy Framework - Arts. 1744 to 1754

Safety of Passengers - Arts 1755 to 11763
Damages - Arts. 1764 to 1766; 2176-21278;1264, 2219
Public Service Law (Commonwealth Act No. 146, as amended)

Executive Order No. 125, 125- A Creating the DOTC (Now

incorporated in Administrative Code, EO No. 202, Title 15)

LTFRB Rules of Practice and Procedures

LTO Law - R.A. No. 4136

Road Board Law

Toll Regulatory Board Law - PD 1112

Other Special Laws (Institutional Framework: Air, Sea, Rail Transport)

Civil Aeronautics Law (RA No. 776 as amended)

CAAP Chapter - Civil Aeronautic & Aviation Law

Civil Aeronautics Board - Economic Regulation of Airlines

MIAA Charter

Cebu Mactan Airport Charter

Cebu Ports authority

Pjilippines Coast Guard Law

Philippine National Railways Charter

Light Rail Transit Authority Charter

MRT Contract (Under DOTC Management)

Code of Commerce

Commercial Contracts for Transportation Overland

Arts. 349 to 379

Maritime Commerce - Vessels

Arts. 573 to 585

Maritime Commerce , Persons Who Take Part - Shipowners &

Ship
Agents
Arts. 586 to 608

Captains & Masters of Vessels

Arts. 609 to625

Officers & Crews of Vessels

Arts. 626 to 648
PD 760
PD 866

Supercargoes
Arts. 649 to 651

Special Contacts of Maritime Commerce

Charter Parties - Arts 652 to 668
Rights & Obligations of Shipowners - Arts. 669 to 678
Obligations of Charterers - Arts. 679 to 687
Total or Partial Rescission of charter Parties - Arts
688-692
Passengers on Sea Voyages - Arts. 693 to 705
Bills of Ladings - Arts. 706 to 718
Loans on Bottomry & Respondentia - Arts 719 to 736
Marine Insurance - Sec. 204, Act No. 2427, The
Insurance Act

Maritime Commerce Risks and Accidents: Averages, Arrival

Under
stress, Collisions, & Shipwrecks
Averages - Arts. 806 to 818
Arrivals Under Stress - Arts. 819 to 825
Collisions - Arts. 826 to 845
Shipwrecks - Art. 840 to 869
Proof & Liquidation of Damages - Arts. 846 to 869
The Salvage Law (Act No. 2616)
Carriage of Goods by Sea Act (Public Act No. 521)

PART I - COMMON CARRIES

Transportation Defines - 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. Also,
the removal of goods or persons from one place to another by carrier. The
obligation falls under the classification obligation to do.
Kinds of Transportation
1. According to its object:
Transportation of THINGS
Transportation of PERSONS
Transportation of NEWS
2. According to place of travel:
Transportation by LAND
Transportation by WATER
Through Navigable Canals
Lakes or Rivers
By Sea
Transportation by AIR
Transportation by RAIL
Transportation is absolutely indispensable To bring commodities nearer to consumer, where it is in demand
To bring people to places of work and business
To carry people for tour and pleasure purposes
Parties to Contract to Transportation
a) Shipper or Consignor
b) Carrier or Conductor
Common or Public (Art. 1732, Civil Code)
Private or Special Carrier
c) Consignee
NOTE: The person of the Shipper may be merged with Consignee
Consideration for the Contract of Transportation
Freight - price or compensation paid for the transportation by a
carrier (Term Freight is also used to denote goods or merchandise
to be transported).
CARRIERS defined

 Persons or corporations who undertake to transport or convey

goods,property, or persons from one place to another, gratuitously
or for hire.
COMMON CARRIER - one who holds itself out as ready to engage
in the transportation of goods for hire as a public employment and
not as a casual occupation.
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.
Common Carrier vs. Private Carrier
A common carrier is a public service and is therefore subject to
regulation; a private carrier is not Public Utility Vehicle.
A private carrier is not bound to carry for any reason, unless it
enters a special agreement to do so a common carrier is bound to
carry for all who offer such goods as it is accustomed to carry and
tender reasonable compensation for carrying them.
No one can be considered 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.
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 (route).
4. The transportation must be fir hire.
If the undertaking is single transaction, not a part of the general business or
occupation engaged in, as advertised or held out the general public, then
the individual or company furnishing such service is a private, not a
common carrier.
Characteristics of Common carriers
1. The common carrier undertakes to carry for all people indifferently,
holding himself out as ready to engage in the transportation of goods
and
persons as a public employment within the limits of his capacity and
the sphere of the business required him.
2. The common carrier cannot lawfully decline to accept a person or
particular class of goods for carriage to the prejudice of the person or
the traffic in those goods. He can only decline if the discrimination is for the
sufficient and substantial reason as to be reasonable or necessary.

3. No monopoly is favored, thus the need for regulation by government,

particularly as to the determination of capacity to accommodate service
on particular routes.
4. The common carrier operates for public convenience, hence,
another facet of the governments regulatory mandate is to determine
reasonable fare or compensation to the utility.
Meaning of Public use
Public use means the same asuse by the public. The essential
features is that it is not confined to privileged individuals, but is open to the
indefinite public. If the us is merely optional with the owner, or the public
benefit is merely incidental, it is not a public use which will authorize the
exercise of jurisdiction of the government agency (LTFRB).
Common carriers subject to legislative regulation
The business of a common carrier holds such a peculiar relation to the
public interest that there is super-induced upon it the right of public
regulation. When private to the property is affected with public interest it
ceases to be juris privati only. Such regulation is exercised by the LTFRB
through requirements of a) Securing CPC of franchise,
b) Determining quality of service through use of appropriate
equipment,
c) Regulating fares,
d) Determining the number of vehicles to service particular routes in
order to prevent cut-throat competition, and
e) Imposing sanctions for violations of rules and standards of
convience,
Limitation on power to regulate common carriers
1. Regulation must not have the effect of depriving an owner of his
property without due of law
2. Regulation must not have the effect of confiscating or appropriating
private property without just compensation
3. Regulation must not limit or prescribe irrevocably vested rights or
privileges lawfully acquired under a franchise or charter.

CASES ON COMMON CARRIERS

Japan Airlines vs. Asuncion, 449 SCRA 544
Philippine Airlines, Inc. Vs. Court of Appeals, 566 SCRA 124
When contract of carriage arises - When an airline issues a ticket to a
passenger, confirmed for a particular flight on a certain date, a contract of
carriage arises and the passenger has every right to expect that he be
transported on that flight and on that date it becomes the carriers obligation
to carry him and luggage safely to the agreed destination.
Duty of airline to inspect passengers travel documents - While it may
be true that an airline has the duty to inspect whether its passengers have
the necessary travel documents, such duty does not extend to checking the
veracity of every entry in the documents - an airline could not vouch for the
authenticity of a passport and the correctness of the entries therein.
Republic vs. Lorenzo Shipping Corporation, 450 SCRA 550
Extraordinary diligence defined - Extraordinary diligence is that extreme
measure of care and caution which persons of unusual prudence and
circumspection use for securing and preserving their own property or rights.
Presumption of negligence - The presumption or fault of negligence may
be overturned by competent evidence showing that the common carrier has
observed extraordinary diligence.
Mallari Sr. vs. Court of Appeals, 324 SCRA 147
Violation of traffic rule giving rise to presumption - Under Article 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.
Xxx Liability of a 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.
Sulpicio Lines vs. First Lepanto-Taisho Insurance Corporation, 462 SCRA
125

Requirements of extraordinary diligence- 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.
How to overcome presumption of liability - To overcome the presumption
of liability for the loss, destruction or deteriorate of goods under Art. 1735,
the common carrier must prove that they observed extraordinary diligence
as required in Art. 1733.
Phil. Charter Insurance Corp. vs. Unknown Owner of Vessel M/V National
Honor, 463 SCRA 202
Extent of extraordinary diligence in vigilance over the goods - 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 damage to or destruction of the goods entrusted to it
for sale, carriage and delivery - it requires common carriers to render
service with the greatest skill and foresight and to use all reasonable means
to ascertain the nature and characteristics of goods tendered for shipment,
and to exercise due care in the handling and storage, including such
methods as their nature requires.
When presumption applies - When the goods shipped are either lost or
arrive in damaged condition, a presumption arises against the carrier of its
failure to observe that diligence, and there need not be an express finding of
negligence to hold it liable. The enumeration in Article 1734 of the NCC
which exempts the common carrier for the loss or damage to the cargo is a
closed list.
Philippine Airlines, Inc. vs. Court Appeals, 566 SCRA 124
When moral/exemplary damages may be recovered - In breach of
contract of air carriage, moral damages may be recovered where (1) the
mishap results in the death of a passenger; or (2) where the carrier is guilty
of fraud or bad faith; or (3) where the negligence of the carrier is so gross
and reckless as to virtually amount to bad faith. Xxx the award of exemplary
damages is warranted where the air carrier acted recklessly and
malevolently in transporting the passengers, and its gross negligence
amounting to bad faith entitled the latter to moral damages.
Japan Airlines vs. Sigmangan, 552 SCRA 341
Rule on damages recoverable - As a general rule, moral damages are not
recoverable in actions for damages predicated on a breach of contract for it
is not one of the items enumerated under Article 2219 of the Civil Code,
excepts in cases in which the mishap results in the death of a passenger,
and in the cases in which the carrier is guilty of fraud or bad faith, as
provided in Philippine Airlines, Inc. vs. Court of Appeals, 566 SCRA 124

Tan vs. Northwest Airlines, Inc., 327 SCRA 263

Defense of safety measure in transporting baggage in another plane No malice or bad faith may be imputed to an airline where, due to weight
and balance restrictions, its act of transporting a passengers baggage on
another plane was done as safety measure.
Extent of damages recoverable - Where in breaching the contract of
carriage the airline is not shown to have acted fraudulently or in bad faith,
liability for damages is limited to the natural and probable consenquences of
the breach of obligation which the parties had foreseen or could have
reasonably foreseen.